Shaky data behind new industry ad campaign Media Release

Jul 24, 2011 - 11:34am

The independent Climate Institute today warned that claims to be aired tonight in a multi-million dollar TV advertising blitz by big polluters are not backed by facts. The Institute also released data from a former World Bank economist which shows Australian clean energy investment ranked 97th out of 174 nations.

“This new industry alliance is just another shady front group with more shaky numbers as they argue for more delay, exemptions or special treatments,” The Climate Institute CEO, John Connor, said

The Australian Trade Industry Alliance says the European Union (EU) generated $4.9 billion in the first six-and-a-half years of its emissions trading scheme. It then claims that Australia’s carbon tax will generate $71 billion over its first six years.

But Mr Connor said the ads do not mention that the EU is expected to generate between $143 billion and $296 billion over the next six years.

He said TCI’s preliminary analysis shows that over the first six years of the Australian carbon price, the total potential revenue available to the Federal Government will be around $61 billion, much less than the $71 billion claimed by the Alliance.

“Even if we assume there is 100 per cent auctioning in Australia (with no free allocations to industry) the total revenue to the Government would be around $61 billion over the next six years. This is $10 billion less than claimed by the big polluters.”

However, in reality the Government will collect only about $35 billion over this period, with over $26 billion of the potential revenue foregone through the allocation of free pollution permits to industry.

“The net revenue to government, after accounting for the free allocation of permits to trade exposed industries and electricity generators, is about $35 billion over the first six years, the bulk of which will be used for tax cuts and cash payments to households and to support renewable energy and energy efficiency,” Mr Connor said.

“The $71 billion claimed by the Alliance appears to be a sleight of hand at best.”

“By comparison, it is estimated that Phase III of the EU ETS will raise between AU$143 to AU$296 billion. That’s around nine times the amount raised in Australia, which isn’t surprising given their market is so much larger than Australia’s.

“It is true that Australia will have higher initial rates of auctioning than EU, but that is a strength of the Australian system which has learnt much from Europe’s early mistakes which gave too much protection and allowed windfall gains for some of the biggest polluters.

“No surprises that many of the companies lurking behind this alliance are after similar free rides or even the windfall gains of the early European scheme.

“While some in Australian business keep looking for new excuses and exemptions, new analysis from former World Bank economist David Wheeler shows relative clean energy investment in Australia between 1990 and 2008 placed Australia97th out all 174 nations.”

The data finds that China spent 94 cents of every $10,000 of average income on clean energy between 1990 and 2008. The United States, by contrast, spent 44 cents of every $10,000 and Australia spent 12 cents. Overall developing nation investment between 1990 and 2008 avoided 559 million tonnes of pollution compared to only 262 in developed nations.

For more information:
Giulia Baggio | Communications Director | 03 9600 4039

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