Carbon Tax versus Carbon Offsetting – what’s the diff?
by Clayton Wehner - August 17th, 2012
Did you know that Boomerang Books is Australia’s first and only carbon neutral online bookstore? We offset all book purchases by contributing to a renewable energy fund that is independently accredited by the Carbon Reduction Institute (Certification #NC166). You can read more about our carbon neutral status here…
Unsurprisingly, the introduction of the Federal Government Carbon Tax has resulted in a number of questions being posed to us about our carbon neutral stance – a number of customers have expressed confusion about the voluntary Carbon Offset Contribution payment that we levy on customers, equating this with the Carbon Tax. Our carbon offsetting has nothing to do with the Carbon Tax!
So what’s the difference between the Carbon Tax and Carbon Offsetting that Boomerang Books participates in?
It’s a common question so worth explaining properly…this is an excerpt of an article from our accreditation body, the Carbon Reduction Institute:
The carbon tax is a very separate mechanism to the voluntary carbon offset markets, and the action taken by companies in the NoCO2 Program (of which Boomerang Books is a part). This is because the carbon tax is a permit to pollute where as voluntary offsetting is an abatement method through the direct investment in a carbon offset renewable energy project. It’s actually a recognised method of reducing/negating the carbon footprint of an organisation or product, whereas the carbon tax does not.
The carbon tax – i.e. the mandatory requirement to pay for permits to pollute, is only being imposed on the 500 companies that are largest energy users in the country – a mix of coal mining, waste disposal, and electricity generation companies. Its main purpose is to encourage industry to move towards low carbon energy generation. See here for our Carbon Tax Cheat Sheet, that explains what it’s all about more clearly.
Of the monies collected by the carbon tax, approximately 60% is returned to the general public as compensation for increased electricity prices in the form of tax cuts and welfare, and the rest of the money will be used to support jobs and help industry transition, and on other green programs.
In contrast, voluntary offsetting is used by businesses to reduce/negate their carbon footprint through the direct and measurable investment in renewable carbon offset projects, and is therefore considered as a very marketable environmental action. More and more organisations want to visibly improve their ‘green’ profile and act more sustainably, and abatement through offsetting is a well recognised way of doing this. In proof of this, the 2011 report on the State of the Voluntary Carbon Markets showed record transaction volumes were tracked, despite a carbon tax already being scheduled, and there’s been an impressive growth of 34% since 2009.
Boomerang Books is part of a voluntary offsetting program and has been voluntarily offsetting its sales for more than 18 months.