Essays on Rationale and Implications of Australias Carbon Tax Case Study

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The paper “ Rationale and Implications of Australia’ s Carbon Tax” is a thoughtful variant of the case study on finance & accounting. Beginning in July of this year, the Australian government introduced a “ carbon tax” , a tax on each tonne of carbon dioxide emissions from industrial facilities, as the key part of efforts to reduce harmful emissions that can cause climate change. Jotzo (2011, 9) identifies a few central concerns of different sectors in Australia regarding the impact of a carbon tax. The foundation of the whole concept is the concern for Australia to do its part in reducing emissions, not only for the country’ s sake but as a responsible part of the global community; this is the objective of the ‘ environmentally-concerned’ sector.

The concern for the general population is that any emissions-reduction program does not raise costs of energy and other goods or services too much, and is actually effective in reducing emissions. The concern of the businesses which are considered ‘ emissions-intensive’ is that the financial impact of an emissions-reduction program is minimized as much as possible. In this essay, the overall environmental and economic reasons for the introduction of a carbon tax are outlined first, followed by a discussion of the estimated economic impacts of the new tax and the models used to produce those estimates.

The potential impact of the carbon tax on the tourism and travel industry is then explained, with the main points of the discussion summarised in the final section. Economic and Environmental FactorsThe environmental impacts of greenhouse gas (GHG) emissions are still debated by many people, but are considered a real threat that must be addressed by the Australian government, other governments around the world, and major industry groups like the Tourism & Transport Forum Australia (Tourism & Transport Forum, 2011).

The rationale for introducing a carbon tax is that scientific evidence suggests that significant reductions in carbon emissions are needed to reduce the risk of future damaging climate change, such as increased temperatures that lead to rising sea levels and shifts in weather patterns that harm agriculture (Adams, 2007; Jotzo, 2011).

References

Adams, P.D. (2007). “Insurance against Catastrophic Climate Change: How Much Will an Emissions Trading Scheme Cost Australia?” Australian Economic Review, 40(4), 432-452.

Ahammad, H., Clements, K.W., and Qiang, Y. (2001). “The Economic Impact of Reducing Greenhouse Gas Emissions in WA”, University of Western Australia Economic Research Centre Discussion Paper 01-23, 2001.

Horridge, J.M., Parmenter, B.R., and Pearson, K.R. (1998). “ORANI-G: A General Equilibrium Model of the Australian Economy”, Centre of Policy Studies and Impact Project, Monash University, June-July 1998. Available from: http://monash.edu.au/policy/ftp/oranig/oranidoc.pdf.

Humphreys, J. (2007). “Exploring a Carbon Tax for Australia”, Perspectives on Tax Reform, 14, October 2007. Centre for Independent Studies, available from: www.cis.org.au.

Jotzo, F. (2011). “Carbon pricing that builds consensus and reduces Australia’s emissions: Managing uncertainties using a rising fixed price evolving to emissions trading”, CCEP Working Paper 1104, Centre for Climate Economics and Policy, Crawford School of Economics and Government, The Australian National University, Canberra.

McDougall, R.A. (1993). “Short-Run Effects of a Carbon Tax”, Centre of Policy Studies, Monash University, General Paper No. G-100, June 1993.

Meltzer, J. (2012). “Carbon Pricing in Australia: Lessons for the United States”, The Brookings Institution, 2 July 2012. Available from: http://www.brookings.edu/research/ opinions/2012/07/02-carbon-australia-meltzer.

Meng, S., Siriwardana, M., and McNeill, J. (2011). “Australian Carbon Tax: Winners and Losers”, University of New England, Business, Economics and Public Policy Working Papers, 2011-3.

Siriwardana, M., Meng, S., and McNeill, J. (2011). “The Impact of a Carbon Tax on the Australian Economy: Results from a CGE Model”, University of New England, Business, Economics and Public Policy Working Papers, 2011-2.

Tourism & Transport Forum. (2011). “Carbon tax and tourism & travel – Trade and global warming exposed”, Tourism & Transport Forum Australia Position Paper, May 2011. Available from: www.ttf.org.au.

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