Treasury officials have rejected claims their carbon price modelling collapses if the United States does not introduce an emissions trading scheme.
Treasury macroeconomic executive director David Gruen told a parliamentary inquiry, the department had made assumptions about international climate change action based on the “best information” available now.
“The modelling is based on the US taking action but it’s not based on the US taking action specifically as an emission trading scheme,” he said.
Dr Gruen said the US could take action through regulatory measures.
Liberal senator Mathias Cormann then asked the treasury officials to clarify earlier statements that the modelling assumes comparable carbon pricing in other major economies from 2015/16.
“We have modelled abatement in the US but that abatement could take alternative ways,” Dr Gruen said.
“We are doing the best we can do based on the information we have now.
“We do not have a crystal ball that tells us actually what is going to happen.”
The Treasury official said treasury had taken into account countries pledges at the UN climate talks in Cancun last year.
“We have operationalised those in our modelling but it does require those countries to live up to those pledges,” Dr Gruen said.
Last week, opposition climate action spokesman Greg Hunt said Treasury’s updated carbon tax modelling was worthless “because it’s based on a fantasy that the Unites States would be part of a global trading scheme by 2016”.
“This is utterly out of line with anything that is realistic,” Mr Hunt said.
The federal government has introduced bills to price carbon emissions from mid-2012.
The price would begin at a fixed rate of $23 per tonne, rising for three years, before a floating market-based scheme would start in mid-2015.
The joint select committee on Labor’s so-called clean energy future legislation continues in Canberra.
