West Australian
Thursday 30/10/2008 Page: 4
Australia would save the equivalent of $150 billion by acting early to reduce its greenhouse gas emissions, long-awaited Treasury modelling of the Rudd Government's planned emissions trading scheme will reveal today. And it asserts that despite the looming carbon price, emissions intensive, trade-exposed industries such as coal mining are likely to become more competitive and increase their share of global trade.
Treasurer Wayne Swan will claim the 12-month Treasury modelling - the most complex done in Australia of any economic measure - showed an ETS was a "pro-growth, pro- competitiveness strategy" that would be affordable to families and pensioners. "The modelling proves that the longer we delay, the more expensive responding to climate change will become," Mr Swan will say in a speech, details of which were released yesterday. "Delay could encourage buildup of emissions-intensive capital stock that will later become a significant liability.
"The modelling suggests that, by 2050, GDP costs for economies that act early are 15 per cent lower than countries that wait for the world to act together. The message is clear: Acting early is an economic imperative." But the assumptions underlying the Treasury modelling have come under attack, even before its formal release.
Research by Concept Economics for the Minerals Council of Australia argues assumptions used by Treasury in areas such as the cost for power stations to reduce emissions, base metal prices and carbon capture and storage expenses were seriously underestimated. The ETS is scheduled to begin in 2010 but the Federal Opposition is calling for it to be delayed until 2011 at the earliest so that the international response can be taken into account. The Government is expected to support a slow start to the ETS, with the price of carbon kept at a fixed price of $20 a tonne for the first two years at least.
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