A carbon price may have to increase steadily from a starting price of about $25 a tonne to about $60 to turn around Australia’s rising emissions, according to an analysis by the director of ANU’s Centre for Climate Economics and Policy.
”A relatively low starting price gives confidence and will show that no economic catastrophe happens,” Dr Frank Jotzo said. ”Then it can ramp up.”
He said consumers should be compensated for rising living costs through income tax cuts, but industry compensation was less justified than two years ago.
Meanwhile, Opposition Leader Tony Abbott retreated from his sceptical rhetoric on Monday, when he said climate science was not settled, and carbon dioxide was not necessarily a ”villain”.
Mr Abbott said yesterday: ”Climate change is real; humanity is making a contribution.”
