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Economic modelling of emissions reduction targets raises concerns
21 Feb 2019 | Archive
Modelling of the economic consequences of competing emission reduction targets by respected economic consultant and former government adviser on climate change, Dr Brian Fisher demonstrates the need for energy policies that will bring down power prices and keep them down, while ensuring reliability and allowing Australia to meet its international emissions reduction commitments.
The Australian Chamber of Commerce and Industry, Australia’s largest and most representative business network, responded to economic modelling released today by Dr Brian Fisher’s BAEconomics.
“Business has been calling for policies to make energy more affordable in the short and long term, ensure reliability and deliver our international commitment to reduce emissions under the Paris Agreement,” said Australian Chamber CEO, James Pearson.
“The BAEconomics modelling indicates that electricity prices will increase by 11% under the Coalition’s 26-28% emissions reduction target and much further – by 58% – under Labor’s 45% emissions reduction and 50% renewable energy targets. The modelling indicates that growth in the Australian economy would be increasingly constrained with higher targets.
“This analysis underlines the importance of getting energy and emissions policies right. Moving well in excess of our international emissions commitments, as Labor proposes to do, is projected to leave both business and consumers with even higher energy costs and impact on jobs and wages.
“Many small businesses have been struggling to stay in business following a 60% increase in energy prices[1] already experienced over the past decade. A further 60% increase in energy prices, which this analysis shows would occur under Labor’s approach, could mean the end for many small businesses and energy-intensive businesses,” Mr Pearson said.
“Implementation of a bipartisan approach to energy policy based around the National Energy Guarantee plus the key recommendations of the Australian Consumer and Competition Commission – NEG plus- offers a pathway to support business and households with lower power prices and reliable power supply, while supporting emissions reduction in the energy sector.
“What Australian businesses need is a sensible and measured approach to energy and emissions reductions policies that is stable, predictable and provides long term investment certainty; achieves the lowest cost abatement of emissions; and does not compromise Australia’s international competitiveness. So Australians can have the jobs, living standards and opportunities to which they aspire.”
The Australian Chamber is Australia’s largest network of employers, speaking for over 300,000 businesses providing jobs to millions of Australians in every sector of the economy.
[1] ACCC Retail Electricity Pricing Inquiry Preliminary Report 22 September 2017