The budgetary cost of persuading the National Party to support Scott Morrison’s net zero target are trivial compared to the costs to the economy of delaying new investment according to a new Australia Institute analysis of economic modelling.
The Business Council of Australia recently released modelling by Deloitte Access Economics of the economic benefits of introducing a 46 percent target for 2030 and a net zero target for 2050. Deloitte released similar modelling last year of the benefits of a 2050 net zero target without a more ambitious 2030 target. A comparison of the two modelling exercises reveals that a more ambitious 2030 target has a net present value of $210 billion.
“According to modelling conducted by Deloitte Access Economics, a 46 percent emissions reduction target for 2030 would lead to more investment, more jobs, lower electricity prices and more than $210 billion with of economic benefits. The idea that Scott Morrison would compensate the National Party for imposing such harm on the Australian economy is simply bizarre,” said Dr Richard Denniss, chief economist of the Australia Institute.
“It is not uncommon in Australian politics for a government that is determined to introduce a big reform to compensate some groups, but this is the first time an Australian Prime Minister has offered compensation to the very group that is imposing harm on the broader community.
“It is quite clear that investing more money in renewable energy, storage and energy efficiency over the next 9 years will bring forward job creation, electricity price reductions and productivity growth. Such new investments will cause no harm to the farming or mining sectors, but will help address climate change and start creating jobs in regional areas today.
“Scott Morrison is using climate change as an excuse to shovel taxpayer money to the National Party in exchange for them ruling out any early reforms. They are asking for billions of dollars in compensation despite the fact that they have not provided a single piece of evidence that a more ambitious 2030 target will hurt anything other than their egos,” Dr Denniss said.
Background – quotes from the Business Council of Australia Report
“The economic benefits of Australia decarbonising faster and earlier are twofold: local regional transitions can be better planned and therefore come at a lower economic and social cost; and economic growth will be stronger off the back of a greater share of new green export industries.
“Increasing the share of renewable generation in our electricity system is not just important for reducing emissions, it’s fundamental to driving down electricity prices for consumers establishing new export industries.
“To capture this economic opportunity, Australia must act now to invest in the development and deployment of these new technologies and become a world leader.
“To capture this economic opportunity, Australia must act now to invest in the development and deployment of these new technologies and become a world leader.”