Australia Dumps Carbon Tax, And Emissions Now On Track For Projected New Record

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In 2011, Australia's Labor government first enacted a carbon tax that charged people $23 for every ton of carbon dioxide they emitted. It covered 60 percent of Australia's economy — including its power plants. (The tax was then scheduled to transform into a cap-and-trade system with a flexible price by 2015.)

The tax went into effect in July 2012, and Australia's electricity sector responded by reducing the amount of brown coal it burned and ramping up hydropower generation. Operators were squeezing more and more electricity out of existing dams. Carbon-dioxide emissions from the power sector dropped roughly 9 percent in the first six months after the tax went into effect.

But in a lot of ways, that drop was unsustainable. Many hydropower operators were simply depleting existing reservoirs to generate more electricity — reservoirs that would be hard to replenish if the country suffered more drought. Some of these utilities were essentially betting that the carbon tax would either be repealed or that the price would plummet when the cap-and-trade system appeared in 2015.

That bet paid off. The carbon tax proved highly controversial, the Labor Party lost power, and Tony Abbott's Liberal Party repealed the tax in July 2014. All of the sudden, those utilities had incentive to stop using hydropower and ramp up production from brown coal generators in Victoria. As a result, power-sector emissions are expected to rise an unprecedented 9 percent this year. "In effect we will have just about zeroed out the emissions reductions achieved over the last few years," writes Sandiford.

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http://www.vox.com/2014/11/6/7157713/australia-carbon-tax-repeal-emissions-rise