Independent Carbon Price Reports Released by ClimateWorks

Canberra, Australia ( April 07, 2011

Independent Carbon Price Reports Released by ClimateWorks

Independent Carbon Price Reports Released by ClimateWorks

Two independent reports released today by ClimateWorks Australia and the Grattan Institute confirm that a carbon price is essential to cut pollution and deliver us a clean energy future, the Climate Change and Energy Efficiency Minister, Greg Combet said today.

ClimateWorks Australia’s updated Low Carbon Growth Plan for Australia makes clear that the longer we delay taking action on climate change, the greater will be the costs to the Australian economy. Their report states:

Losses from delayed action will increase rapidly as it becomes harder to catch up over a declining number of years. If no further action is taken before 2015, the cost of reaching the 5% reduction target within Australia in 2020 will increase by $5.5 billion per annum for businesses and households.

“The Government is committed to a carbon price that will cut pollution, drive investment in clean energy, and deliver certainty for businesses to invest in the technologies of the future,” Mr Combet said.

The Grattan Institute’s forensic analysis of existing climate change policies demonstrates that only a carbon price through a market mechanism will cut pollution without excessive cost to the economy or taxpayer. This is because market mechanisms reward results while promises of abatement tendered to a Government fund are inherently flawed.

The report makes clear that the Coalition’s Direct Action plan, which is centred on a grant-tendering program, is both costly and ineffective at delivering economy wide abatement. The report states:

Based on experience, government would need to announce an abatement purchasing fund of $100 billion to meet the 2020 emissions reduction target.

“The Coalition is obsessed with the idea of using taxpayers’ money to pay polluters,” Mr Combet said. “This analysis proves that it would be hard for them to find a more ineffectual or costly way of doing so.”

“This report provides further evidence that the Coalition’s Direct Action policy was only ever intended as a fig leaf to hide the underlying denial of climate change by Tony Abbott.

“Under our policy less than 1,000 of our biggest polluters will pay for the pollution they emit and every cent raised will go to assisting households with price impacts, supporting jobs in the most affected industries, and in programs to invest in our clean energy future,” Mr Combet said.

The Grattan Institute report also confirms that the Government’s Renewable Energy Target and energy efficiency standards play an important role in cutting our pollution. However, only a market-based carbon price can achieve the scale and speed of reductions Australia needs to move to a clean energy future.

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