Carbon Tax Impact

A carbon tax would involve the government identifying which sources of carbon pollution will be included and who would be liable to pay tax on that carbon pollution. For example, a coal mines, mining industries, burning coal, vehicle industries, Transportation. The government of Australia has introduced the “carbon tax” on carbon producing sector from July 2012 to minimize carbon emissions in three to five years time from its introduction (Gillard, 2010). The government has also planned to reduce carbon emissions to 5% by 2020 as the voluntary target in the absence of a coherent international agreement on the level of carbon emission reduction. This cost will initially be set at $23 per tonne of Co2 equivalent, and increase gradually until 2015. However, the government will shift to a trading scheme that will let the market set the cost. This is widely thought of as the most effective and least costly mechanism to reduce carbon output and reduce the level of climate change. Though, the policy to cut emissions is regressive and the tax burden will be unequally distributed among different household groups with low-income households carrying a relatively higher burden.
If Australia does not make a global effort to fight climate change, there are significant risks to the Australian economy if not take steps towards pricing carbon (Birmingham, 2013). For example, the risks facing by Qantas, who paid carbon tax penalty of 15% on its carbon emissions for any flights it makes into or out of Europe. The reason for its imposition is specifically because Australia does not have carbon price in place.
There are further economic reasons behind acting to implement a price on carbon, aside from the risk of foreign sanctions. The fact is that renewable energy technology will be the next huge growth industry. The Chinese have been quick to recognise this and have the highest level of investment in this sector, accounting for almost 25% of worldwide investment in renewable last...