Sep 22, 2008 - 12:00am
Introducing an emissions trading scheme without complimentary
measures such as energy efficiency and renewable energy targets could
cost the electricity sector more than $40 billion, modelling
commissioned by the Climate Institute reveals.
A report by leading
energy modellers McLennan Magasanik and Associates (MMA) shows that
moderately ambitious energy efficiency improvements and the Government’s
renewable energy target (RET) will slash billions off the long-term
cost of reducing emissions from Australia’s electricity sector which
contributes around a third of total national carbon pollution.
modelling shows that the most cost effective way to clean up
Australia’s electricity generating sector is by tapping into huge energy
efficiency opportunities and unleashing our clean energy potential,”
Climate Institute CEO John Connor said.
“A smart policy mix,
especially if combined with extra policies to bring forward solar
thermal and carbon capture and storage, can not only help transform our
energy sector but provide important economic opportunities in the
burgeoning clean energy market of the Asia Pacific region.”
analysis also concludes that a soft start, limiting carbon price rises
from $15 in 2010 to $35 a tonne by 2020 would not restrict pollution or
only marginally reduce it even with comparable energy efficiency and
renewable energy targets.
“Soft starts which put a brake on carbon
prices also put the brakes on clean technology development. And, if
Australia and other countries fail to set strong emission reduction
targets we risk catastrophic climate change threatening our economy and
children’s futures,” said Mr Connor.
Modelling also showed that
energy efficiency and the RET would decrease electricity price impacts
compared with introducing an emissions trading scheme on its own. While
electricity prices do increase, with continuing economic growth, the
proportion of average household incomes spent on electricity falling
from 2.5 per cent today around one per cent in 2050.
scientifically and internationally credible target of at least 25% off
Australia’s total 1990 carbon pollution levels by 2020 will require
additional measures to achieve reductions across energy, urban design,
transport and agriculture. Separate analysis by The Climate Institute
show this is affordable with at least half of the reductions coming as a
net saving to the economy.
“A smart mix of policies can ensure
smart and affordable investments in making the shift to a globally
competitive low carbon economy.”