Most Australians are in favour of taking steps to reduce the volume of greenhouse gas entering the atmosphere. Polling published by the Menzies and Page research centres shows that a majority of voters support reducing emissions in line with our international commitments.

The benefits of decarbonising the Australian economy are well understood within the framework of scientific assumptions about the causes of climate change. The costs of such policies however are seldom articulated.

This paper attempts to throw some light on the question of costs, by examining how government intervention to reduce carbon gas emissions will alter the retail price of electricity.

Reducing emissions is expensive, particular if the reductions occur in the generation sector. It involves substantial investment in new generators, storage and transmission. Power generation is capital intensive and an investment may take many years to recoup.

Yet these costs are often hidden from the public, despite the fact that the cost ultimately must be paid by them, either as taxpayers or consumers.

In the interests of good government, accountability and robust democracy, we firmly believe that the electorate must be informed of the costs, as well as the presumed benefits, of all public policy before they are called upon to endorse or reject it at an election.

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