Australia’s repeal of its carbon tax last week has gotten other countries thinking about ditching their own carbon dioxide emissions reduction schemes.
On the heels of the Aussie carbon tax defeat, South Korea’s finance minister, Choi Kyung-hwan, called his country’s planned cap-and-trade system “flawed in many ways,” and hinted that he would pressure the government to delay the plan until 2015.
Businesses say the cap-and-trade system could cost them up to $28.9 billion in three years unless the program is delayed until 2020.
Reuters reports that South Korea’s emissions trading program has already been delayed twice since 2013. The system would have capped emissions from 400 top emitters in the country, potentially making it the world’s second-largest cap-and-trade system.
But while some in the government remain optimistic about the system, Reuters notes that “some analysts have warned that the market’s emissions cap will be too low and have forecast that the South Korean carbon price could rocket towards $98, which is the penalty firms have to pay per tonne if they don’t meet their targets.”
Australia’s conservative government was finally able to pass legislation aimed at repealing the country’s two-year old carbon tax last week. It was hailed as a victory by carbon tax opponents, citing the huge cost it imposed on families and the economy.
U.S. politicians took notice of the repeal as well. Republican lawmakers said the Australian experience should serve as a warning to the Obama administration, which has recently introduce regulations aimed at lowering carbon dioxide emissions.
“It is painfully obvious what a disastrous effect carbon constraining policies can have, and our European allies are the prime example,” said Louisiana Republican Sen. David Vitter in a statement. “Australia’s carbon tax was certain to provide all pain and no gain for their economy.”