Advantages and Disadvantages of the Carbon Tax

Published: 25th August 2011
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Prime Minister Julia Gillard and opposition leader Tony Abbot are currently engaged in an ongoing heated debate as to whether the carbon tax will be implemented into Australia or not. With a decision due by early July the two are facing off almost every day to discuss what economic effects it might bring and how the public will be affective. Once you take away the political game playing the truth is that like most things that will have a large flow on effect, the proposed tax has both disadvantages and advantages;


The Carbon tax can be seen to put a burden on Australian families since it is another form of continued expense. Every single household will eventually have to pay the tax whether directly or indirectly.

The additional tax will be passed on to consumers increasing the price of every commodity. However this has already been agreed by both sides and substantial compensation will be paid out to up to 90% of Australian households. Business will also be given financial aid to assist them.

Economists also say that the tax will make locally manufactured products more expensive than imported goods, making competition less favorable for local companies.

Lastly, the mining and coal industries which contribute so heavily to Australia’s employment and economy will be heavily affected by the tax, possibly resulting to a loss of jobs for a number of Aussies. On the other hand though a lot of new jobs will be created by emerging renewable energy markets, and the booming gas industry in Qld is being groomed by the government to gradually take over the position that coal mining currently occupies.


PM Gillard and the Greens are saying that the advantages will eventually easily outweigh the disadvantages of carbon tax, and thorough economic projections done by the Treasury Department shows that all Australian households are likely to be better off financially from it.

Rapidly rising electric bills are forecast to be cut down as the carbon tax revenues will be used for the development of solar power applications throughout the country, including large scale hybrid projects with gas and wind and new solar thermal technology that will be capable of generating massive amounts of electricity 24 hours a day.

There are already exciting projects in the pipeline at the CSIRO which could see a breakthrough in producing much cheaper & very efficient solar panels technology, and it is expected to only be another 2-3 years before the country will reach "grid parity" between the cost of producing clean renewable power and that produced by polluting fossil fuels.

The increasing economic feasibility of these Solar and other renewable energy projects will open many new job opportunities and boost the economy as more investors are driven to the country. This is already happening now and experts say that the country has limitless potential to build its "green" economy as the country is blessed with the perfect environmental conditions as well as many talented scientists in the field.

In his recent report, climate chief adviser Ross Garnaut said that the tax will drive innovations and clever ideas to reduce carbon emissions and to develop renewable energy sources as market forces turn in that direction.

Ultimately the goal of the tax is to reduce Australia’s carbon emissions as part of a shared commitment with our major trading partners who have already undertaken to do the same. The problem of the environmental effects of global warming is getting too serious to deny; the effects cannot be reversed only large scale changes by governments, corporations and individuals alike can hope to halt the spreading damage.

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