May 02, 2013 - 8:44am
The Climate Institute today said lower than expected short-term carbon prices will lower the costs of stronger Australian carbon pollution reductions.
“Reports in the Financial Review that Treasury has, on the basis of lower than expected global prices, revised the expected Australian 2015 carbon price down to $15/tonne means the cost of stronger and fairer emissions reduction has gone down too,” said John Connor, CEO of The Climate Institute.
“Both major parties have committed to reduce emissions by up to 25 per cent on 2000 levels by 2020, dependent on global actions."
"Whoever is in Government in 2014 will need to indicate final 2020 targets and should do more than the ‘unilateral’ 5 per cent reduction target based on an assumption of global inaction."
“Our analysis and that of other international experts indicates that with the current commitments and actions other countries are taking, Australia’s minimum emission reduction commitment should be up to 15 per cent by 2020.”
"Australia will likely remain a carbon price taker on global markets. Our demand, even with more ambitious targets, would likely have a marginal impact on global prices in the EU and elsewhere.”
”This, to a significant extent, decouples Australia’s emission reduction ambitions from the prices faced by business.”
“Australia can and should use low international carbon prices as an opportunity to have stronger targets and to help build global ambition to address accelerating climate change impacts.”
“Fostering greater global ambition makes good economic sense and remains in the national interest. Extreme weather impacts like recent extraordinary floods and fires are already costing our economy billions of dollars and impacting the health and well-being of many Australians.”
“There are two sides to the budgetary coin, this revision does impact revenue but so too do climate and extreme weather shocks which will also require ever increasing expenditures.”
“Some forecasts suggest high prices are more likely and others suggest lower, the core is issue is that lower prices offer an opportunity for Australia to meet strong emission targets at lower cost.”
“International emission reductions are not, however, an excuse for not reducing emissions at home."
“In the absence of a carbon price floor, short-term low carbon prices strengthen the case for policies such as the Renewable Energy Target to help grow a lower carbon Australian economy until global prices better reflect the benefits of reducing emissions in the medium to long-term,” concluded Connor. For more information
Kristina Stefanova | Communications Director, The Climate Institute | 02 8239 6299
John Connor | CEO, The Climate Institute | 02 8239 6299