Current issue facing australia business resulting from the recently Assignment

Current issue facing australia business resulting from the recently introduced carbon tax (energy) - Assignment Example The scheme has also been targeted by some larger businesses who want to profiteer from it. Some of the problems are lack of proper frameworks on how costs can be passed to other players in the supply chain, lack of proper competition policies, and poor monitoring of prices by the government. Though the Australian government argued that the effect of this tax was going to be moderate manufacturers were not comfortable with it arguing that it was going to cause loss of jobs and closure of businesses. Therefore, the government needs to re-evaluate the scheme, identify faults, and establish solutions that should be captured in policy, complete with a monitoring process. Introduction Carbon Tax in Australia refers to a carbon pricing scheme that was launched by the Government in July, 2012, as part of wider efforts that are aimed at taming global warming. The scheme requires businesses that emit emissions amounting to 25,000 tonnes of carbon dioxide equivalent to buy emission permits (Wil liams, 2011). Though every business in Australia faces the effects of carbon tax in one way or another, chances are that small business are paying a higher price. This paper will investigate on the effects of carbon tax on small businesses by describing the following: the origins of carbon tax in Australia, the issues faced by small businesses in trying to comply with the requirement to purchase carbon emission permits; a critical analysis of the issues identified; recommendations on how the issues can be addressed; and an implementation plan. Background Global warming and other forms of climate change are issues that continue to draw unrivalled attention across the globe. Science has achieved a lot in describing factors that contribute to climate change, and has shown a clear picture of how this will affects lives today and in the coming decades (Smith, 2001). A number of natural and man-made factors have been found to play role in the continued rise of average temperatures in the earth’s atmosphere and oceans (Smith, 2001). In fact there is a consensus in the scientific circles that human factors are largely to blame for climate change. Of great concern is the continued emission of carbon dioxide and other greenhouse gases. At a global annual output of 27 billion tonnes, carbon dioxide is by far the most emitted greenhouse gas, and mainly comes from combustion of fossil fuels. A review of the effects of climate change on the world economy was first released in 2006 to the British government (Lewis & Cornish, 2012). The report recommended a number of measures such as carbon taxes to effectively compensate for market failure due to climate change. In December 2006, the Australian government established a task force on Emissions and Trading. The task force was chaired by Peter Shergold and was supposed to advice on how and emission trading scheme (ETS) could be implemented in Australia (Tennant, 2013). After the release of the final report, the Howard go vernment committed itself to put in place an ETS within a six-year time frame. In the year 2010, after initial hesitations, Gillard government agreed to put in place a fixed carbon price that would commence on 1st July 2012, and later transition to a â€Å"flexible price cap-and- trade ETS† on 1st July 2015 (Kerin, 2012). Consequently, companies that