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Australia's parliament approved a controversial pollution tax on Tuesday, after years of bitter debate over the reform which is aimed at lowering carbon emissions blamed for climate change.

11 November 2011

Cheers and applause broke out as the upper house Senate passed the Clean Energy Act, requiring Australia's coal-fired power stations and other major emitters to "pay to pollute" from July 1 next year. Prime Minister Julia Gillard said the scheme - which will levy a price of Aus$23 (US$23.80) per tonne on carbon pollution before moving to an emissions trading scheme in 2015 - would begin to address the devastating impacts of climate change. She said the reforms, which include investments in renewable energy sources, would result in Australia cutting its carbon emissions by 160 million tonnes in 2020 - equivalent to taking 45 million cars off the road. The government hopes the levy will create economic incentives for the biggest polluters to reduce their emissions but acknowledges that businesses will factor the carbon price into the cost of their goods and services.

Only New Zealand and the European Union have taken comparable economy-wide action by introducing cap-and-trade schemes, and the tax will put mining-driven Australia at the forefront of efforts in the Asia-Pacific. Australia is heavily reliant on its coal exports, and thousands have rallied against the levy which they argue will raise living costs, cut jobs and ultimately prove ineffective. Industry associations say Australia's scheme is punitive and priced far higher than the European Union system. Earlier media projections indicated that mining giants BHP Billiton, Rio Tinto and Xstrata would be liable for a combined $380 million annually at an earlier price of $20 a tonne.

Excerpt from: The West Australian (www.thewest.com.au), 8 November 2011