Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

The Treasurer has provided the following answer to the honourable senator's question:

(1) Treasury used a broad suite of models that included the global computable general equilibrium (CGE) model GTEM, the domestic CGE model MMRF, the set of PRISMOD models for household price impacts, and detailed sector specific modelling of transport, electricity generation and land sector abatement by experts in those fields. The modelling exercise undertaken for the Australia’s Low Pollution Future (ALPF) report was predominantly focussed around providing information on the targets and trajectories for Australian emission reductions. In contrast, the modelling exercise for the Strong growth, low pollution (SGLP) report was predominantly focussed on domestic policy mechanisms. As such, more resources were devoted to the domestic implications of carbon pricing rather than the international dimension. This required a reordering of priorities given the time and budget constraints faced by the modelling exercise and resulted in the use of two sector specific electricity generation sector models rather than two international CGE models.

(2) Table 5.12 and 6.4 in the ALPF report presents a range of estimates for Gross Domestic Product in 2020 and 2050. Page 111 of the ALPF report outlines some of the reasons for the divergence of results between the G-Cubed and GTEM models.

(3) In the ALPF modelling exercise both GTEM and G-Cubed were required to meet the same environmental targets through time. It is not accurate to suggest that global emissions were significantly differently in the two models.

(4) See question 1.