Delay on ETS will be costly – report

Updated: 12:37, Monday July 12, 2010

Delaying an emissions trading scheme could cost households an extra $60 a year in energy costs, a new report suggests.

Federal cabinet meets on Tuesday to nut out the government’s latest approach to climate change, likely to be a key election issue.

Prime Minister Julia Gillard will consider putting a price on carbon, but has ruled out introducing emissions trading before 2013.

A study by some of the nation’s leading energy providers, produced for the Climate Institute, shows uncertainty or inaction will cost the economy an estimated $2 billion a year by 2020.

That would add $60 a year to average household power bills.

‘A decision to delay doesn’t avoid the cost impacts on electricity prices,’ institute CEO John Connor told ABC Radio on Monday.

The government must set ‘clear signals’ to the community on its plan to cut carbon emissions.

‘We need a system that puts a limit and a price tag on pollution so investors can know certainty.’

An immediate introduction of emissions trading was the ‘ideal’ scenario, Mr Connor said, but the carbon reduction target needed to be set higher than the government’s dumped scheme.

The release of the study also coincides with a new poll, commissioned by the Australian Conservation Foundation, that shows 45 per cent of voters want climate change action.

Those voters would be more likely to vote Labor if it promised to deliver emissions trading in the next year.