Battle over climate change costs

Labor says its emissions reduction policy is impossible to cost as businesses will take the reins on how to reduce their own pollution, after the Coalition put the bill at up to $26 billion.

Labor’s climate change spokesman Mark Butler has hit back at the Federal Government’s latest modelling, saying the figures were ‘‘utterly ridiculous’’.

‘‘It is inherently impossible to model in a precise way, because what we’re doing is leaving this up to business,’’ he told ABC News yesterday.

‘‘That’s what business has asked us to do.’’

Businesses asked for the lowest cost range of offsets and could also change how they operate to reduce pollution, he said.

Federal Treasurer Josh Frydenberg has pointed to analysis by his policy team putting the cost for business between $13 billion and $26 billion across 10 years under Labor’s measures.

Mr Butler said the modelling was based on ‘‘ridiculous’’ assumptions, including that not a single company would do anything domestically to reduce emissions.

Offsets would cost four times what the government’s own ‘‘climate solutions’’ modelling suggested.

Labor was proposing an emissions reduction target of 45 per cent by 2030 on 2005 levels, compared to the Coalition’s goal of a 26 per cent reduction.

Prime Minister Scott Morrison has demanded Labor leader Bill Shorten reveal the economic cost of higher targets.

The cost of Labor’s policy largely rests on the price of international carbon offsets, which the top 250 polluters could buy if they did not adequately reduce pollution.

The Investor Group on Climate Change said companies were already considering carbon pricing in strategies and investment decisions.

AGL, Bluescope, BHP Billiton, Chevron and Rio Tinto were among companies that applied carbon prices to decisions, with prices ranging to $12.50 a tonne at present to $140 a tonne by 2040.

Bloomberg New Energy Finance special projects boss Kobad Bhavnagri said it was impossible to know the price of international offsets past 2020 as the United Nations had not developed the rules to govern the market.

Mr Bhavnagri said forecasts were always overestimated.

‘‘That is because forecasters like me cannot anticipate human ingenuity and innovation,’’ he said.

The Australia Institute said failing to act on climate change would have a greater cost on the economy, with losses to agricultural production and impacts on human health.

Story from The Shepparton News - “Battle over climate change costs.”