Yesterday Australia's Parliament passed a carbon tax bill called the Clean Energy Bill 2011, which was first released in draft form in July The legislation, which still requires approval by the Australian Senate, only applies to the 500 or so largest polluters who will pay A$23 for each tonne of carbon emissions. Accordign to the government nine out of 10 households will be compensated through tax cuts or welfare increases for any increased costs. The last attempt at a carbon tax was defeated in 2009.
Coal is currently the source of 41% of the world's electrical power generation and responsible for 20% of the world's CO2 emissions. In 2006 about 77% of Australia's power generation was derived from coal. According to the Garnaut Climate Change Review, Australia’s per capita emissions are the highest in the OECD and among the highest in the world. Energy-related emissions would be the main component leading to a quadrupling of emissions by 2100 without mitigation. A significant amount of Asia's emissions are derived from Australia's exported coal. Australia’s Cooperative Research Centre for Greenhouse Gas Technologies (CO2CRC) Otway Project has recetly reported a successful CO2 sequestration prioject. The carbon tax should encourage research and development of CCS power projects in Australia.
Relative to other OECD countries, Australia’s high emissions result from high emissions intensity of energy use, rather than high energy intensity of the economy or exceptionally high per capita income. The high emissions intensity of energy use in Australia is mainly the result of the reliance on coal for electricity.