Taxes, Even Carbon Taxes Are Not Popular in Australia

From the Wall Street Journal, "Carbon Reality, Again," May 12, 2009.

It's turning out that the biggest problem with carbon taxes is political reality. Australian Prime Minister Kevin Rudd has just announced he will delay implementing his trademark cap-and-trade emissions trading proposal until at least 2011. Mr. Rudd's March proposal would have imposed total carbon permit costs (taxes) of 11.5 billion Australian dollars (US$8.5 billion) in the first two years, starting in 2010. This would have increased consumer prices by about 1.1% and shaved 0.1% off annual GDP growth until at least 2050, according to Australia's Treasury. Support has fallen among business groups and individuals who earlier professed enthusiasm for Aussie cap and trade. Green gains were negligible; Australia accounts for only 1.5% of global greenhouse gas emissions.

The reversal, or "backflip," has caused Mr. Rudd much embarrassment. He may still push ahead with legislation in some form, as he promised when running in the 2007 election. But it's becoming clear the proposal won't be a shoo-in despite all the votes Mr. Rudd won when he campaigned as an anti-carbon apostle.

This is yet another example of politicians elsewhere cashing in politically on the current anti-carbon enthusiasm, only to discover that support diminishes as the real-world costs become clear.