“Every Australian needs to understand that if Mr Rudd in our name, on our behalf, accepts cuts in the order of 25 to 30 per cent by 2020, that will have a devastating impact on our own economic development,” leader of the opposition Brendan Nelson told Australians yesterday.
“It would have a serious consequence for electricity bills and many other burdens borne by working families in day-to-day life, and pensioners.”
It is of course the same outcome former Prime Minister John Howard was warning voters to expect should they vote Labor into power on November 24. Despite the threat to our beer money, it appears that the alternative — waterfront property for all — was a scarier proposition.
But obviously both Howard and Nelson missed reading Crikey on 8 June, 2007, when we revealed that electricity prices in a carbon constrained future won’t necessarily devastate household budget:
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The National Emissions Trading Taskforce established by the states — which differs from the former PM’s Emissions Trading Taskgroup — has projected the additional weekly cost of electricity with an emissions trading scheme in operation. Their workings encompass three possible scenarios:
Scenario 1: Emissions capped at 2000 levels without substantial energy efficiency measures, which offers a 33% reduction in CO2 emissions at forecast 2030 levels.
Scenario 1a: The same as scenario 1 but with higher levels of energy efficiency.
Scenario 2: Emissions capped at approximately 1997 levels, offering a 43% reduction on forecast emissions for 2030.
(For a full explanation of the scenarios click here and scroll to page 91.)
Table: Average price increase for residential customers’ electricity ($/week) under carbon emissions reduction schemes:
Under scenario 2 residents of the Northern Territory will be hardest hit, paying an extra $229.32 a year for their electricity by 2030.
But using these assumptions, that’s as bad as it gets. Under scenario 1a, the national average is over $50 less — $88.68 per annum, or $1.71 per week. Under scenario 1 we’ll be paying an extra $114.77, or $2.20, per week.
The Heat Is On, a report on the future of energy in Australia by the CSIRO’s Energy Futures Forum, which includes corporate players like Xstrata Coal, Origin Energy, BHP Billiton, Orica Australia, and Rio Tinto, adds further context to the price increases:
While retail electricity prices will increase by 2050 by between 7 and 20%, those increases will be below the change in real income per capita in Australia which is expected to rise by over 100% by 2050 as GDP increases. By 2050, the average share of full time wages spent on electricity is expected to decline from around 1.1% in 2006 to 0.5 and 0.7. This is inclusive of carbon prices imposed in the scenarios.
The ABS has some relevant numbers, too. In February 2007, Australian workers (including part timers) took home on average $857.60. An additional $2.20 per week represents only 0.26% of that figure. And as we see above, the Energy Futures Forum caps the additional expense of running our toasters and TVs under an emissions trading scheme at only 0.7% for full-time workers by 2050.
Then again, maybe Mr Nelson’s definition of “devastation” differs from, say, the dictionary’s.