Media Releases

Independent analysis of the major parties’ current pollution reduction policies shows both performing poorly with the Coalition leading the ALP on Australian pollution reduction, but trailing on a more detailed analysis (fact sheet attached), The Climate Institute said today.

“As the election looms, we’ve conducted the first run of our Pollute-o-meter* and our detailed star rating analysis of major party policies,” said John Connor, CEO of The Climate Institute.

Read more: Coalition leads ALP on pollution reduction, not policies

As Federal Cabinet considers next steps on pollution and climate change policy, The Climate Institute released its policy priorities and detailed its approach to analysis of proposed announcements, with the return of its ‘Pollute-o-meter’ and star rating of policies.

“The Climate Institute is resolutely focused on credible policies to deliver bi-partisan 2020 pollution reduction targets of up to 25 per cent reductions off 2000 levels and drive a fast but fair transition to a low pollution economy,” said CEO John Connor.

Read more: Pollution Reduction the Key to Credible Climate Policies

Statement by The Climate Institute and its Climate Partners:
Westpac, KPMG, Pacific Hydro, OgilvyEarth, AGL, and GE

UNCERTAIN POLICIES TO LIMIT CARBON POLLUTION THREATEN $2 BILLION/YEAR COST TO ECONOMY AND CONSUMERS

A paper released today by The Climate Institute and its Climate Partners* estimates that uncertainty around whether government will place a price tag on pollution will cost the economy and consumers $2 billion a year in higher electricity prices.

Prepared by economists and energy market experts, the paper estimates the additional cost to electricity users resulting from a delay in regulatory certainty on the cost of pollution.

The additional economic impacts are driven by a stop start approach to delivering public policy settings to limit pollution. This is having a profound effect – and promoting inefficient investment choices - on electricity generation and will be felt through rising electricity prices.

The longer Australia waits to establish an effective policy response, the more these additional costs will impact consumers.

The authors find (see also attached Figure): Even a delay until 2013 in regulatory certainty causes wholesale electricity prices in 2020 to be 13 percent or $8.60 per MWh higher than if greater certainty was provided immediately.

Across the economy this equates to around a $2 billion dollar a year loss to electricity consumers in 2020. For an average household, this means spending on electricity would increase by $60 per year by 2020.

The costs to consumers are lower where complementary policies are introduced to encourage energy efficiency. If the growth in energy demand can be reduced, the costs of regulatory uncertainty are not eliminated, but the electricity price will increase by around 3 percent.

The research underscores that uncertainty around the price tag on pollution will increase electricity prices, hurt the economy and hit the cost of living for every day Australians. Without greater certainty and a clear, credible and detailed plan to reduce our economy’s dependence on pollution and make clean energy cheaper, these costs will be locked in and will increase over time.

The results are based on a scenario where companies continue to build peaking power stations (such as open cycle gas fired power stations) to meet growing demand, instead of intermediate and baseload power stations (such as combined cycle gas plants) which are more efficient, potentially less polluting and have lower running costs.

Once these investments are made their cost is effectively locked into the economy and is passed on to consumers.

Global low-pollution and clean energy investments and industries are growing rapidly. Previous research commissioned by The Climate Institute and Westpac concluded that, globally, 2010 is expected to see record new investment in clean energy. At the moment, Australia is failing to capitalise on many of these opportunities.

The Climate Institute and its Climate Partners are clear that legislation to put a price tag and limit on pollution in the next term of Government is needed if Australia is to join the global race to a clean energy and a low pollution economy, and avoid the unnecessary economic costs of further delay.

* The Climate Institute’s Climate Partners is a new corporate partnership focused on promoting business leadership in driving climate change solutions and Australia’s transition to a low-carbon, clean-energy economy.

Download the Report

For media inquiries, contact Harriet Binet, Communications Director The Climate Institute, on 02 8239 6299 or 0402 588 384.

The Climate Institute called on the Government to release a detailed plan on pollution and climate change, following last night’s disappointing restatement of an open ended review of the Carbon Pollution Reduction Scheme (CPRS) in 2012.

“We need to see the Government commit to a detailed plan which would see legislation introduced in the life of the next parliament to limit and put a price tag on pollution,” said Climate Institute CEO John Connor.

“At the same time we need the Government to get on with the job of developing the skills, technologies and industries that will help Australia move from a high to a low pollution economy.

“Clear signals are needed to drive investments in new clean energy generation, and new and emerging technologies that are not likely to be supported by the Renewable Energy Target legislation such as geothermal and big solar.

“We are calling on all parties to focus on reducing Australia’s pollution and to have credible plans to achieve what is a bipartisan consensus on reducing 2020 pollution levels by up to 25 per cent below 2000 levels.”

“At the moment neither major party has a credible plan for their 2020 targets or a shift to a low pollution economy.

“A mere review of the CPRS in 2012 falls far short of what is needed to take Australia forward from a high pollution to a low pollution economy and risks locking in Australia’s dependence on polluting industries.” 

Other measures needed to end Australia’s poor international record on energy wastage with policies to drive energy savings and help manage energy bills.

In addition, measures are needed to build the carbon farming sector which is currently under threat because internationally compliant forest offsets, which were to be included in the CPRS, have been left out of the voluntary scheme.

“Delay and uncertainty is already costing business, the community and the economy at a time when the rest of the world is moving forward to seize the initiative on low pollution investments and technologies,” said Mr Connor

“We look forward to more detailed plans on pollution and climate change that limits and reduces Australia’s rising pollution in the next three years, makes business take responsibility for their pollution and makes clean energy cheaper.”

For further information:

The Climate Institute CEO John Connor 0413 968 475.

Climate Institute Communications Harriet Binet (02) 8239 6299 or 0402 588 384