Power bill rises not so harsh, says survey

PREDICTIONS that the Australian carbon price will rise once emissions trading starts in 2015 have been challenged by an analysis that found the price would slump dramatically because of an influx of cheap international permits.
Research by analysts at Bloomberg New Energy Finance found the carbon price would fall from a fixed $25 in 2014-15 to $16 when emissions trading began in 2015-16. Government modelling released last month suggested the price would rise to $29 in 2015 and to $38 by 2020.
A carbon price of $16 would mean a much more modest increase in power bills, and much less government revenue from the sale of carbon permits.

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It would drain the pool of money available to compensate heavy-polluting industries, and to invest in renewable energy.
The analysis suggested emissions trading would add less to consumer prices than the 0.7 per cent of gross domestic product forecast by Treasury.
It found the price under emissions trading would stay at the minimum level allowed under the proposed carbon legislation - known as the floor price - reaching only $17.50 by the end of the decade.
The group's carbon research manager, Seb Henbest, said the design of the legislation meant the price was likely to be driven by the international market...

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