Climate-change inertia 'costs nation $1bn'

www.theage.com.au
7 April 2011

INACTION on climate change over the past year has increased the cost to households and businesses of meeting Australia's minimum 2020 greenhouse target by $1 billion, a study has found. The analysis by ClimateWorks Australia found the easiest and cheapest ways of cutting greenhouse gas emissions were being lost due to delays in introducing climate policies. Despite this, Australia's minimum 2020 target, a 5% cut in emissions below 2000 levels, could still be achieved using existing technologies at a cost below $32 a tonne of CO₂ emitted.

Reaching a 25% target by 2020 the minimum emissions cut recommended by climate scientists without buying international carbon permits would need a carbon price of $100 a tonne. ClimateWorks executive director Anna Skarbek said Australia had gone backwards on climate over the past year.

She said a potential 5 million tonnes of emissions cuts equivalent to taking 1 million cars off the road had been lost. Those emissions had been locked in through, for example, land clearing that could not be reversed or the failure to impose fuel efficiency standards on new cars. Cars bought this year will, on average, stay on the road for 20 years.

''We can't make it up; we've missed it,'' Ms Skarbek said. ''Essentially, we've lost savings. It means we're going to spend an extra $260 million a year on energy that we could have saved.'' Ms Skarbek said technologies were available today to achieve Australia's greenhouse targets. ''It shows it doesn't cost as much as you might think, but it is an exponential increase if we delay,'' she said. The analysis builds on a low carbon growth plan for Australia that last year spelt out potential emissions cuts in 54 areas.

Contrary to concern about the cost of reducing emissions, the latest analysis found nearly a third of Australia's 5% target could be achieved through steps that would be profitable by 2013 even without a carbon price. Introduce a carbon price of $20 a tonne and two thirds of the cuts needed could turn a profit.

It found failure to act over the past year had added $1 billion to the bill to reach the 2020 target. A separate report by the Grattan Institute finds that only a carbon market can cut emissions fast enough for Australia to meet its 2020 target. An analysis of more than 300 climate programs found that 40% of Australia's emissions reductions have come from just three market based schemes, including the existing renewable energy target.