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Carbon Tax ‘Hurting Bottom Line,’ Farmers Say

CowsA year after the law’s introduction, farmers in Australia are complaining that the country’s carbon tax is significantly increasing their energy costs, despite evidence that other factors are having a greater effect on electricity prices, reports Abc.net.au.

The tax increased 5 percent to AU$24 .15 ($21.89) a metric ton on July 1.

President of the Australian Dairy Farmers Noel Campbell told the news service that the carbon tax is raising costs for electricity and processing for dairy farmers by an average of AU$5,500 ($4978.60) to AU$7,000 ($6336.40) per year. The price jump is making farmers Down Under, who export around 40 percent of their produce, less competitive internationally, he says.

Energy prices are rising across the country — but at different rates from state to state. On average, electricity rates have increased 80 percent since in the past decade, but the reasons for the jump are more complex than just the carbon tax, analysts say.

Most of the price increase has been driven by upgrades to transmission and distribution infrastructure, according to Andrew Macintosh, associate professor from Australian National University’s Centre for Climate Law and Policy. Macintosh said that he would “struggle to believe” that many farmers could point to the carbon tax as a major impact on their bottom line.

Australia’s emissions have dropped 7 percent since the carbon tax’s introduction, a fact that the government points to as evidence of the policy’s success. Macintosh, however, sees it differently. According to the professor, increases in Australia’s energy efficiency and renewable energy production are more likely to have driven down the country’s emissions.

Just over a year ago, evidence emerged that Australian firms were less supportive of the carbon pricing legislation than they were 12 months prior. Only one-third said the opportunities will outweigh the risks in the long term, down from 50 percent in 2011. The country’s 300 biggest emitters began paying the the tax July 1, 2012, with two-thirds believing the $23-a-ton starting price was too high, the Sydney Morning Herald reported.

Photo Credit: Don Graham

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