The new modelling shows the impact of a carbon price starting at $23, and updates to the policy parameters of the national and sectoral economic modelling contained in the Strong growth, low pollution: modelling a carbon price (SGLP) report.

Two additional scenarios, one that reflects the Clean Energy Future package endorsed by the Multi Party Committee on Climate Change, with a starting carbon price of $23 per tonne of carbon dioxide emissions instead of the $20 per tonne modelled in the SGLP report; and one that also includes additional Government policy measures, are provided in the update

The main additional results in the new modelling update are:

  • The higher starting price reduces domestic emissions by an additional 5 million tonnes of carbon dioxide over the first three years of the scheme
  • The Government measure to apply an effective carbon price to fuel used by heavy road vehicles from 1 July 2014 reduces Australia’s domestic emissions by an additional 4 million tonnes of carbon dioxide in 2020 and 20 million tonnes in 2050, and lowers the cost of meeting Australia’s emission reduction targets
  • Updated electricity sector modelling confirms the estimated 10 per cent increase in electricity prices in 2012-13 from carbon pricing presented in the SGLP report.