Tuesday, June 24, 2008
A study by the CSIRO for the Climate Institute released this morning has finds that a carbon price beginning at $15 a tonne and increasing to $100 would increase petrol prices by up to 61 per cent by 2050.
However it finds that petrol should be more affordable by then because real wages should have increased 104 per cent.
In Question Time yesterday the Opposition’s environment spokesman Greg Hunt asked the Prime Minister to rule out increasing the petrol price by “10 cents, 20c or 30c a litre as a result of his emissions trading scheme”...
Mr Rudd declined to say whether petrol would be excluded from the scheme.
The Nationals leader Warren Truss also attacked the proposed emissions trading scheme asking whether the government was prepared to export jobs by introducing
it ahead of other countries in the Asia-Pacific.
The approach marks a departure from the policy that the Coalition took to the 2007 election, which was to introduce an emissions trading scheme along the lines recommended by the previous Prime Minister’s taskforce without waiting for other countries to do the same.
It also represents a departure from an explicit promise by the previous Environment Minister Malcolm Turnbull and the Previous Prime Minister John Howard to include petrol in the emissions trading regime.
The CSIRO study finds that the emissions trading scheme to be introduced from 2010 will have only a modest impact on most household budgets as wage growth outstrips increases in energy prices, actually improving energy affordability.
In the most likely scenario modeled the average amount of income required to meet current energy needs is projected to fall from just above 9 per cent to around 8 per cent.
Among low income groups energy is expected to be become less affordable if energy use remains unchanged, but more affordable if energy efficiency improves.
The study finds that budget payments of around $350 million per year will be needed to fully insulate low income groups from increased petrol and electricity prices.
“For low-income families, concerns about the increased cost of energy and other goods and services are real but can be overcome if we have a fair and effective distribution of the multi-billion bonus to government coffers provided by the emissions trading system,” said Erwin Jackson, the director of research at the Climate Institute.
“The revenue from the emissions trading scheme is likely to equal to around one third of total current state taxes in Australia. As a priority, the Federal Government should establish a multi year, multi-billion dollar fund in next year’s Budget to offset price increase impacts in low income groups.”
The recommendation mirrors one expected in the interim report of the Garnaut review of climate change which will be released next week.