Australia’s 500 worst-polluting companies will pay a tax on their carbon emissions from 1 July 2012, as the country’s Senate has passed the Clean Energy Act on Tuesday, a law on pollution.
Last month the lower house passed the bill by just 74 votes to 72, and the vote was also tight in the Senate, 36 in favour and 32 against.
In order to pass the bill the government relied on the support of the Greens.
At a news conference Australian prime minister Julia Gillard said the vote was “a win for those who would seek their fortunes and make their way by having jobs in our clean energy sector”.
“Today we have made history. After all those years of debate and division, our nation has got the job done,” she said.
For several years politicians have been debating pollution-limiting legislation.
In 2007 former prime minister Kevin Rudd was swept to power after making the carbon tax central to his election, but then the parliament rejected the bill.
According to opposition parties a tax on carbon emissions would cause job losses and raise the cost of living. They have promised that if they win the next election in 2013 they will repeal the law.
Those expected to be hit the hardest by the tax are Australia’s mining firms, airlines, steel makers and energy firms.
Then domestic fuel is likely to rise when companies pass on the costs to consumers.
The initial price per tonne of carbon has been set by the Australian government at A$23 ($23.80), which is more than in other similar scheme. For example in the European Union the price is between $8.70 and $12.60 a tonne.
Then starting in July 2015 the pollution price regime will transform into an emissions trading scheme with a floating price. For every tonne of carbon the companies involved emit they will need a permit.
Although Australia accounts for 1.5% of the world’s emissions, it is the developed world’s highest emitter per head of population due to its relatively small population.
With this tax on carbon emissions the government hopes to force innovation in renewable energy supplies and therefore free Australia from its reliance on fossil fuels.