Federal Election 2019: The cost of Labor’s climate policy revealed

Bill Shorten has failed to explain the costings of his climate change plan, but the author of the report Labor used to draft its policy hasn’t held back.

Exclusive: Bill Shorten’s climate change policy will cost the Australian economy at least $60bn more than the Coalition’s targets by 2030, according to the author of the report Labor used to draft its policy.

Economist Warwick McKibbin told News Corp Australia he prepared his report — the centrepiece of the Labor Party policy — in 2015 under the Abbott Government.

And Dr McKibbin warned Shorten would not be able to meet his financial promises without buying controversial carbon offsets from overseas, if they proved economically viable or were even available to purchase.

For seven days running, Shorten has failed to explain the costings of his climate change plan.

When News Corp Australia contacted Shorten’s office on Wednesday with a series of questions on costings, a spokesman quoted sections of Dr McKibbin’s report and attached graphics from it.

The McKibbin report was the only source cited by Shorten’s camp as its source of modelling for costings on its carbon emission targets.

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Dr Warwick McKibbin has warned Bill Shorten would not be able to meet his financial promises without buying carbon offsets from overseas. Picture: News Corp Australia

The Shorten camp also dismissed one News Corp Australia question as “beneath you” and said they wouldn’t “justify” another “with a response”.

The same questions were put to Labor yesterday, and they again refused to answer them.

When asked to respond to the new claims by Dr McKibbin, Labor refused to comment.

The $60bn policy price difference emerged as Labor and Liberal leaders rubbished each other’s climate policies.

Mr Shorten called Prime Minister Scott Morrison a “climate-denying cave dweller” and Mr Morrison claimed Labor’s policy would see companies forced to pay out up to $35bn to meet its targets.

But Dr McKibbin said economic modelling showed Labor’s higher target of reducing Australian carbon emissions by 45 per cent would cost billions of dollars more than the Coalition’s lower goal of 26 to 28 per cent.

“By the time you get out to 2030, the difference between where (gross domestic product) is under the two scenarios is probably close to $60bn or more. That’s the difference between those two scenarios in that year,” he said.

“You can argue is $60bn a big number or a small number? Compared to a two trillion dollar economy, it’s a pretty small number, but it’s still $60bn.”

The McKibbin report was the only source cited by Bill Shorten’s camp as its source of modelling for costings on its carbon emission targets. Picture: AFP

In response to News Corp Australia questions about the cost of Labor’s climate policy, a spokesman quoted Dr McKibbin’s report to indicate its targets would have the “same impact” as the Coalition’s policy.

But Dr McKibbin said the research showed that could only be the case if Labor purchased carbon credits from foreign countries, and that assumed they would be available in future and that they would be cheaper than reducing emissions in Australia, which had yet to be established.

“The critical question is what will the price of offsets be in 2030? We don’t know that. There are a lot of ifs and buts here,” he said.

“If you double the target reduction you’re going to more than double the cost of getting there under the same set of policies.”

Labor may also face a hurdle in accessing offshore carbon credits, as Australian Greens climate change spokesman Adam Bandt said the party planned to block their use.

WHY CARBON OFFSETS WON’T HELP AUSTRALIA

They’ve been likened to “paying someone else to go on a diet for you while you stay at home eating burgers and pizzas,” but buying carbon credits could be a key piece of Australia’s future climate policy.

It emerged this week that Labor would have to purchase foreign carbon offsets to limit the cost of meeting its climate policy targets and to match the price of the Coalition’s policy.

Labor has committed to reducing Australia’s carbon emissions by 45 per cent by 2030, while the Coalition has promised a reduction of 26 to 28 per cent.

But carbon credits are controversial, with Australian Greens spokesman Adam Bandt revealing plans to block their use, and likening them to a diet undertaken by someone else.

The Nature Conservancy climate strategy director Will McGoldrick said there were a number of potential problems to using carbon credits, and they should not be a central plank of any climate policy.

“We don’t want offsets to become an avoidance strategy,” he said.

“They need to be a complementary part of your approach to reducing emissions.”

Mr McGoldrick said carbon credits could be useful for companies and countries who wanted to take stronger action on climate change quickly or “go even harder” on carbon reductions, but would not deliver lasting change in Australia.

“A robust set of rules” was also needed, he said, to make sure any overseas carbon reduction policies were permanent and genuine.

Starling Energy Group managing director Brian Innes said the strategy was a purely economic approach to reducing climate harm, though it was one that had been used successfully by some Australian businesses, including Qantas.

“The concept is one of cost abatement,” he said.

“It doesn’t impact or own omissions and we need other instruments to achieve those goals.”

Originally published as Federal Election 2019: The cost of Labor’s climate policy revealed