1 October 2021

Putting a dollar figure on the impact of climate change

| Shane Rattenbury MLA
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Shane Rattenbury MLA

Shane Rattenbury MLA says the ACT Government is striving towards its goal of being a net-zero jurisdiction by 2045. Photo: Michelle Kroll.

For years, the ACT Government has led the nation in taking action on climate change because this community has made it loud and clear about wanting a healthy planet where all species, including the people we love, can thrive.

Most people want a healthy planet because even if pollution didn’t come with an existential threat, why wouldn’t you want the best for the planet on which you live?

However, there are people who are still deterred by the perceived cost of shifting to a sustainable economy and way of life.

For these people, we need to put in dollar terms the cost of inaction on climate change, and the ACT Government is about to become the first Australian jurisdiction to do so.

Economists call it ‘the social cost of carbon’, a comprehensive estimate of climate change damages resulting from the release of one tonne of greenhouse gas emissions into the atmosphere. Damages include things such as future healthcare costs, property damage from extreme weather, and lost productivity.

By understanding the financial impact of carbon pollution on our community, we are incentivised to choose the least emitting options and we become fully alert to the impact each investment will have on the wellbeing of our community.

We need a social cost of carbon in place to meet our emissions reduction targets. While people around Australia are crying out for the Federal Government to commit to responsible targets, the ACT has already legislated them.

To protect our community, we will be a net-zero jurisdiction by 2045, and to get there we already cut emissions by more than 40 per cent by 2020, with our next checkpoint being 50-60 per cent by 2025.

Our targets require significant investment by the ACT Government in emissions reduction programs and policies. We’re already powering the ACT with 100 per cent renewable electricity, and cutting transport emissions by shifting both our fleet of government vehicles and our public transport buses to electric.

Knowing the social cost of carbon in the ACT will help us take the next steps.

There are various benefits to knowing what the social cost of carbon is. It is a powerful tool that can be used to support more informed decision making and public investment to help governments steer away from being drivers of climate change.

If we know how much damage in dollar terms each tonne of greenhouse gas emissions will create, we can start to consider alternative investment and policy options to reduce emissions and avoid causing costly climate change harms.

Drawing on international and domestic peer-reviewed literature to understand the key theory and practice behind the social cost of carbon, we will be able to adopt an appropriate social cost of carbon for the ACT and understand when and how adjustments will be needed in the future.

How will this apply in practice?

Essentially, the ACT Government will measure the amount of greenhouse gases for which it is responsible and ‘bill’ itself for the cost of these emissions. The equivalent money will be invested in activities to reduce the emissions, preventing the recurrence of these costs in the future.

In the upcoming ACT Budget, we’ve set down a starting price of $20 per tonne. Based on the emissions of current government operations, this will see millions of dollars invested in initiatives to cut those emissions, including school heating systems that don’t create any emissions, and moving to zero-emission vehicles.

The earlier we make these investments the better because the decisions we make today will impact our ability to reach net zero by 2045.

We expect the ACT’s price will increase over time as the government fully implements the concept of the social cost of carbon, and as the costs of causing climate change increase.

Even small steps, such as putting in place an interim social cost of carbon, will help our government make better decisions for the wellbeing of this community.

Shane Rattenbury MLA is the member for Kurrajong; leader of the ACT Greens; ACT Attorney General; ACT Minister for Water, Energy and Emissions Reduction.

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Get rid of half of the jetsetting politicians. That will save thousands of tons of CO2 emitted from overseas junkets

Leon Arundell11:43 am 03 Oct 21

The ACT Greenhouse Gas Inventory shows that from 1989 to 2019 Canberrans caused net local emissions of 48 million tonnes carbon dioxide equivalent, plus 70 million tonnes of interstate emissions from electricity generation. If we meet the targets in the ACT Climate Change Strategy, by 2045 our net local plus electricity emissions will reach 140 million tonnes CO2-e. That is what Shane means by, “we will be a net-zero jurisdiction by 2045.”

Do the quoted figures include land use across the entire Territory, specifically the emissions from the 2003 and 2020 bushfires and the proceeding regrowth, or do they just include electricity, gas and diesel/petrol use in Canberra?

Leon Arundell7:21 pm 03 Oct 21

The quoted figures include emissions and sinks from land use, land use change and forestry. They include sinks from regrowth after the 2001 and 2003 bushfires. They probably don’t include emissions from the 2001 and 2003 bushfires, because those fires were started by natural causes. They do not yet include a million tonnes or so of emissions from the 2020 Namadgi bushfire, which was started by a helicopter. More information at https://www.environment.act.gov.au/cc/measuring-act-emissions

Interesting, I didn’t know the comparison of the 2020 bushfire emissions to the annual emissions of the city.

Capital Retro8:47 am 03 Oct 21

I’m surprised that the Minister didn’t also announce the biggest virtue signaling venture so far that being a $1 million electric (hybrid actually) fire engine: https://www.esa.act.gov.au/electric-fire-truck-signed-and-sealed-be-delivered-2022.

That’s really putting a dollar figure on virtue signaling.

It would be ironic that its first job could be attending a fire in another EV or at a big battery site.

It is an excellent idea, and we should congratulate the government.
Two improvements are:
Change from being a cost to being an investment. Instead of the government saying it will bill itself a certain amount, the government could say it will invest the same amount in countering the effect of climate change.
Extend it to all Canberrans and estimate the investment we each need to make. The funds for investment could come from extending the Sustainable Household System interest-free loans. Each of us could take out interest-free loans and invest the money on mitigation infrastructure that saves us money. For example, we know we are going to have to invest to further droughtproof Canberra. Icon water could offer investment packages to take our interest-free loans, invest the money and give us lower-priced water instead of a monetary return on investment. The savings would need to be greater than the cost of the loans. We repay the loans over the life of the infrastructure (e.g. dams last 100+ years). The funds can come from the Reserve Bank that could issue the ACT government interest-free loans. They do it for the banks – why not the citizens? The approach does not increase inflation, it does not increase the government’s debt, but rather it increases economic productivity and increases the wealth of the whole community. Notably, the system has is designed so that every Canberran can participate and grow their wealth with money-saving investments.

This sounds like the innovative accounting they used at the US energy company Enron.

An excellent article. It would be great if people actually READ the article, and actually COMMENTED on it, rather than pushing their personal wheelbarrows. Masks left in public parks? Riots in the streets? Give me a break. Give me some sensible discussion of issues raised, and solutions explored. Please.

Will we ban volcano’s will be ban the sun for its burping solar flares?

No we won’t, instead you willing choose to cripple economies.

Black world technology already exists to combat so called climate change, the reason why it’s not being used is because they fear the riots in the street when society finds out how much technology they have held back from us over the decades.

Stephen Winter9:48 pm 01 Oct 21

ACT is not 100% renewable electricity and never will be.
They are building a new 330Kv substation because of electricity demand.
This is being supplied by NSW coal powered generators

What is the actual “social cost” of greenhouse gas emissions in dollars, and how was this initial cost of $20 per ton determined? How much of the “social cost” on the people of the ACT is caused by the emissions from the ACT Government, and how much is caused by emissions from other jurisdictions? What is the actual cost of inaction in dollars, compared to the extra taxes on the ACT people?

Capital Retro10:04 pm 01 Oct 21

The social costs for the ACT government’s emissions will be collected by levy on our car registration along with all the other “good cause” levies already there.

Of course, the levy will be exempt if you have an EV.

Minister, I have a question:
I have a gum tree that is blocking the winter sun from warming my house.
Can I cut that tree down or is it better that I pay to burn fossil fuels to heat my home?

Well I guess with their ” Putting a dollar figure on the impact ”,
they could start with the dollar figure on ”including school heating systems””.

Just a round figure would so, something I can budget for.

Capital Retro3:07 pm 01 Oct 21

Not content with growing money on trees, this government is now to create a tax on thin air.

File under “Fairy tales and other fantasies”.

I wonder what the dollar value is on all the disposable masks now polluting the nature parks around Canberra?

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