Carbon Tax: Economic Impact on the Latrobe Valley

Australia’s greenhouse gas (GHG) emissions per capita are presently among the highest compared to other developed nations. Currently Australia contributes 1.5 per cent of global GHG emissions (Garnaut, 2008). The electricity sector in Australia together with agriculture bears the largest proportion of the carbon dioxide (CO2) emissions, while brown coal’s share in Australian total GHG emissions is 15 per cent. In contrast to black coal mining, brown coal emissions are not fugitive, so the bulk of emissions associated with the brown coal are related to its use. Although 58 per cent of Australian power generation capacity is coal-fired, at present Australian power generation is dominated by coal with approximately 81 per cent of the total electricity generated produced by brown and black coal generators (Nelson, et al. 2010). Our Ecological Footprint (a measure of how much land and water area a human population requires to produce the resource it consumes and to absorb its wastes, using prevailing technology) is 7.8 global hectares per capita (Living Planet Report, 2008), well above the sustainable global level of 2 global hectares per capita. This is three times larger than the resources that our country can regenerate in the course of one year. In response to the climate change challenge, the Labour government proposed the following climate change strategy: Reduction of Australia’s GHG emissions by 5 per cent below 2000 levels by 2020 irrespective of other countries’ actions or by 15–20 per cent depending on the scale of global action (Australian Government Climate Change Plan, 2011). The long-term target is to reduce Australia’s GHG emissions by 80 per cent below 2000 levels by 2050 (Australian Government Climate Change Plan, 2011).