Modelling that shows Labor’s climate policy could cost billions is ridiculous

(The Guardian, 6 May 2019) We should be talking about positioning Australia for a low-carbon future, instead it’s carbon wars again.

The national debate about climate policy is off the rails again.

We should be talking about positioning Australia economically for the low-carbon future, making use of our huge opportunities to produce low-cost clean energy, and mobilising investment. We should be having a serious conversation about what are the best policies needed for that. And we should understand the implications of Australia’s climate policy for our long-term competitiveness and international standing.

Instead it’s the carbon wars once more. A confected furore over the presumed cumulative economic cost dominates the headlines, provoked by a single short report with some scary-looking numbers. The paper by Brian Fisher is a private black-box modelling exercise of no particular standing that uses outdated assumptions.

But we still have news reports citing its supposed findings that “the Labor emissions target would subtract at least $264bn from gross national product by 2030”, and numbers as high as $542bn have also been used.

There is a tendency for climate policy modelling assumptions to be highly conservative. Fisher’s modelling is an extreme example, painting the picture of an inflexible economy where clean technology is exorbitantly costly.

Just consider the carbon prices in some of the scenarios, of $300-400 per tonne of carbon dioxide. Any sensible policies to cut emissions will come at a small fraction of that. As a measure of how ridiculous such carbon prices are, consider that it would now cost less than half that amount to suck carbon dioxide straight out of the atmosphere and sequester it, using purpose built plants. That’s the highest cost option one might consider right now if the world were to go all out on climate action. In reality, carbon costs are far lower.

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The Guardian, 6 May 2019: Modelling that shows Labor’s climate policy could cost billions is ridiculous