The effect of Australia's new carbon tax

SYDNEY, July 11 (UPI) -- Australian Prime Minister Julia Gillard said that new government polices mean that carbon dioxide emissions will be taxed at $25 per ton beginning in 2012.

The policy is being promoted as a major victory for Australia's environmental activists, with Australian Greens leader Bob Brown saying: ''This today is a world-leading outcome. It is going to lead to better outcomes at Durban, at the next international conference on climate change.''

The government's carbon tax scheme was also strongly backed by rural independent MPs Tony Windsor and Rob Oakeshott, The Sydney Morning Herald reported Monday.

''As I have said all along, I want to be part of something that does something about climate change, not part of something that collects revenue and shuffles it around," Windsor said.

"'I believe that this climate change package is an affordable catalyst for this change as it will reduce greenhouse gas emissions, clean up our environment and move our economy from its dependence on fossil fuels, ensuring the future of our children and their children.''

The country's new greenhouse gases economic reform policy will affect an estimated 500 firms, including some of Australia's largest international companies. Offering some relief, in 2015 a market-based trading scheme will be introduced, which will allow major polluters to buy offsetting shares in companies producing emissions below the target levels.

Australia, one of the world's most sparsely populated countries, is one of the planet's worst emitters of greenhouse gases per capita, as it not only relies on coal for 80 percent of its electricity generation from indigenous coal reserves but is a major coal exporter as well, particularly to the voracious demands of the Chinese energy market.

Under the recently passed legislation the new policies go into operation July 1, 2012, affecting companies that produce at least 25,000 tons of carbon dioxide per year.

Qantas Airlines, Australia's flagship aerial carrier, has already reacted to the policy, releasing a statement on its Web site stating, "In the context of the significant challenges facing the global aviation industry, the Qantas Group will be unable to absorb the additional costs associated with the carbon price and there will be a full pass-through to customers."

Opinion polls indicate that roughly 60 percent of Australia's voters are against the policy, indicating potential trouble for the Gillard administration.

Gillard remains committed to the new policy and convincing the Australian electorate of it worth, stating: "By 2020 our carbon price will take 160 million tons of pollution out of the atmosphere every year. That's the equivalent of taking 45 million cars off the road."