Friday, July 22, 2011

Tax on Polluters Isn't Changing Outlook on Coal

Should polluters pay for the carbon emissions that they put into the air? The answer seems obvious, but big industries continue to fight against government regulations, insisting that the costs to them will be passed on to consumers. Recently Australia joined government agencies like the European Union, certain U.S. states and New Zealand in an effort to tax big polluters. The response from the executive director of the Australian Coal Association was to give figures on the taxes implications of the economic side effects. Ralph Hillman outlined to reporters that the tax is expected to result in the closure of 18 minutes in Queensland and New South Wales states, cost 4,700 jobs and lead to $22 billion in lost revenue. Indeed, these proposals make even the consumers wary of rising costs but the government is responding with a $1.3 billion assistance package to keep jobs within the industry secure. Further the government has promised tax cuts and payments to most Australians, saying that two-thirds of all households will receive enough assistance to cover the entire financial impact of the tax.
 What these taxes are on industry are, aside from the economics, is the governmental push toward cleaner energy. Rather than developing new innovations, opponents to any governmental tax appeal to the consumer by touting that they are fighting for them. But taking into account the environmental impacts of coal, are they really? Australia is one of the worst greenhouse gas polluters in the world due to their extensive reliance on coal for power. In addition to coal providing 85 percent of their electricity production, they export nearly 75 percent of their coal mined. The new Australian tax has not shied companies away from what may be the largest takeover bid in Australian history for a coal company. U.S. coal company Peabody Energy Corp and steelmaker ArcelorMIttal’s joint bid for Queensland State’s Macarthur Coal Ltd. is an indication that lucrative coal production in Australia is, unfortunately, not waning.

Peter Browning

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