Thursday, March 18, 2010

The Price Of Emissions Trading Is More Than $300 A Year

Some of the reporting in the press about today’s announcement of increased electricity prices has clearly implied that consumers will be slugged with bigger bills to pay for an emissions trading scheme that hasn’t even been passed by Parliament yet, let alone come into operation. That implication is wrong. The announcement made by the Independent Pricing And Regulatory Tribunal C. E. O. Jim Cox today clearly states that customers will not be footing the bill for the Carbon Pollution reduction Scheme until and unless it is introduced. What the announcement does tell us however is just how much the CPRS will cost if it does go ahead.

In 2013, Energy Australia customers can expect to be paying about $754 more for their electricity if the CPRS is introduced, and $448 more if it is not. Integral Energy customers will pay about $577 more with the CPRS, and $246 more without the CPRS. Country Energy customers can expect the biggest increases with a bill of $918 a year more with the CPRS, or $601 without. In every case the difference between having an emissions trading scheme and no emissions trading scheme is more than $300 a year. In the overall scheme of things it may not sound like a lot, but for some people it makes the difference between a decent meal and toasted sandwich.

The well defined impact of the CPRS on the price of electricity can only drive home Tony Abbott’s message that it amounts to “a great big tax on everything.” It’s a clear message to ordinary everyday Australians that we will all be picking up the cost of climate change policy, whether we believe in it or not. Of course, it is unlikely that the CPRS will be passed by the Senate anytime soon, and it is possible that it might never be introduced at all. But even without the emissions trading scheme the price rises will still outstrip inflation, and income growth. That’s because of increased “network costs”, over which IPART has no control.

It is clear that these prices disadvantage country customers more than anyone else, and any price rises will obviously disadvantage low income earners disproportionately. If you are a low income earner in the country then you’re just dead unlucky. IPART has recommended that the State Government should increase and extend its assistance to more low income earners to counter the social impact of these ever increasing prices. With just over one year left until the election the New South Wales Government cannot avoid, they would be foolish to ignore that recommendation.

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