Protecting polluters slugs households as we clean up energy sector Media Release

Jun 16, 2011 - 5:22pm

The Climate Institute today released new analysis showing that protection for big polluters under the Renewable Energy Target will cost households and other businesses an estimated $7.1 billion over the life of the scheme

Climate Institute CEO John Connor called for an end to scapegoating of renewable energy programs and said it was time for the claims and compensation of big polluting industries to come under regular and rigorous scrutiny.

“Some in politics, business and the media would have you believe that clean energy schemes have caused all the recent electricity price increases when recent regulator reports show that the cost of renewable energy schemes will make up just 4% of average household energy bills in NSW. This is around $1.20 per week,” said Mr Connor.  

“The Renewable Energy Target is a critical tool to help clean up our ageing energy sector. Australia has the eighth most carbon polluting electricity sector on the planet and the Renewable Energy Target is essential to build capacity to cost effectively meet long-term pollution reduction targets and to unlock jobs and investment in Australia’s abundant clean energy resources like wind, solar and geothermal.” 

“However analysis in the TCI’s report “Shielding The Big Polluters” shows that to fund protection for some big polluters, households are paying around 23 per cent more for renewable energy than they otherwise would, an estimated $2.7 billion over the life of the scheme.”

“The entire economy ultimately benefits from clean energy investments. Big polluting, trade-exposed industries consume around 25 per cent of Australia’s electricity but currently help to pay for only around 8 per cent of the total effort of the Renewable Energy Target,” said Mr Connor.

The Shielding the Big Polluters report reveals that over the life of the Renewable Energy Target scheme, this burden on households and other business is valued at approximately $7.1 billion, or $338 million per year on average.  Approximately $4.4 billion of the subsidy will be paid by non-trade exposed businesses, while around $2.7 billion will be paid by households.

Protections for trade exposed big polluters under the Renewable Energy Target mirrored those under the proposed CPRS and are likely to be the basis of the carbon pricing scheme now under negotiation. The Renewable Energy Target granted some big polluters either a 60 per cent or 90 per cent exemption from the scheme’s costs, depending on pollution levels. 

“To ensure households don’t unnecessarily bear the brunt of polluter protections, assistance must be reduced over time and be tied to regular independent reviews of new international policy developments,” concluded Mr Connor.        

“The Climate Institute supports some protection for some trade exposed big polluters whose competitors genuinely don’t face similar costs and leakage would lead to higher global emissions. But this pollution protection must be kept under constant and close scrutiny as recent Productivity Commission and Garnaut reports show other countries are implementing clean energy and carbon pricing schemes.”

For further information: 

John Connor | CEO, The Climate Institute | 02 8239 6299

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