lower bound of benefits which will actually be delivered. Similarly, it is likely that targets higher than 6.9 Mt/yr CO2-e would also deliver net benefits had these additional benefits be taken into account. Furthermore, there are several reasons to believe that the modelling approach has over-estimated the certificate price and hence the compliance costs associated with higher targets. Firstly, operation of the VEET scheme can be expected to exert downward pressure on the price of the dominant technology in the market, and hence on certificate prices over time. However this effect has not been taken into account. Secondly, if government adopts recommendations for measures (both internal and external to the scheme) to improve participation by low-income households, this should assist in lowering compliance costs for Accredited Providers associated with reaching 'hard to reach' segments of the population. It is possible that the presence of such measures could deliver additional activity sufficient to achieve a higher target at a lower certificate price. Updated marginal coefficient 3. Which greenhouse gas coefficient should be used to quantify the reduction in greenhouse gas emissions achieved by the VEET scheme? Environment Victoria supports the use of the 3a. Please outline why you believe this option is preferred, or why you selected updated greenhouse gas coefficient to reflect "No response": recent Victorian energy market changes. 4. The Department has valued Using the Climate Change Authority (CCA) carbon valuation (or price) series as a proxy greenhouse gas emissions reductions attributed to the VEET scheme by for benefits is likely to have significantly adopting a carbon valuation series that under-valued the benefits of GHG emissions was produced by the Federal Climate reductions. Any price set within a carbon Change Authority as part of its 2014 abatement market by definition represents the lower bound of the value of that abatement Targets and Progress Review.Please – outline whether you think this approach otherwise there would be no economic is appropriate for valuing greenhouse gas justification for undertaking abatement at that emissions reductions over the period price. Even using price as a proxy for value, 2016 to 2050? the 2015 prices in the CCA series are well below the most recent price set in an Australian market that established by the – first round of Emissions Reduction Fund auctions (April 2015) This established an
lower bound of benefits which will actually be delivered. Similarly, it is likely that targets higher than 6.9 Mt/yr CO2-e would also deliver net benefits had these additional benefits be taken into account. Furthermore, there are several reasons to believe that the modelling approach has over-estimated the certificate price and hence the compliance costs associated with higher targets. Firstly, operation of the VEET scheme can be expected to exert downward pressure on the price of the dominant technology in the market, and hence on certificate prices over time. However this effect has not been taken into account. Secondly, if government adopts recommendations for measures (both internal and external to the scheme) to improve participation by low-income households, this should assist in lowering compliance costs for Accredited Providers associated with reaching 'hard to reach' segments of the population. It is possible that the presence of such measures could deliver additional activity sufficient to achieve a higher target at a lower certificate price. 3. Which greenhouse gas coefficient should be used to quantify the reduction in greenhouse gas emissions achieved by the VEET scheme? Updated marginal coefficient 3a. Please outline why you believe this option is preferred, or why you selected "No response": Environment Victoria supports the use of the updated greenhouse gas coefficient to reflect recent Victorian energy market changes. 4. The Department has valued greenhouse gas emissions reductions attributed to the VEET scheme by adopting a carbon valuation series that was produced by the Federal Climate Change Authority as part of its 2014 Targets and Progress Review.Please outline whether you think this approach is appropriate for valuing greenhouse gas emissions reductions over the period 2016 to 2050? Using the Climate Change Authority (CCA) carbon valuation (or price) series as a proxy for benefits is likely to have significantly under-valued the benefits of GHG emissions reductions. Any price set within a carbon abatement market by definition represents the lower bound of the value of that abatement – otherwise there would be no economic justification for undertaking abatement at that price. Even using price as a proxy for value, the 2015 prices in the CCA series are well below the most recent price set in an Australian market – that established by the first round of Emissions Reduction Fund auctions (April 2015) This established an
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