Conservatives won a landslide victory this weekend in Australia. A coalition of the Liberal and National parties (which in Australian terms are the right of center political parties) led by Tony Abbott won 88 seats in Australia’s 150 seat parliament, against 57 seats by left-wing Labor Party.
One key factor behind this electoral victory was the unpopularity of Australia’s new carbon tax scheme, which had been instituted under the previous Labor government. Incoming Prime Minister Tony Abbott has pledged to repeal the carbon tax, and even Labor leader Kevin Rudd campaigned on a promise to convert it into a cap-and-trade system.
The election is important to America because of what is says about the political viability of carbon taxes. In fact, as Robert Murphy of the Institute for Energy Research has noted, Australia’s carbon tax experience casts doubt on many of the claims made in favor of a carbon tax. Both electricity prices and unemployment spiked in Australia after its carbon tax was introduced, without any comparable environmental benefit:
[T]he promises of those calling for a “pro-growth” U.S. carbon tax have been proven to be utterly false in Australia: Its carbon tax came with income tax increases and fewer jobs as well as more command-and-control energy regulations. The debate over a carbon tax is now not just one of theoretical speculation; proponents need to explain why the U.S. outcome would be different from what actually happened in Australia.