Wednesday, October 12, 2011
Australia's House Enacts Carbon Tax
John Quiggin has the story (here) over at Crooked Timber. The tax is set at $23 (AUD) per ton, which is comparable to the the median of the trading range of EUAs on the EU ETS and to the social cost of carbon (SSC) adopted by the US government last year. The conservative party have vowed to repeal the tax when they take office, but they may find it difficult to do so, given that proceeds from the tax will be used to raise the income tax threshold from around $6,000 to around $20,000 (AUD), which should create a sizable constituency for retaining the carbon tax. Although I would personally prefer offsetting tax cuts for all taxpayers (except, perhaps, those at the very top of the income ladder), I am heartened to see that governments are finally figuring out how to tax bads like pollution instead of goods like income.