You may not have heard it amid all the shrill cries this week for corporate welfare and carbon protectionism but earlier this week a National Greenhouse Gas Inventory showed our national carbon pollution levels continue to rise.

Our record as one of the highest carbon polluters per person, our standing as one of the top 20 carbon polluting countries in absolute terms are yet to be threatened.  And without stronger pollution and clean energy policies our position in the top 10 dirtiest power sectors is looking solid.

Amid all the jockeying for compensation, support and windfall gains, some legitimate, most not, pollution and clean energy policies have been made a scapegoat for the real drivers of electricity prices.

The Climate Institute today has hit out at the growing campaign of misinformation being driven by vested business and political interests and is urging the issue of pollution costs be put in perspective.

We have released research that details how current electricity price rises are primarily being driven by the cost of network wires and poles upgrades, and not pollution and clean energy policies.

The research also reveals Australia’s power sector ranks among the 10 most polluting power sectors on the planet, alongside Botswana, Cambodia and Estonia, emphasising the need for Australia to get serious about transforming its economic base.

No one denies there will be costs associated with transforming the Australian economy from one reliant on highly polluting industries to one based on cleaner energy and cleaner industries, but misleading claims are being made.

A pollution price of $25/tonne will add about $3.86 per week to the average Sydney household’s energy bill in 2012/13. This is slightly higher than the amount estimated by Treasury, but a third less than suggested by the Coalition and some business groups.

Rising network costs — which have nothing to do with a pollution price and will happen regardless — will have greater impacts at $7.88 per week.

Energy efficiency policies can further reduce the impact of pollution prices by at least $1.41 per week, reducing the difference to $2.45 per week. This is about the cost of a sausage sandwich at a local community fundraiser, or a fifth of the value of food wasted by the average household each week.

The federal government has made clear there will be assistance provided to those lower-income families who may struggle to pay the additional costs that result from making polluters finally start to pay for their pollution.

Unlike the other factors that are affecting electricity price rises, a pollution price will work to generate revenue from big polluters, which can then be used to support energy efficiency, develop clean energy and help low-income communities manage the transition to cleaner energy in Australia.

Most importantly, and this point was missed by some Coalition politicians and Mark Latham in the AFR today, making dirty power generators pay for their carbon pollution for the first time will help drive investment in, and greater generation from, cleaner energy sources.  Cleaner energy becomes cheaper to produce and sell relative to dirtier energy paying for its pollution.  Price increases will be passed through the system and affect consumer behaviour but the primary targets are the energy producers not the consumers.  A different dynamic is at work for petrol but that’s a story for another time.

There is no doubt there are challenging electricity price increases in the system, they are there regardless, but the potential impacts and outcomes of pollution and clean energy policies needs to be put in perspective.

As The Climate Institute submission to the Multi-Party Committee details, Australia needs a mix of carbon pollution pricing, energy efficiency, emissions performance standards and clean energy policies to drive innovation and deployment of cleaner energy and cleaner industries.

Pollution and clean energy policies can make a real difference to Australia’s pollution dependent economy and can help spark investment in our abundant clean energy resources.

Peter Fray

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