$23 per ton Carbon Tax to Raise Inflation Rate by Less Than 1%

Contrary to claims by the Opposition that the carbon tax passed Tuesday by the Australian Senate would cause economic slow down, a climate expert said that the impact of a $23 per tonne tax would be to increase inflation rate by less than 1 per cent.

Climate Institute Chief Executive Officer John Connor, in an article in The Sydney Morning Herald, acknowledged that there would still be more drama ahead over the carbon tax which would peak in 2014 after the national election by the end of 2013.

If the next government implements the recommendations of the Climate Change Authority, by 2015 pollution reduction machinery with a minimum declining annual limit would be in place and cut pollution by at least 12 million tonnes a year, Mr Connor said.

That level of reduction is in line with the 2020 target of Australia to cut carbon emissions from 2000 levels by 5 per cent.

Mr Connor said that by 2014 global economic troubles would likely continue to persist and may slow down global efforts on climate change.

"They may also trigger shifts in economic priorities, boosting clean-energy investments, growing new low-carbon markets and bringing new approaches to prosperity," he added.

Responses to Mr Connor's articles were mixed. On blogger accused Mr Connor of having a vested interest in supporting the tax.

"Claims of actual carbon dioxide emission reduction are arrant nonsense. All that will happen is that we'll send billions of dollars to underdeveloped countries as a licence for us to continue to produce CO2," a blogger from Nelly Bay wrote.

Another blogger recalled crossing the Maribrynong River by rail in the 1960s and 1970s when water pollution was starting to be felt.

"Anyone who knew the area at that time would know what I'm talking about. Anyone who wasn't has no knowledge of the subject of polluters and their criminal negligence in not controlling their pollution. Finally they are starting to be called to account, probably with more compassion that they deserve," the blogger said.

New South Wales Nationals' MP Mark Coulton, however, raised the threat of the carbon tax to regional jobs. He said the package lacks support for small business which will incur higher operating cost.

"There is compensation for low income earners and pensioners but nothing for small business obviously and so while the initial shock might not be great, I liken it to a ball and chain on the leg of every Australian that they'll be dragging around, that the countries in the rest of the world won't be," ABC quoted Mr Coulton.