The evidence is clear that an emissions trading scheme will not wreck the economy but will create long-term good for the economy and the environment, according to the Western Australian Sustainable Energy Association Inc. (WA SEA), the WA business chamber for the sustainable energy industry.
WA industry body welcomes ETS analysis, but asks why assumptions do not account for opportunities.
• ETS will grow economy and create an economic stimulus for change
• Federal Government must provide incentives to reduce energy use
• Federal Government must eliminate taxes imposed on increasing energy efficiency
• Modelling does not include benefits that will lead to new projects and new jobs and diversify energy supply in the clean energy sector
"Claims by some industry sectors that an emissions trading scheme would be devastating for Australia's economy simply do not add up," says Dr Ray Wills, Chief Executive of WA SEA.
"The carbon market in the first few years of operation will probably only have a total annual value of $3-4 billion, and less than $12-16 billion in the slightly longer term. The value of one day of trading on the Australian share market is more in dollar terms than would be traded in an entire year in an established carbon trading market. Compared to daily trades on the share market, carbon trading will be small change - on rough numbers the value of carbon trading will be much less than $20 million per day."
"The truth is the total value of carbon traded annually will be, in financial markets terms, very small. Indeed, as emissions reduce, the number is more likely to fall - unless we are ineffectual in rolling out energy efficiency across the nation, and fail to commit to quickly build renewable energy generation" says Dr Wills.
State and Federal Governments can offer immediate relief to all Australians by getting on with eliminating those taxes and charges that add costs to becoming more energy efficient and reducing Australia's greenhouse gas emissions.
One simple example is stamp duty relief for all buyers investing in either new or retrofitted housing that exceeds five star energy and water efficiency standards
"Long-term measures to improve energy efficiency in both households and businesses will have the potential to cut energy bills by 30-50%, changes that will far outweigh small percentage increments in the unit price of energy," says Dr Wills.
Governments must provide both tax relief and incentives that promote business and community investment in energy efficient buildings, appliances and vehicles, and drives the development of a portfolio of renewable energy generation, including powering government operations on renewable energy.
Incentives to invest in energy and water efficient homes will ensure home owners and tenants will continue to reap rewards - an enduring tax cut by savings in energy costs, and of course reducing greenhouse gas emissions.
Model assumptions do not include benefits that will
• lead to new projects and new jobs and diversify energy supply in the clean energy sector,
• create productivity improvements as a consequence of greater energy efficiency, improvements that will enhance the competitiveness of Australian industry, and
• realise a greater certainty of fuel costs that comes with renewable energy, reducing exposure to the commodity price fluctuations in non-renewable energy sources.
A combination of an emissions trading system, paired with direct incentives for industry and the community to reduce emissions through both energy efficiency and procurement of lower emissions energy, will actually diversify the economy and create a more robust environment for business and a more sustainable economy.
"Australia is the Middle East of renewable energy and we are failing to harvest the energy bonanza for the benefit of the Australian economy and that will ultimately prove to be to the advantage of Australia's export industries," says Dr Wills
WA Sustainable Energy Association Inc. (WA SEA) Media Release - 30 October 2008
Dr Ray Wills 0430 365 607
1. Treasurer and the Minister for Climate Change and Water released Australia's Low Pollution Future: The Economics of Climate Change Mitigation on the 30 October 2008 - details at http://www.treasury.gov.au/lowpollutionfuture/.
2. The Western Australian Sustainable Energy Association Inc. (WA SEA) is a chamber of businesses variously promoting, developing and/or adopting sustainable energy technologies and services that minimise the use of energy through sustainable energy practices and maximise the use of energy from sustainable sources. WA SEA is supported by a growing membership of 195 industry members from a diversity of businesses including many of the key energy players in Western Australia www.wasea.com.au.