The 'Carbon Tax' That Would Rise the Price of Popular Cars by $5,000

Reigning in emission of greenhouse gas has come at the forefront of political agendas all over the world, although results continue to fall short of nations' commitments. Most developed countries have adopted a range of measures aiming at encouraging people and businesses to steer away from fossil fuels and towards renewable energies, whether it is by taxing cars which don't meet CO₂ emission requirements, lowering taxes on clean energy or investing in sustainable energies.

Recently, a rumoured plan for a new strict carbon-emission tax sparked controversy.

In May 2017, the Paris conference on dealing with climate change challenges suffered a step back when President Trump withdrew. Despite this, and internal dissension within the coalition government, Australia recommitted to curbing the country's emissions by 26% to 28% - compared to levels in 2005 - by 2030.

However, a report released just before Christmas 2016 revealed that Australia's emissions rose by 0.8% in the year to June and that the country would miss the 2030 target unless its current policies were drastically reviewed, putting the government under pressure to launch new measures. One of them would rise the threshold of allowed gas emissions for cars over the next eight years.

Australia is no stranger to so-called 'carbon taxes'. They were first introduced by the Gillard Government in 2011 in the Clean Energy Act 2011 which was in force until July 2014 when it was repealed. It set the country a target of reducing greenhouse gas emissions by 5% below 2000 levels by 2020 and 80% below 2000 levels by 2050. It was replaced by the short-lived Emission Reduction Fund in December 2014 under the Abbott Government, which was met with tepid interest from organisations.

The Clean Energy Act stated that entities emitting over 25,000 tonnes of CO² per year would need to purchase permits - called carbon units - from the government to do so unless they were in transportation or in the agricultural industry. The results of that act was very limited and, unfortunately, didn't encourage companies to invest in renewable solutions to avoid the tax. In addition, the number of businesses concerned by the act was much smaller than anticipated, and they were mostly energy suppliers so the legislation failed to have any real impact.

The reason why the new carbon tax was met with such furore was that it would potentially increase the costs of the most popular cars in Australia by $5000, which was qualified by the automobile industry as an "unrealistic and ill-considered" policy.

Under those new rules, cars popular in Australia such as the Toyota Hilux, the Corolla, the Hyundai i30 and the Ford Ranger would have failed the new emission standards and consequently, would have seen their price increase. The Federal Chamber of Automotive Industries spoke vehemently against this proposed plan as it would have affected consumers directly, as well as businesses requiring fleet of vehicles to operate.

This new tax could also have had a perverse effect and encouraged consumers to keep their old, polluting cars longer because they couldn't afford models whose price was increased by this new tax, although they were likely to be far more fuel efficient than their old vehicle.

The Australian Financial Review also reported that the proposed model was actually even more stringent than European standards as it didn't allow car manufacturers to do any kind of carbon credit exchange to offset sales of cars that didn't meet the new thresholds.

The government originally neither denied nor confirmed the truth of the existence of that plan, but, earlier this month, finally spoke up to say that it was nothing but a rumour and they weren't working on such a scheme. Their statement was met with scepticism by the political world.

The issue of climate change is a thorny one all around the world. A cleaner world is surely a goal to work towards, but it comes at a cost, and governments, energy suppliers and big businesses all have to balance the necessity to replace fossil fuels with economical interests globally.

Electric cars certainly have a role to play in reducing our dependence on fuel-powered vehicles, but they still have some way to go before they are as affordable as current petrol and diesel cars.

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