The Electricity Users Association of Australia (EUAA) is today launching a report prepared by Deloitte Access Economics that warns of an estimated $64 billion in damages to the national economy by 2020 if  a nationwide price on carbon is introduced.

 

The report uses modelling that shows that the combined impact on GDP by 2020 of a renewable energy target and a carbon price to reduce emissions by 5 per cent  would be $64 billion. The report also predicts that up to 127,500 jobs would be lost and real wages could fall as much as 5 per cent.

 

The report outlined as the most likely scenario a  carbon price combined with a 20% RET by 2020 which it estimated would cause electricity prices to rise by as much as 121 per cent in the absence of a global carbon trading scheme. If a global trading scheme were in place, the electricity price rise would be 82% by  2020.

 

The report finds that the cost to the country would be substantially higher if other countries did not follow suit in establishing a price on carbon.

 

"Should trading be constrained by a lack of global action, carbon prices to meet this unconditional target are likely to rise substantially" the report found.

 

"Analysis shows carbon prices rise from $45 to $70 per tonne of CO2 at 2020 when international trading is not allowed [for]." However, the report found that the RET would compound the impact of the trading scheme, causing the cost of abatement to blow out to between $87 and $115 a tonne at 2020.

 

Under the government's proposed carbon tax scheme, carbon is likely to be priced at between $23 and $26.