But the opposition is demanding the modelling reflects that it is a “fantasy” that a US cap-and-trade emissions trading scheme will be up and running by 2016.
Labor’s carbon pricing scheme relies substantially on the purchase of overseas carbon credits to achieve pollution reduction targets by 2020.
The coalition says the government is not being honest by claiming its carbon tax will reduce Australia’s emissions.
It has written to Prime Minister Julia Gillard demanding the government abandon a $25 million advertising campaign promoting the carbon tax because it doesn’t tell Australians about the need to purchase overseas credits.
“They want to send money overseas,” opposition climate action spokesman Greg Hunt said, warning the overseas carbon credit market largely was “extremely undeveloped” and susceptible to fraud.
“Many of them are likely to be of dubious providence,” Hunt said.
Climate Change Minister Greg Combet dismissed any suggestion there was uncertainty about the future of the global carbon market.
“There will be carbon markets that we can link up with but there is some detailed work to be done,” Combet said, adding that schemes were earmarked for China and California during the next few years.
Hunt said the government’s most recent modelling assumed the US would have a “fully integrated and effective” cap-and-trade emissions trading system in place by 2016.
That was a fantasy, he said.
The government on Sunday released updated information showing the impact its carbon tax would have on household budgets.
Treasurer Wayne Swan insists the figures show that many prices, especially food, will be little affected by the tax when it comes into operation from July 1 next year.
But annual electricity and gas charges are estimated to increase by about $240 on average.
Overall, households will pay about $510 extra for a range of goods and services.
The impact on some low-income households and pensioners would be more than offset by government compensation, Swan said.
Households that improved their energy efficiency could end up coming out in front, he said.
The treasurer this week is planning to release updated modelling on the tax’s impact on the whole economy.
Initial modelling showed the economy would continue to grow strongly under a carbon price at the same time as carbon pollution was reduced.
The updated modelling, prepared by the Treasury in consultation with other departments, was expected to very closely match initial results, Swan said.
The government has been forced to counter criticism that its initial modelling was based on a $20-a-tonne price on carbon, against the actual starting price of $23 a tonne.
Source: AAP NewsWire