FOR those whipping up concern about soaring living costs under a carbon price, Ross Garnaut emerged yesterday with a message: get some perspective.Yes, living costs will go up. But that increase will pale compared to price rises already being felt.

Take petrol. A starting carbon price on the scale proposed by Professor Garnaut - between $20 and $30 per tonne of greenhouse gases emitted - would increase the price at the pump by 5¢ to 7¢ a litre.

Yet in any given week, petrol prices already fluctuate by up to 13¢ a litre. Nationally, the average price has jumped 25¢ a litre since September, including 8¢ in just three weeks as turmoil hit the Arab world in February and March.

Or take the Australian dollar - up nearly 20¢ in relation to the US dollar during 2010. If that rise continued, it would have a far larger impact on the economy than a carbon price.

Or take interest rates. Under Labor's shelved emissions trading scheme, an average household's costs was expected to rise by $624 a year, assuming a target of a 5 per cent cut in emissions. A 0.25 percentage point rate rise increases the average new Australian mortgage by only slightly less - $565 a year. Rates rose four times last year.

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The initial, one-off impact of a carbon price on inflation is expected to be about 1 per cent. Under the GST, inflation rose 2.8 per cent. The economy got through that OK.

Considering that the government has pledged substantial compensation for households, some Australians are likely to end up better off than before if they become more efficient and reduce their bills. It's hardly the disaster that the current debate would suggest.