Families face small price rises despite scare campaign

26 Mar 2008Archived News Energetics in the News

Published: The Sydney Morning Herald - by Ben Cubby - Cheryl Bowler,Principal Consultant; Carbon Markets, Energetics Pty Ltd gives advice on the rise in gas bills.

 

Michael Ward and his children, like most Sydney households, are well placed to survive the introduction of the carbon emissions trading scheme outlined by Professor Ross Garnaut yesterday.
Mr Ward, a single parent who lives in Balmain with his daughter, Irena, 11 and son, Max, 10, will see his expenses creep up by a few dollars a wrrk as carbon use becomes more costly.

But the gloomy scenario of soaring power bills coupled with rising retail costs, predicted by some industry groups, may not take place.

Calculations prepared for the Herald by two independent environmental consultancies show that most people will pay more for some products, but that those costs could be offset by energy savings, without changing their lifestyles.

“From what I’ve seen, the main thing it does is provide an incentive to manage our energy use a bit better,” Mr Ward said. “I think the real impact will be on the really big energy users, less so on us.”

Mr Ward and his family heat their home with gas, and paid $339 to use 13,841 megajoules in the past six months.

The environmental consultancy Energetics said if the carbon price per tonne ended up at around $30 per tonne, Mr Ward’s gas bill would rise about 8 per cent under a carbon trading scheme, leading to an annual price increase of $55.

Gavin Gilchrist, the managing director of environmental consultancy Big Switch Projects, used slightly different calculations to predict that Mr Ward’s gas bill would rise by $2.40 a week. Mr Ward’s household generates about 1.8 tonnes of greenhouse gas per year by heating the home with gas.

The Ward family used 6706 kilowatt hours of electricity in the last 12 months, the equivalent of releasing about six tones of greenhouse gas.

Under a deal with Mr Ward’s supplier, Origin Energy, 20 per cent of the power he uses comes from renewable sources. His total electricity bill in the last 12 months came to $1026, and he will face an annual rise of about $171, said Cheryl Bowler, an Energetics consultant.

Without his 20 per cent green power, Mr Ward would face rises of $213 per year, because renewable energy will not be subject to a set carbon price.

The rise of about three dollars a week on electricity bills would not be felt because most people and most businesses would understand the need to make small adjustments to their behaviour, Ms Bowler said.

“People need to be more aware of their energy wastage, but I think it will be at the point where the difference (under an emissions trading scheme) will be so small that most families don’t even notice it,” Ms Bowler said.

Mr Ward spends about $50 each week on petrol, and that is likely to go up about $3 a week Mr Gilchrist said, while Energetics put the rise at about $5 a week, or $139 a year. Both rises under a carbon trading scheme are much less than petrol price increases seen in the past 18 months as world oil prices went up.

A trading scheme that set a carbon price of $30 a tonne would result in Mr Ward’s weekly grocery bill of about $200 going up by about $5 a week.

“In reality, the price rises are really very small, thought there is a scare campaign to the contrary,” Mr Gilchrist said. “And of course all this assumes that Mr Ward and his family do not change their behaviour at all, that businesses supplying his family don’t change their ways at all, and … it assumes that the Government doesn’t spend some of the $7 billion it raises through the scheme helping households shift to lower carbon use.”

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