Carbon Pricing

Mr Fletcher asked the Treasurer, in writing, on 16 August 2012 :

In respect of Treasury modelling of the Carbon Pollution Reduction Scheme, what (a) was Australia's Gross Domestic Product (GDP) in 2010, (b) is Treasury's base case forecast of GDP growth per annum between 2010 and 2050, and the forecast of GDP for 2050 at this growth rate, in aggregate and per capita terms, (c) is the forecast of GDP growth per annum if a carbon price is introduced, and the forecast of GDP for 2050 at this growth rate in aggregate and per capita terms, and (d) is the expected difference in GDP for 2050 and on a cumulative basis from 2010 to 2050 with and without a carbon price.

Mr Swan: The answer to the honourable member's question is as follows:

The 2008 Government report Australia's low pollution future: the economics of climate change mitigation provided details of modelling of the effect of a carbon price on the economy. One of the scenarios modelled in that report, labelled 'CPRS-5', incorporated information from the Carbon Pollution Reduction Scheme Green Paper and was calibrated to achieve a carbon mitigation target of 5 per cent below 2000 levels by 2020 and 60 per cent below 2000 levels by 2050.

In 2011, the Government report Strong growth low pollution: modelling a carbon price was released and the core policy scenario contained in that modelling report closely matched the Government's policy as outlined in the Clean Energy Future.

The responses to your questions regarding the 2011 report are:

(a) Australia's GDP in 2010 is estimated to be $1.28 trillion (2010 dollars).

(b) The forecasts of GDP and GDP per capita average growth rate per annum between 2010 and 2050 are 2.7 and 1.4 per cent respectively for the medium global action scenario. GDP in 2050 is estimated to be $3.66 trillion (2010 dollars).

(c) The forecasts of GDP and GDP per capita average growth rate per annum between 2010 and 2050 is 2.6 and 1.3 per cent respectively for the core policy scenario. GDP is estimated to be $3.56 trillion (2010 dollars) in 2050.

(d) This information is published in Chart 5.13 in the SGLP report, available on the Treasury website.