(Australian Associated Press)
Labor says its emissions reduction policy is impossible to cost as businesses will take the reins on how to reduce their own pollution, after the coalition put the bill at up to $26 billion.
Labor’s climate change spokesman Mark Butler has hit back at the government’s latest modelling, saying the figures are “utterly ridiculous”.
“It is inherently impossible to model in a precise way, because what we’re doing is leaving this up to business,” he told ABC News on Wednesday.
“That’s what business has asked us to do.”
Businesses asked for the lowest cost range of offsets and can also change how they operate to reduce pollution, he added.
Treasurer Josh Frydenberg has pointed to analysis by his policy team putting the cost for business between $13 billion and $26 billion over 10 years under Labor’s measures.
Mr Butler said the modelling was based on “ridiculous” assumptions, including that not a single company would do anything domestically to reduce emissions.
Offsets would cost four times what the government’s own “climate solutions” modelling suggested.
Labor is proposing an emissions reduction target of 45 per cent by 2030 on 2005 levels, compared to the coalition’s goal of a 26 per cent reduction.
Prime Minister Scott Morrison has demanded Labor leader Bill Shorten reveal the economic cost of higher targets.
The cost of Labor’s policy largely rests on the price of international carbon offsets, which the top 250 polluters can buy if they don’t adequately reduce their pollution.
The Investor Group on Climate Change says companies are already considering carbon pricing in their strategies and investment decisions.
AGL, Bluescope, BHP Billiton, Chevron and Rio Tinto are among companies that apply carbon prices to decisions, with prices ranging to $12.50 a tonne at present to $140 a tonne by 2040.
Bloomberg New Energy Finance special projects boss Kobad Bhavnagri says it’s impossible to know the price of international offsets past 2020 as the United Nations hasn’t developed the rules to govern the market.
Mr Bhavnagri says forecasts are always overestimated.
“That is because forecasters like me cannot anticipate human ingenuity and innovation,” he told AAP.
“But experience has clearly shown that once goals are set, innovators and businesses get to work and always find cheaper and better ways to do things.”
He says it could be cheapest to stay away from overseas credits and stick locally.
“Australia has some of the best renewable energy resources in the world, lots of low hanging fruit in energy-efficiency and a vast land sector for agriculture and forestry based credits,” he said.
The Australia Institute says failing to act on climate change will have a greater cost on the economy, with losses to agricultural production and impacts on human health.