There’s no great mystery about what Opposition Leader Anthony Albanese’s net-zero-by-2050 emissions announcement last weekend will cost. The answer: trillions galore. How do I know? Because Dr Brian Fisher, former head of the Bureau of Agricultural Economics, who has no political allegiance and no vested interest, last May in the run-up to the federal election costed a much weaker version of Albanese’s plan. These costs were astronomic: a maximum $540 billion by 2030.

Then-opposition leader Bill Shorten’s plan was for a 45 per cent cut in CO2 emissions on 2005 levels by 2030. Note, firstly, how much less stringent is this compared with Albanese’s net-zero by 2050, especially as the initial work plucks the low-hanging fruit and thereafter the abatement costs rise exponentially.

New Zealand’s prime minister, Jacinda Ardern, last year announced carbon neutrality by 2050. In a rare but commendable bit of sanity, she asked a respected economics institute to estimate the cost. This revealed that getting to 50 per cent below 1990-levels in 2050 would cost at least 5 per cent of GDP annually by 2050. The cost would be similar to the current entire NZ expenditure on socialised education and health care.

Back home, as they say on the TV news, Labor’s pre-election 2030 plans involved some undetailed pledges to protect “emissions intensive trade-exposed industries (EITEs)” but also a ban on using Kyoto credits arising from over-achievement of previous emissions reductions. Fisher allowed for these factors plus varying use of international emissions permits. Such use of international permits would greatly lower costs of Labor’s 2030 plan, but Blind Freddy knows that such permits are rife with rorting and mere virtue-posturing. As Fisher says hopefully, the permits would have to involve best-practice “independent measurement, verification and audit.”[1]

You want costings? Here we go[2]:

# Labor’s target of a 45 per cent cut by 2030 would involve the equivalent of a carbon tax of between $67 and $405 a tonne of CO2 in 2030. Julia Gillard, eat your heart out. ABCTV News’ presenter Tamara Oudyn last night (Feb 23) quoted Albanese as saying that Labor could meet net-zero-2050 “without putting a price on carbon”.[3] Go figure.

# Fisher: Cumulative GNP losses from 2021-30 are estimated at $542 billion for a scenario in which Labor pursues its climate policy by restricting trade in international emissions permits to 25 per cent of the abatement task while protecting EITEs (emissions intensive trade-exposed industries). These losses can be more than halved, to $264 billion under a scenario in which there are no restrictions on trade in international permits, while still protecting EITEs.

To get these $264b-$542b losses in perspective, Australia’s entire annual economic output is currently about $1400 billion.

# However, the more Labor protects the emissions-exposed trade sectors, the worse cost burden falls on unprotected sectors and households (that is, on you and me).

# Fisher: Negative consequences for real wages and employment are projected under all scenarios, with a minimum 3 per cent reduction in real wages and 167,000 less jobs in 2030 compared to what otherwise would have occurred.

Sadly, the maximum would be more than 10 per cent reduction in real wages and about 320,000 jobs lost. Australia’s working class, with friends like Labor, doesn’t need enemies. Don’t forget that we’re talking here about quite a mild Labor target compared with Albanese’s net-zero-2050.

# Wholesale electricity prices as things stand are likely to rise 1.5 per cent a year this decade in real terms. “Each of the [Labor] policy scenarios considered here results in a far greater growth rate in electricity prices,” Fisher wrote. In numbers, the price rise would be from 36 per cent to 67 per cent. Suppose your household power bill these days is $2000. Labor would bring you a different bill of between $2700 and $3340. And that’s just his first installment of increases in his quest for net-zero-emissions. Albanese’s line is that renewables are cheaper. Yeah, right, Albo.

# The 45 per cent emissions-cut plan by 2030 would lower the output of the Land Transport sector by 2.1 per cent to 11.3 per cent by 2030. Other reductions would be Water and Air Transport down 1.8 – 8 per cent, Construction down 2.1 -7.2, per cent Services 2.1 – 4.9 per cent, and Iron & Steel, 2.0 –10.6 per cent, compared to no-policy-change.

When the Business Council of Australia trumpets its love for zero-by-2050 policies, members ought to ask in whose interest the BCA is speaking.