Carbon price to cost households: report

The introduction of an emissions trading scheme (ETS) in two years could cost poor households up to $1,300 a year, mainly through higher fuel costs, a report says.

The research released Sunday by the Brotherhood of St Laurence found a price on carbon would add an average $938 a year to low-income households in Victoria, or $18 a week.

Assuming a carbon price of $35 a tonne and no government benefits or changed behaviour, poor rural residents would be hardest hit, with household costs ballooning by an annual $1,173 to $1,306.

In outer Melbourne suburbs where people are more reliant on cars for transport, expenses are forecast to rise by $1,164 to $1,220 a year.

The report found carbon use was 10 per cent below the state average closer to the centre of Melbourne, where public transport is superior.

The charity said the information suggests people on low incomes prefer public transport where it is available.

The study uses National Institute of Economic and Industry Research estimates of expenditure by household types, using data from the Australian Bureau of Statistics.

"Brotherhood research last year showed that imposing a carbon price will take a much bigger proportion of the income of poorer households than wealthy households, despite smaller 'carbon footprints'," Brotherhood executive director Tony Nicholson said.

"The latest findings show that those households in areas with little or no public transport or services will be even worse off."

He said the research was further evidence that emissions trading must be accompanied by measures to counter the impact on the poor and help them reduce emissions.

"We can no longer allow new communities to be built without ensuring public transport and other services are also in place."

Federal Energy Minister Martin Ferguson said the government was aware of the need to look after low-income earners once emissions trading began in 2010.

"In developing the ETS we've basically said that the scheme has got to be based on economically responsible principles but also equity," he told ABC TV.

"We are conscious of the need especially to protect our energy-intensive export-exposed industries but also individual households."

Asked if emissions trading would push up petrol prices, Mr Ferguson said: "Energy generally will potentially increase in price."

Fuel companies have said in submissions to the Garnaut Review that a carbon price would push up petrol prices by 10 to 17 cents a litre, based on carbon pricing of $40-50 a tonne.

Economist Ross Garnaut, who will report to the government later in the year on climate change policy, has recommended in a discussion paper that transport, including private cars, be part of emissions trading.

Consumer Affairs Minister Chris Bowen was noncommittal on whether petrol would be included or excluded from the scheme.

"We're working through all these issues ... we're putting out a white paper later in the year," Mr Bowen told Sky News.

"There's more to do and more detail to be revealed."

ninemsn 27 Apr 2008

Just another tactic by the financiers to hit the people who cannot fight back. The people are being punished for a system that does not provide adequate transport to the outer suburbs, hence people must rely on their own transport.