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Aust will face higher electricity, petrol cos -

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Aust will face higher electricity, petrol costs: Garnaut

Broadcast: 20/03/2008

Reporter: Chris Uhlmann

The Federal Government's climate change guru, Professor Ross Garnaut, is warning we will be hit
with higher prices for electricity and petrol as the Government moves to cut greenhouse gas
emissions.

Transcript

TONY JONES: The Federal Government's chief climate change economist has painted a grim picture of
how much it's going to cost households to cut greenhouse gas emissions.

Professor Ross Garnaut is warning we'll be hit with higher prices for electricity and petrol. And
he also says that coal producing regions may have to be compensated for loss of income.

The impact on families and jobs will become even clearer in the not too distant future, as the
Government moves to get its carbon trading scheme up and running in two years time.

Chris Uhlmann reports.

CHRIS UHLMANN: The nations expert on the economics of climate change has sketched out what a carbon
trading scheme will look like and what it will mean.

ROSS GARNAUT, CLIMATE CHANGE ECONOMIST: The Emissions Trading Scheme is meant to minimise the cost
the Australian's of adjusting to a low emissions economy.

CHRIS UHLMANN: But the costs will still be significant.

ROSS GARNAUT: Electricity prices will rise. Petrol will rise.

CHRIS UHLMANN: Ross Garnaut's plan would set a cap on carbon emissions and target date. It would
set a yearly trajectory and then auction carbon permits to match it and then it would slowly reduce
the number permits until the target is reached. That will raise billions of dollars, but there's a
catch.

ROSS GARNAUT: The claims on Government associated with the introduction of this emission trading
scheme will also be very large.

CHRIS UHLMANN: The poor will be hardest hit by price hikes and have to be compensated. And there
are other losers. Communities with jobs tied up in coal-based electricity generation face a grim
future if no way is found to bury carbon.

ROSS GARNAUT: There could be some regions in Australia and some communities in Australia that are
disproportionably hit.

CHRIS UHLMANN: Rising consumer costs and communities facing job loses are the sorts of things that
keep politicians awake at night.

PENNY WONG, CLIMATE CHANGE MINISTER: We will ensure that our scheme addresses the impact on
families, on households; particularly low income households.

CHRIS UHLMANN: Taking carbon out of Australia's economy is a massive change to the way the nation
does business. But it's coming soon. The Government wants an emissions trading scheme up and
running in two years. It doesn't underestimate the task.

PENNY WONG: We will be very conscious of the impacts of various sectors of the Australian economy
and community.

CHRIS UHLMANN: And all the pain will only be meaningful if every nation does its bit. Chris
Uhlmann, Lateline.