News | 21st Jul, 2014

Carbon tax repeal reaction

21 July 2014
Farrah Plummer, Latrobe Valley Express

THE Latrobe Valley's brown-coal power stations have been labelled the "biggest beneficiaries" following the repeal of the carbon tax.

Yallourn, Hazelwood and Loy Yang A power station operators have welcomed the repeal, while environmentalists have boldly forecasted increases in power generation as a result of the Senate decision last Thursday.

The carbon tax, instigated by the former Federal Labor government in 2012 to reduce emissions and greenhouse gases by charging polluters for each tonne of carbon released into the atmosphere, was axed after wreaking havoc in Australian politics.

The carbon price's associated $1 billion compensation scheme to assist Australia's highest polluting power stations will also end.

The Age in 2013 reported this provided Hazelwood, Yallourn and Loy Yang A with free carbon credits worth $268 million, $259 million and $241 million annually respectively.

Federal Member for Gippsland Darren Chester, who once said the tax would, "cascade through the economy like a toxic waterfall, and add costs to every Australian family", has rejoiced in the policy's demise.

"Repealing the carbon tax will also provide certainty and give the business sector greater confidence to invest in regions like the Latrobe Valley, which have been hit by the Labor-Greens focus on vilifying fossil fuel use," Mr Chester said.

But in the absence of the tax, Australia is left without a mechanism to reach the minimum five per cent reduction in emissions by 2020.

The Coalition's alternative Direct Action Plan, which would provide financial incentives for polluters to reduce emissions via competitive tenders to undertake emission reduction projects, has also been met with cynicism.

Environment Victoria chief executive Mark Wakeham said the carbon price introduced a decline in brown-coal power generation of around six to seven per cent and expected to see an increase in power generation as a result of the repeal.

Mr Wakeham acknowledged other factors for declined generation – such as widespread solar use, higher energy costs, economic changes and less Australian manufacturing – but said power stations were likely to increase power generation, pollution and profits.

He said owners of power stations like Hazelwood, Yallourn and Anglesea were the largest beneficiaries of the carbon price repeal.

"I think we're likely to see it (power generation) increase and older power stations are increasingly impacting on local communities," Mr Wakeham said.

The environmentalist also said the government should recover the compensation payments given to the coal-fired power stations.

"The owners of these polluting power stations win twice today – firstly they are no longer subject to a carbon price and can pollute without sanction, and secondly, they get to hold on to a $2 billion windfall."


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