Australia Introduces Controversial Carbon Tax

Australia is the developed world's worst polluter per head of population

Australia has introduced its highly controversial carbon tax, after years of bitter political wrangling. The law forces the country's 500 worst-polluting firms to pay a ( $24) levy for every tonne of greenhouse gases they produce.

The government says the tax is needed to meet climate-change obligations of Australia - the highest emitter per-head in the developed world.  But the opposition calls it a "toxic tax", which will cost jobs.  The opposition also argues that the tax will raise the cost of living, promising to repeal the legislation if it wins the next election, due in 2013.

Environmentalists have broadly backed the scheme, but there have been large public protests against it. Australia's mining firms, airlines, steel makers and energy firms are among those expected to be hardest hit by the the Clean Energy Act.

Domestic fuel bills are expected to rise as companies pass on the costs to consumers. But the government of Prime Minister Julia Gillard says it is the only realistic way of meeting Australia's climate-change obligations.

It also hopes that the legislation will force innovation in renewable energy supplies, and free the country from its reliance on fossil fuels. Australia currently accounts for 1.5% of the world's emissions, but it is the developed world's highest emitter per head of population thanks to its relatively small population.

The leader of the opposition, Tony Abbott, says the "toxic" tax is expensive and will not affect climate change. Australia's initial price per tonne of carbon is much higher than other similar schemes - such as in the EU where the price is between $8.70 and $12.60 a tonne.

CARBON TAX

• 500 companies affected
• Agriculture, forestry and land are exempt
• Market-based trading scheme kicks in from 2015
• Target to cut 159m tonnes of CO2 by 2020

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