Big polluters misrepresenting economic modelling Media Release

Nov 18, 2008 - 4:33pm

Claims made today by some of Australia biggest polluters that economic modelling commissioned by the Climate Institute into the costs of ‘soft’ versus early action in addressing climate change appear a blatant misrepresentation the facts.

The Australian Industry Greenhouse Network (AIGN) – which represents the biggest polluters – has attempted to cast doubt on the cost effectiveness of greenhouse policies by attacking an MMA modelling report, commissioned by the Climate Institute.

“The AIGN have misrepresented the conclusions of the MMA report and distorted the timelines in a bid to sell a policy lemon that effectively says stalling on addressing climate change is in Australia’s best interests,” said John Connor, Climate Institute CEO

“The Climate Institute commissioned MMA to assess the cost effectiveness of policies to 2050 and it found early action was as cost effective as a soft start. However, AIGN – through its Access Economics’ commissioned report - has chosen to assess the impacts up to 2030 however the full impacts of the choice of delay, and the benefits of early action, haven’t fully worked through the economy by 2030 - a fact conveniently overlooked in this distortion of MMA’s analysis.”

“Our response to climate change must be formulated with regard to Australia’s long-term interests. Once again we are seeing big polluters looking at the short-term and not considering the long-term prosperity of Australia.”

“The MMA report is consistent with other independent analysis by the Treasury, the International Energy Agency and the Business Roundtable on Climate Change – the longer we delay the greater the economic cost of avoiding dangerous climate change.

“In any event, the overall economic difference between the early action and soft start approach in the AIGN modelling is only one half of one per cent of GDP in 2030. This would be a small investment in switching our economy to a long-term competitive and lower-carbon platform.”

The AIGN have also continued to perpetrate another myth that Treasury assumes global emission trading by 2013. This is not the implication of the scenarios used. In the model, emission trading is used to simulate policy action (p85, full Treasury report).

“The current global carbon market is already worth more than US$63 billion and this is not going to disappear overnight. Treasury has not assumed global emission trading – it has assumed global action which to an extent is already happening.”

“Treasury assumes, for example, that China will not take action to slow emission growth until 2013 or 2015. China’s existing policies and goals for energy efficiency improvements and commitment to increase renewable energy use are projected to reduce China’s emissions growth by twice that projected in Treasury’s most ambitious scenario.”

"It’s time business stopped recklessly distorting economic analysis and we got on with the job of growing a low-carbon economy starting with a reduction of at least 25 per cent off 1990 levels by 2020,”  said Mr Connor.

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