Monday, July 18, 2011

Carbon tax proposed in Australia

Australian government proposed a carbon tax that will be paid by all companies emitting CO2. If this will be devised this kind of tax has the potential to drive a "green" behaviour from all sides, since a reduction of VAT is also proposed in order to offset the total amount of collected taxes. For example, let's say a KW of energy costs 10 dollars, the VAT will be reduced by 1 dollar, but the energy produced from coal will be taxed supplementary by 2 dollars, as opposed to wind energy which will not be carbon taxed. So the coal energy will end up costing 11 dollars, but the wind one will cost 9 dollars (this is a pure imaginary example, I don't know the exact amount of VAT and the proposed tax, or the cost of energy). So greener products will become cheaper, thus the incentive to consume those ones. Note that Australia is one of the developed countries that didn't sign the Kyoto treaty (they consume a lot of coal), so the change in policy is significant. In my opinion, taxing all the types of pollution is the best way to obtain a reduction in the ecological pressure we put on the planet.

The original news can be read here.
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