Emissions reduction: Why your power bill could soon rise by up to $1,300 a year

Energy bills across Australia could rise by as much as $1,300 a year to cover the costs of emissions reduction, which a new study describes as a ‘carbon tax by stealth’.

State and federal energy ministers, brought together by the Albanian government, agreed last year to price the “value of emissions reduction” at $66 per tonne.

The figure is almost three times higher than the Gillard government’s carbon price of $23, which was scrapped by the Abbott government in 2014.

Australian emissions costs are expected to continue rising until they reach $420 per tonne by 2050.

Although the emission reduction value is labeled as a ‘price’, it actually works as an emissions tax.

A study released Thursday and co-authored by Aidan Morrison, director of energy policy at the Center for Independent Studies, claimed the costs of the measure will be passed on to consumers, the Daily telegram reported.

The study estimates that energy bills in Australia could rise between $855 and $1,294 per household per year.

Mr Morrison believes energy giants will pass on the high initial costs of projects to customers to save on effective tax in the future.

The Center for Independent Studies research shows that energy giants will pass on the high initial costs of low-emission projects to customers in order to save on effective taxes in the future.

“This change is likely to increase the estimated benefits of projects that claim to reduce emissions, projects that would otherwise be considered uneconomic,” his article reads.

‘There can be a legitimate argument that a carbon tax is an efficient way to reduce emissions. But the way this has been put forward by Energy Ministers avoids any discussion in Parliament on this issue, or any external consultation.

‘This is a masterclass on how to sneakily implement a carbon tax. This change will allow large transmission and distribution projects that will increase energy bills to be quickly approved by the energy regulator, using the carbon price to magnify their apparent ‘market benefits’.”

Meanwhile, Federal Resources Minister Madeleine King will release the government’s Future Gas Strategy on Thursday, which commits Australia to gas production beyond 2050 to support renewables and support manufacturers.

To offset opposition to the continued use of fossil fuels, the government will support carbon capture and storage projects to help reduce emissions from gas projects, despite questions about the effectiveness of the technology.

“The energy transformation will take time – it will require investment in renewables, new industrial processes, new technologies,” Ms King said.

“Shutting off gas overnight would cause untold damage to our economy, hamper efforts to reach net zero here and severely impact our region, which is the fastest growing in the world.

“To say otherwise is counterproductive and will not help Australia and our region reach net zero by 2050.”