Inquiry Into Clean Air: How do we Compare to The Rest of The World?

This week in committee hearings for the inquiry into clean air, Abigail drew attention to Australia's position on making pollutors pay, compared to other countries...

Ms ABIGAIL BOYD: I just wanted to cover off one thing that we have not talked much about and that is to you, Mr Moylan, about the load-based licensing scheme. As a nation or as a State, is our regulation for imposing the costs of pollution on the polluters themselves also out of step with the rest of the
world? 

Mr MOYLAN (NSW Clean Air Campaigner, Healthy Futures): This was an issue that Dr Tiho Ancev, an environmental economist from the University of Sydney, looked at. He did a paper called Getting the rates right, which I can provide on notice to the Committee, where he looked at whether the load-based licensing [LBL] scheme was actually driving pollution down. He found that it was not and he did look at a comparison with other jurisdictions elsewhere. He actually held the load-based licensing scheme in New South Wales in very high regard in relation to its design, but the rates are quite low. As I mentioned, they are about 2 per cent of the damage cost of air pollution.

I think the rates are almost—they are there as a cost recovery measure, really. They are not really related to the external costs. It is rare that we would find ourselves on a unity ticket with the Australian Energy Council, but they did say that load-based fees should be set at a level that related to externalised costs. That is a much more sensible way to do that. The LBL scheme has been under review since 2015. We are very eager to see that come out. We have heard that there will be a proposal later this year or early next year, but the long delay in air pollution policy development in New South Wales is obviously a source of frustration.

Ms ABIGAIL BOYD: How much do you think that those load-based licensing fees would need to increase by in order to provide the economic incentive for these power stations to install the best available technology to filter the pollution?

Mr MOYLAN: I can take that on notice. I think the point that the Australian Energy Council was making was that the issues paper around the load-based licensing scheme talked about whether the price should be raised to the abatement cost. They said that it really should be raised to the external cost. I think they were trying to make the argument that perhaps the externalised cost was lower than the abatement cost. But the evidence from Dr Broome's study and many other studies is not surprising at all, which is that externalised cost is borne by the community at large. I do not know precisely how much higher it is than the current load-based licensing fees, but it is orders of magnitude. So, yes, they would need to change and that could be something that could ramp up over time, but it would need to ramp up quickly enough that there would be a health benefit in the short term.

Ms ABIGAIL BOYD: Or they could just install the abatement technology.

 

The full transcript can be found in Hansard, here.

 

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