Carbon price: households shouldn't carry the cost for industry

The federal government has announced a plan to implement a carbon price in Australia from 1 July 2012. This is a welcome step because a carbon price is the least-costly way of tackling climate change, and studies show the sooner we act, the lower the cost, so this is potentially good for consumers in the long term.

The carbon price will also create more certainty about the future of the energy sector, which will hopefully lead to more efficient investments. This is really important for consumers because the main factor pushing up electricity bills is the massive cost of upgrading our electricity networks, estimated at around $51 billion over the next five years alone. The more uncertainty there is about future investments, the more we are all likely to end up paying in bills, and we are already seeing that.

But for consumers, the devil will be in the detail.

What sort of compensation are we going to see for households and industry?

It's promising that the government says all revenue from the scheme will go back into compensation and climate change programs, but what's important is the final mix; the more you compensate the polluters, the greater the burden you put on households. So we really need to see those details and make sure households don't carry the costs for industry.

What sort of measures are we going to see to help households invest in energy efficiency and learn about simple steps to reduce their bills?

This is a crucial area where the government has a chance to get this right, but it's got to be done well, including steps for low-income households.

The government received a report from the Prime Minister's Task Group on energy efficiency which recommends a range of really significant energy efficiency measures. For example, the introduction of a national energy savings initiative that could save households up to $180 a year on bills, with potential savings increasing to almost $300 a year for households who implemented energy savings technologies under the scheme. These measures should be implemented as part of any carbon price.

Do you agree with the government’s decision to put a price on carbon? Do you think it will encourage industry and/or consumers to become more energy efficient?