Swan welcomes IMF support on carbon tax

The Federal government has welcomed an International Monetary Fund report which broadly supports its proposed carbon tax.

The Acting Prime Minister, Wayne Swan, told parliament that the IMF’s assessment exposes the “snake oil” behind the Opposition’s “doom and gloom” attacks on the government’s carbon tax, which starts on July 1.

He noted that the IMF had described the government’s plan as a cheap and effective way of tackling climate change.

The IMF recommended a minimum initial carbon price of about $20 a tonne.

In a report released to guide policymakers, the IMF also said there were two basic ways to assess where carbon pricing should start.

It said: ”A reasonable minimum price to aim for seems to be around $US20 per tonne, under either least-cost climate stabilisation or damage valuation approaches.”

The government has set a starting price of $23 a tonne, for carbon emissions.