Australia now has carbon tax

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CANBERRA, Australia, July 2 (UPI) -- Australia's controversial carbon tax, aimed at cutting the country's greenhouse gas emissions, went into effect on Sunday.

Under the carbon plan, businesses which emit 25,000 tons of carbon dioxide or the equivalent in other greenhouse gases will be charged $24 per ton. The government has identified 294 companies considered to be high emitters.

In 2015 it converts to an emissions trading scheme with a floating price starting at a floor of $15.

Prime Minister Julia Gillard on Sunday said her administration had "achieved a major milestone in its plan for Australia's clean energy future"

She said the carbon price means that in 2020, Australia's carbon pollution will be at least 159 million tons less annually than it would be without the policy, equal to taking 45 million cars off the road.

Australia is one of the world's highest per-capita emitters of carbon.

"Today we take the next steps the country needs to make to keep our economy competitive, to protect our environment and to provide a cleaner Australia for future generations," she said in a statement.

But conservative opposition leader Tony Abbott said that based on the government's own figures, the carbon tax will reduce Australia's gross domestic product by a cumulative total of $1 trillion by 2050, likening it to "shutting down the country for a year."

In a statement Sunday, Abbott repeated what he has often said, that if elected -- in Australia's next federal elections that must take place before November 2013 -- he will quickly implement the Coalition's plan to abolish the carbon tax.

"Unlike the prime minister, I mean what I say: There will be no carbon tax under a government I lead," Abbott said, referring to Gillard's about-face on the issue after she had said in her 2010 election victory that there would be no carbon tax under her administration.

But Abbott's promise has created an environment of uncertainty, particularly in the business community.

"The questions around whether the scheme will be here in two years' time has stifled investment certainty," Elisa de Wit, head of climate change at law firm Norton Rose told The Guardian newspaper.

Although companies are taking the necessary steps to comply with the tax, de Wit said, many of them are reluctant to invest too far into the future.

The Australian Broadcasting Corp. cited a Nielsen poll that says two thirds of Australians do not support the tax.

An earlier version of a carbon tax, proposed by Gillard's predecessor Kevin Rudd, eventually led to his downfall in June 2010.