Friday, September 06, 2013

Mostly False. Under Labor the carbon tax would hit $350 per tonne

"If Labor sneaks back, the carbon tax stays and goes up to $38 a tonne by 2020 and an almost unimaginable $350 a tonne by 2050”

Tony Abbott, National Press Club, September 2, 2013

Could Abbott be right the second time around?

In the lead up to the carbon tax he said its impact on the cost of living would be “almost unimaginable”.

This week at the national press club he said: "If Labor sneaks back, the carbon tax stays and goes up to $38 a tonne by 2020 and an almost unimaginable $350 a tonne by 2050”.

An “almost unimaginable” $350 a tonne?

It’d certainly be a hike from the present $24.15 a tonne, set to slide to around $6 per tonne when Australia moves to a floating European-linked price from mid next year.

Supporting evidence

Abbott’s office sourced the price from modelling by the Australian Treasury. But the Treasury didn’t say $350 per tonne. It said $131 per tonne, a figure it expressed in present dollar than those 37 years into the future.

The Coalition converted it, plugging in the standard rate of inflation to more than double it.

But by then prices in general will have more than doubled. A ticket to the movies will cost $47 if it moves in line with inflation. Everything will seem big. One quarter of the present population will have died.

And the incomes of those alive will have swelled. The same Treasury modelling shows incomes outpacing prices to the extent that they buy 55 per cent more than they do now, even allowing for inflation. It means by then a $131 carbon price would be about as painful as an $85 price now.

But it wouldn't apply to anything like the same range of goods and services. That's the point of the Treasury modelling. It models what would happen by the time there had been an 80 per cent cut in emissions.

Does it stack up?

Dr Frank Jotzo of the ANU’s Centre for Climate Economics and Policy doubts whether the carbon price would ever need to climb that high.

“It is an assumption derived from a modelling analysis, not a forecast,” he says. “The cost of renewable energy
has come down much more rapidly than most people expected.”

Abbott seems to agree. He told the ABC within hours of his launch business was decarbonising quickly.


A Politifact rating of “mostly false'' applies where a statement contains an element of truth but ignores critical facts that would give a different impression.

PolitiFact rates Abbott’s claim mostly false.

In Politifact and The Sydney Morning Herald

Related Posts

. "Mostly False" Fact-checking the Coaltion's carbon tax costing

. What's the difference between a carbon tax and an emissions trading scheme?

. Price Shock: The carbon tax is doing even less than expected