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Australia has become the first country to repeal a national carbon tax in a move that threatens to isolate the country amid increasing international efforts to tackle climate change.
The senate voted by 39 to 32 on Thursday to repeal carbon pricing following months of wrangling between opposition parties and the government over the measure, which was introduced two years ago.
“What’s gone today is not a policy to reduce emissions. What’s gone today is the world’s biggest carbon tax,” said Prime Minister Tony Abbott, who campaigned in last year’s election to “axe the tax”.
The vote, a hard-fought political victory for Mr Abbott, marks one of the biggest setbacks for climate action advocates since Canada became the first nation formally to pull out of the Kyoto protocol climate treaty in 2011.
It is a sharp break from what has been a steady rise in the number of carbon pricing schemes in the past two years as China, South Korea, Kazakhstan and California have launched or scheduled such measures.
It comes a month after other US states began considering new carbon trading plans to meet sweeping cuts in power plant emissions proposed by President Barack Obama.
The Australian tax was due to be integrated into an emissions trading mechanism by 2015, which would enable the market to set a price on carbon – a model that many countries want to replicate globally.
The EU, home of the world’s largest carbon market, said it regretted the vote in Canberra, which sinks a plan to link the European scheme with Australia.
This is likely to be the biggest impact of the Australian vote, carbon market analysts said. “I don’t think it will slow the expansion of schemes in the rest of the world,” said Marcus Ferdinand of Thomson Reuters Point Carbon. “But it is definitely a signal from the Australian government that it is not interested in fighting global warming.”
The ruling Liberal-National coalition and Australian industry argue the tax was set at a higher level than similar emission reduction schemes overseas and hurt Australia’s competitiveness.
Opponents dispute this, citing OECD data, and warn that axing the carbon tax leaves Australia with no viable policy to tackle climate change and will make it a pariah on the world stage.
“History will judge Tony Abbott harshly for his denial of global warming and his undermining of Australia’s effort to address it,” said Christine Milne, Green party leader.
Last week Mr Abbott’s plans were thrown into doubt when senators, including those from the party of Clive Palmer, the mining magnate turned lawmaker, blocked the move.
Mr Palmer, whose Palmer United party holds the balance of power in the upper house, on Thursday sided with the government to approve the repeal after new consumer protection amendments were included.
Climate change policy has dogged successive Australian administrations, which must balance a powerful industry lobby led by the country’s A$60bn coal industry against growing public concern over greenhouse gas emissions.
“We are a government which absolutely appreciates that we have only got one planet and we should pass it on to our children and grandchildren in at least as good shape as we found it,” Mr Abbott said.
“We are a conservationist government and we will do what we think is the sensible thing to try to bring emissions down.”
The coalition is proposing to replace the carbon tax with a policy called Direct Action. Under this scheme the government would provide grants to companies that invest in helping Australia meet its target of cutting emissions by 5 per cent by 2020.
But the axing of the carbon tax is unlikely to be the last word on carbon pricing in Australia. Bill Shorten, Labor leader, said on Thursday that Mr Abbott had “embarrassed Australians”, reiterating that his party would go into the next election with an emissions trading scheme as a policy.
“Tony Abbott is taking Australia backwards while the rest of the world is moving forward,” he said.
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Australia SCRAPS Carbon Tax
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