Treasury ‘left out of loop’ on net-zero plan
The Treasury secretary has revealed there was very limited involvement by his department in the analysis underpinning the government’s 2050 net-zero emissions plan.
Treasury secretary Steven Kennedy has revealed there was very limited involvement by his department in the analysis underpinning the Morrison government’s 2050 net-zero emissions plan.
The plan, released on Tuesday, relied on analysis by McKinsey and a “top-down” economic model produced by the Department of Science, Industry, Energy and Resources. However, neither analyses were made public alongside the report.
The decision to sideline Treasury from modelling the economic consequences of Scott Morrison’s 2050 net-zero target was “unprecedented” given the shift in climate change policy was “such a major issue”, former Treasury secretary Martin Parkinson has said.
The Prime Minister has used the plan to argue that Australians would be $2000 better off by 2050 versus no action; that electricity prices would not rise; that no traditional industries or jobs would be put at risk; that 62,000 new mining and heavy industry positions would be created; and that gross national income would be 1.6 per cent higher.
Dr Kennedy said his department had “not done a detailed assessment of McKinsey’s claim” in the net-zero plan that the growth in the mining and heavy industry sectors could create as many as 62,000 jobs.
“It’s Mckinsey’s best estimate of what the impact would be,” Dr Kennedy said. “We are aware of their estimate (but) we haven’t tried to recreate it or do our own modelling. We haven’t been involved in the process in that way.”
Dr Kennedy said Treasury had not conducted any climate change modelling since he became secretary in September 2019, nor in the years immediately preceding his appointment, as far as he was aware.
But Dr Parkinson, who was secretary of Australia’s inaugural Department of Climate Change from 2007 to 2011 before going on to lead Treasury and then Department of Prime Minister and Cabinet, told The Australian: “It would be unprecedented that the Treasury has not been involved in such a major issue.”
Dr Parkinson also criticised the lack of new details around how the net-zero target would be achieved.
“What we are struggling to understand is what has changed (so) that today we can meet net zero by 2050. There’s no evidence around the policies to get us there, nor do we have any indication of what will induce firms to adopt these new technologies as they are developed,” he said.
Having described only a passing involvement in the DISER modelling, Dr Kennedy would not say whether he had confidence in the economic outcomes described in the net-zero plan.
“One thing I am confident about is that a net-zero target by 2050 is readily achievable with the right policies applied over time,” he said.
Finance Minister Simon Birmingham said the net-zero plan “draws on resources across government and other knowledge and information, but the department responsible for emissions reduction is the appropriate one to lead that work”.
The comments came as the Opposition put further pressure on the government to release the modelling behind the plan – echoing similar demands from business groups and economists.
Speaking in parliament, Mr Morrison said: “The modelling will be released in the next few weeks.”
The Prime Minister also attacked Labor, arguing that they had produced no plans of their own. “They won‘t even tell us what their 2030 target is before Glasgow … I don’t know what they are waiting for,” he said.
Josh Frydenberg in question time said Treasury was in “close contact with DISER throughout that modelling process”.
The Treasurer said “the advice Treasury provided to DISER was about the risk premium of not joining the global consensus around net zero by 2050”.
“And it was also about some of those long-run assumptions like population growth that was taken into account,” he added.
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