01.The carbon pollution reduction scheme implications for households
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“Carbon costs will … ultimately be borne by consumers.”
Australian Government White Paper December 2008
The Government’s Carbon Pollution Reduction Scheme is an important first step in making polluters pay for their pollution. But we’re concerned that the current design of the Scheme is going to result in consumers paying now, pay later, and still copping the effects of climate change
Ten quick facts about the Carbon Pollution Reduction
- Australia has proposed 3 possible targets to reduce its carbon emissions to be set in 2010:
5% by 2020 (based on 2000 levels),
15% by 2020 if an international agreement is set into place;
25% by 2020 if an international agreement is set into place with strict conditions upon the agreement
Only the final target (25%) will result in a reduction of emissions sufficient to stop the destruction of many Australian icons, including the Great Barrier Reef.
- The CPRS will commence in 2011. Around 1000 companies will participate in the Scheme. These companies are responsible for around 75% of Australia's total emissions. All other companies and all households will not participate in the scheme.
- The establishment of the CPRS will raise an estimated $11-$12 billion* per annum for the Australian government – 100% of this money will be used to support business and households in the changes.
- The CPRS will increase business costs (in a similar way to the GST) and these costs will be passed onto consumers. In the first year (2011), permits will be $10 flat cost, before moving to full auctioning and trading of permits from 2012.
- Under the CPRS the cost of living for Australian households will increase by 1.1%*. The government will support low and middle income households with an assistance package worth $6 billion* which will be rolled out 2011-2012.
- The biggest increase in expenses for Australian households will experience be in electricity and gas – estimated at $4 and $2 per week* respectively. This will be on top of other anticipated increases in electricity.
- Around 89 per cent of low-income households will receive assistance equal to 120% of the cost of living increase. Around 97% of middle-income households will receive some direct cash assistance. Around 60% of middle-income households will receive sufficient assistance to meet their cost of living increase. These will be rolled out as part of normal assistance payments and tax relief.
- The government has not yet outlined a comprehensive package to assist households in their energy efficiency, nor has it yet dedicated sufficient funds to effectively address this issue. The various rebates and incentives (solar, insulation, hot water etc) available across Australia can be viewed here.
- Households are not required to participate in the CPRS. There are only two ways households can effectively reduce emissions:
By 'retiring' or 'ripping up' permits they have purchased, or
Taking up of GreenPower from 2010 - for which only new sales will be counted. Existing GreenPower sales will not be counted (find out more here).
- Emissions Intensive Trade Exposed Industries (i.e. those companies that are will be no longer competitive internationally due to the increased costs of the CPRS) will be given 70-90% of their permits free, valued at over $9 billion* out to 2012. In addition, coal-fired electricity generators will be given a ‘once-and-for-all’ allocation of $3.9 billion* out to 2015.
*Amendments made by the government to the CPRS on 4th May 2009 require amendments to the government budgets. These are yet to be released.
What we're doing
CHOICE is campaigning to bring the CPRS up to scratch, to ensure individual consumer action is valued and to help Australians get a better deal for themselves and their environment.
- We provide consumers with information to confidently take action to reduce their personal carbon emissions.
- We provide consumers with an opportunity to make sure their voices are heard.
- We represent consumers by talking to the government and industry to improve CPRS.
- We represent consumers on government consultations on voluntary action and energy efficiency.
What you can do
Tell Minister Wong you want your actions to count through GreenPower: Keep it real