The Australia Institute has reviewed economic modelling of climate policies released today by Brian Fisher of BAEconomics. The Institute’s review shows that BAEconomics’ modelling is based on flawed assumptions and its conclusions are not valid.

Key problems with BAEconomics model:

• Does not incorporate rapidly declining costs of renewable energy, storage and electric vehicle. Minimal disclosure of modelling approach on clean tech improvements.
• Assumes aging and unreliable fossil fuel generators become more efficient each year.
• Assumes ongoing growth in coal production – despite Australian thermal coal production having peaked in 2015.

“While there is legitimate debate on the best climate policy for Australia, it must be based on facts,” said Richie Merzian, Climate & Energy Program Director at The Australia Institute.

“The Energy Minister has the entire public service at his disposal. It is strange that he prefers the work of a consultant to the Minerals Council to the research of his own department.”

“BAEconomics assume firming costs for renewable energy up to $200 MWh when the Government-owned Snowy 2.0 is offering firmed renewable contracts at $70MWh,” said Rod Campbell, Research Director at The Australia Institute.

“There is simply no evidence for the claim that a 45% emissions target would be an ‘economy wrecking target.’ In fact, Australia Institute research finds that Australia can reduce emissions by far more than 45% with minimal impact on the economy.”