THE Rudd Government's emissions trading scheme could trigger an investment surge worth more than $6 billion a year, according to secret economic modelling revealed as Parliament gears up to determine the fate of controversial climate change laws.
An internal report by the National Australia Bank obtained by The Sunday Age suggests the emissions trading debate has focused on short-term costs and ignored new investment opportunities.
"The average year-on-year investment created by the (Carbon Pollution Reduction Scheme) could be up to 60 per cent greater than that committed for infrastructure in this year's budget," the report says.
It says there has been "little consideration of the investment stimulus" that would be created as the economy becomes less greenhouse intensive.
The report comes as a national poll conducted on behalf of the Climate Institute has found more than three out of four Australians believe the Liberal Party should support the Government's emissions trading scheme legislation.
The sharply divided Coalition will go the party room within the next week to consider the legislation before the House of Representatives debates it next week. The legislation will go to the Senate next month.
The Coalition, which is considering a bipartisan position on targets for the world climate conference in Copenhagen in December, wants the legislation delayed until after that conference.
But an Auspoll survey of 1120 people has found 77 per cent believe the Liberals should back the legislation now. Only 23 per cent think they should oppose it.
The online poll taken from May 15 to 19 found women were more likely than men to say the Liberals should support it (83-71 per cent), and younger people more likely than those older (82 per cent of 18-29 year olds compared with 71 per cent of those 50 and over).
Greens sources said yesterday that while they were opposed to the legislation they were "not inclined" to vote for delay. So the Opposition would probably need the votes of Family First senator Steve Fielding and independent Nick Xenophon if it wanted to defer the legislation until after the December conference.
But Senator Xenophon told The Sunday Age yesterday: "My strong inclination is that we need to deal with this legislation, in terms of the architecture and design of the scheme, before Copenhagen."
Certainly the NAB report will give the Government added traction to argue for the legislation to be passed. The modelling work traces the impact of the three possible emissions reduction targets announced by Government. It assumes that the price of emissions will rise from $20 a tonne of carbon dioxide to $100 a tonne as the Government cuts the number of permits. It also assumes that 30 per cent of Australia's investment efforts to cut emissions will leak to foreign countries.
Under the least onerous scenario — a cut of 5 per cent below 2000 levels by 2020 — investment would soar by $5.8 billion a year by 2020 and by $10.8 billion by 2050, or an average of $6.2 billion a year.
A 25 per cent cut will become Government policy if there is a strong agreement at Copenhagen.