Fin24

Australia passes landmark carbon tax laws

2011-11-08 09:00

Canberra - Australia's parliament passed laws that impose a price on carbon emissions on Tuesday in one of the biggest economic reforms in a decade, giving new impetus to December's global climate talks in South Africa.

The laws will force Australia's top 500 polluting companies to pay a price on carbon emissions from July 2012 in a major policy victory for embattled Prime Minister Julia Gillard, whose popularity has plunged over the scheme.

The final vote in the senate comes after five years of heated debate, and endorses the central plank of the government's commitment to cut carbon emissions by 5% of year 2000 levels by 2020.

The impact of the scheme will be felt right across the economy from miners to LNG producers, airlines and steel makers. It is aimed at making firms more efficient in the power and fuel they use, and to push electricity generation towards gas.

To cope with higher energy and fuel prices, the laws set out compensation for industry and households, with the government forecasting the scheme to push up prices by 0.7% in 2012-13.