What Greg Hunt didn't say about the carbon price and emissions

Updated

There's been a lot of hot air blowing around on Labor's carbon policy, including that its pricing scheme has not managed to stem emissions in the 15 months it's been operating.

New federal Environment Minister Greg Hunt says that under the carbon price emissions have actually increased. And in an interview with Lateline last week he quoted figures to back up the claim.

"The strange thing about the carbon tax was that emissions went up, not down, from 560 to 637 million tonnes," Mr Hunt said.

He was unequivocal. The carbon price "doesn't work", "doesn't do the job" and is "a just hopeless means of achieving the outcome," he said during the interview.

The claim: Greg Hunt says emissions went up under the carbon price from 560 to 637 million tonnes.

Greg Hunt says emissions went up under the carbon price from 560 to 637 million tonnes. The verdict: Mr Hunt based his claim on modelling for the year 2020. He failed to mention that the same modelling projects that emissions would go up further if a carbon price wasn't in place. Mr Hunt's claim is misleading.

But Mr Hunt's claim is not so cut and dried.

A spokesman for the minister said the numbers came from a 2012 report by the Climate Change Department. That report does contain the 637 million tonnes figure, but not in the context Mr Hunt used in the Lateline interview. The report says that under Labor's carbon pricing scheme emissions are likely to be 637 million tonnes in 2020.

It's a projection that takes the carbon price into account and predicts where our emissions will be in seven years time with a market-based carbon pricing method in place. The same report also finds that without the carbon price, emissions would be 8 per cent higher in 2020.

Mr Hunt has used modelling predicting an outcome in seven years' time to say the carbon price as it stands today is not effective. The figures are projections, not fact, and cannot be used to make a point about emissions rising over the 15 months the carbon price has been on the books.

The most recent official data on emissions from the Climate Change Department is for December 2012, which covers the first six months of the carbon price.

At the end of 2012, total annual carbon emissions stood at 552 million tonnes, around the same as at the end of 2011.

Sectors covered by the carbon price

Not all emissions are targeted by the carbon price. The government's Clean Energy Regulator says the carbon price applies to about 60 per cent of Australia's emissions. Electricity generation, stationary energy combustion, landfills, wastewater, industrial processes and fugitive emissions are all covered but transport, agriculture and other waste aren't. You can read more about what those categories cover here.

In the first six months of the carbon price, emissions from the sectors covered by the carbon price were 1 per cent lower than the same period the year before.

The Climate Change Department report says the fall was largely due to a decline in emissions from electricity. This sector is particularly significant as it accounted for 35 per cent of Australia's carbon emissions in 2012. Between December 2011 and December 2012, electricity emissions dropped around 10 million tonnes. This was a fall of 7 per cent.

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However, it is not possible to say how much emissions fell as a result of the carbon price.

Still, a report by the Climate Institute, a climate change research body, says the carbon price is contributing to the drop in electricity emissions. It is making renewable energy - like solar and wind power - more competitive with fossil-fuel generation. A report by ClimateWorks Australia, another research body whose website says it is "committed to catalysing reduction in greenhouse gas emissions", identifies rising energy costs and the carbon price as key drivers behind decreases in carbon emissions.

Consulting firm AECOM surveyed how business owners and managers reacted to the new regime. Thirty-nine per cent of respondents said the carbon price had affected investment decisions. Thirty per cent said it had affected contractual decisions and 17 per cent said it had affected decisions about staff and employment.

The carbon price is just 15 months old. For a policy with long-term goals, this is a short period of time. But early indications suggest the carbon price is having an impact.

The verdict

Mr Hunt based his claim on modelling for the year 2020. He failed to mention that the same modelling projects emissions would go up further if a carbon price wasn't in place. Mr Hunt's claim is misleading.

Sources

Topics: environment, climate-change, federal-government, liberals, australia

First posted