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Wednesday, 8 August 2007
Page: 159

Senator Allison asked the Minister representing the Minister for the Environment and Water Resources, upon notice, on 26 April 2007:

(1)   Has the Government considered the discussion paper prepared by the state governments in August 2006 which reported on the impact of reducing the levels of 2005 greenhouse emissions by 19 per cent by 2030; if so, does the Government agree with the paper.

(2) (a)   Does the Minister accept modelling that shows that if greenhouse emissions were reduced by 19 per cent by 2030: (i) that there would be an increase in the cost of electricity of between $1 and $2 a week per household, and (ii) that it would take just 2 months extra to achieve the level of gross domestic product that would otherwise be achieved by 2030; and (b) if the Minister does not accept this modelling, can a detailed answer be provided as to its shortcomings.

(3) (a)   Does the Minister accept modelling in the May 2006 report of Frontier Economics, Options for moving towards a lower emissions future, that the cost of reducing greenhouse emissions from the electricity sector by 40 per cent by 2030 would be: (i) an increased cost of between $5 billion to $8 billion over 25 years in an economy expected to grow by $1 6000 billion in that time, and (ii) an increase in average electricity prices of between 43 and 71 cents per person per week; and (b) if the Minister does not accept this modelling, can a detailed answer be provided as to its shortcomings.

Senator Abetz (Minister for Fisheries, Forestry and Conservation) —The Minister for the Environment and Water Resources has provided the following answer to the honourable senator’s question:

(1)   The Government has been briefed on the states’ 2006 discussion paper on emissions trading. In response to the emissions trading taskgroup report, released on 31 May 2007, the Prime Minister, the Hon John Howard MP, announced on 3 June 2007 that Australia will move towards a domestic emissions trading system no later than 2012, and that the Government will set, in 2008, a long-term aspirational goal for cutting greenhouse gas emissions. This target will be set after economic modelling has been undertaken, and following a very careful assessment of the impacts any target will have on Australia’s economy and Australian families.

(2)   and (3) The Government notes that the modelling commissioned for the states’ discussion paper and the May 2006 report by Frontier Economics indicates a range of possible costs of achieving emissions reductions under certain scenarios. Modelling by other agencies gives different results. For example, modelling by the Australian Bureau of Resource Economics suggests that given somewhat different scenarios costs could be significantly higher.