- ‘Emissions reduction value’ set at $66 per ton
- It effectively works as an emissions tax.
- The additional cost will be passed on to consumers.
- READ MORE: New emissions rules for motorists
Energy bills in Australia could rise by up to $1,300 a year to cover the cost of emissions reductions, described in a new study as a “stealth carbon tax”.
State and federal energy ministers brought together by Albanese’s government agreed last year to price the “value of emissions reductions” at $66 per tonne.
The figure is almost three times higher than the carbon price set by the Gillard government, $23, which was scrapped by the Abbott government in 2014.
Energy bills in Australia could rise by up to $1,300 due to emissions reduction costs agreed by federal and state energy ministers.
Australia’s emissions costs will continue to rise to reach $420 a tonne by 2050.
Although the value of emissions reductions is called a “price”, in practice it works like an emissions tax.
A study published Thursday, co-authored by Aidan Morrison, director of energy policy at the Center for Independent Studies, said the costs of the measure will be passed on to consumers, Daily Telegraph reported.
The study estimates energy bills in Australia could increase by between $855 and $1,294 per household per year.
Morrison believes energy giants will pass on the high upfront costs of projects to customers to save on effective tax in the future.
The Center for Independent Studies study claims that energy giants will pass on the high up-front costs of low-emissions projects to customers to save on effective tax in the future.
“This change is likely to increase the assessed benefits of projects that aim to reduce emissions, projects that would otherwise have been considered uneconomical,” their paper reads.
‘There may be a legitimate argument that a carbon tax is an efficient way to reduce emissions. But the way energy ministers have progressed this prevents any discussion in parliament on the matter or any external consultation.
‘This is a masterclass on how to introduce a carbon tax by stealth. This change will allow major transmission and distribution projects that will increase energy bills to be quickly approved by the energy regulator using the carbon price to increase their apparent “market benefits.”
Meanwhile, Federal Resources Minister Madeleine King will on Thursday unveil the government’s Future Gas Strategy, in which Australia commits to producing gas beyond 2050 to support renewables and support manufacturers.
To offset opposition to continued use of fossil fuel, the government will support carbon capture and storage projects to help reduce emissions from gas projects, despite questions about the technology’s effectiveness.
“The energy transformation will take time: it will require investment in renewable energy, new industrial processes and new technologies,” said Ms King.
‘Cutting off gas overnight would cause untold damage to our economy, impede efforts to reach net zero emissions here and have a severe impact on our region, which is the fastest growing in the world.
“Pretending otherwise is counterproductive and will not help Australia and our region reach net zero emissions by 2050.”