Carbon tax will cost less than previously estimated

The effect of the carbon price on retail electricity will be lower than predicted and vary considerably by region, a new University of Queensland study has projected.

The study employed a supercomputer, agent-based modelling methodology that closely simulates the behaviour of traders and generators operating in the National Electricity Market, based on the legislated $23 per tonnes carbon tax in five eastern Australian states.

The study estimates that the national average of price increases will be 8.9%, lower than the Treasury’s 10% forecast. The tax will impact upon states differently: Queenslanders can expect a 10.4% increase, due to a high dependency on coal based electricity, while Tasmanians are projected to see prices increase by 3.8%.

“Whether or not these increases in prices are regarded as high or low is, of course, a matter of opinion,” said Professor John Foster, Program Leader Renewable Energy at the Global Change Institute at UQ. “However, these estimates are the most reliable currently available and should be the focus of ongoing debates and discussions about the household impact of the carbon price.”

Read more at The University of Queensland