The modelling has likely underestimated the benefits of 4. The Department has valued greenhouse gas reducing greenhouse gas emissions to Victoria, by using a emissions reductions of abatement’ value (what it costs to reduce one tonne ‘cost attributed to the VEET of greenhouse gas emissions) instead of a cost of ‘social scheme by adopting a carbon carbon’ value in the calculations. The social cost of carbon is defined as the costs imposed on the wider economy by valuation series that was produced by the Federal greenhouse gas emissions (most commonly carbon Climate Change Authority as dioxide). These economic damages can take various forms part of its 2014 Targets and including decreased agricultural yields, harm to human Progress Review.Please health, property damages from increased flood risk and outline whether you think lower worker productivity. The United States uses a value this approach is appropriate of $37 per ton of greenhouse gas abatement to guide for valuing greenhouse gas energy policy decision‐making. This is significantly higher emissions reductions over the than the 2015 values for carbon abatement which have period 2016 to 2050? been used in the VEET modelling (starting at AU$5.49 per tCO2‐e for 2015). Because the likely benefits of greenhouse gas emission reductions have been underestimated, we can be very confident that the 6.9 Mt/yr CO2‐e target will deliver at least the predicted benefits, and that higher targets could also deliver positive benefits if a more realistic value is used. 5. Is there a case to exclude No any business sector(s) from participation in the VEET scheme? 5a. Please outline why this is your preferred option, and comment on how this should be implemented: 5b. Please outline why this is There is ample evidence that significant opportunities exist your preferred option: for business and industry to improve energy efficiency at low or negative cost, and that such efficiency and productivity improvements would deliver benefits to individual businesses and to the wider Victorian economy. I support the inclusion of large energy users (industry, hospitals, universities etc.) in the VEET scheme. However, I do not support these businesses receiving benefits under the scheme for retrospective investment decisions. Investments in energy efficiency made prior to inclusion in the scheme were presumably based on sound economic and business rationales, and hence meet the definition of as usual’ activities which are excluded under ‘business VEET. 6. Should the VEET scheme Yes be amended to better ensure
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? The modelling has likely underestimated the benefits of reducing greenhouse gas emissions to Victoria, by using a ‘cost of abatement’ value (what it costs to reduce one tonne of greenhouse gas emissions) instead of a ‘social cost of carbon’ value in the calculations. The social cost of carbon is defined as the costs imposed on the wider economy by greenhouse gas emissions (most commonly carbon dioxide). These economic damages can take various forms including decreased agricultural yields, harm to human health, property damages from increased flood risk and lower worker productivity. The United States uses a value of $37 per ton of greenhouse gas abatement to guide energy policy decision‐making. This is significantly higher than the 2015 values for carbon abatement which have been used in the VEET modelling (starting at AU$5.49 per tCO2‐e for 2015). Because the likely benefits of greenhouse gas emission reductions have been underestimated, we can be very confident that the 6.9 Mt/yr CO2‐e target will deliver at least the predicted benefits, and that higher targets could also deliver positive benefits if a more realistic value is used. 5. Is there a case to exclude any business sector(s) from participation in the VEET scheme? No 5a. Please outline why this is your preferred option, and comment on how this should be implemented: 5b. Please outline why this is your preferred option: There is ample evidence that significant opportunities exist for business and industry to improve energy efficiency at low or negative cost, and that such efficiency and productivity improvements would deliver benefits to individual businesses and to the wider Victorian economy. I support the inclusion of large energy users (industry, hospitals, universities etc.) in the VEET scheme. However, I do not support these businesses receiving benefits under the scheme for retrospective investment decisions. Investments in energy efficiency made prior to inclusion in the scheme were presumably based on sound economic and business rationales, and hence meet the definition of ‘business as usual’ activities which are excluded under VEET. 6. Should the VEET scheme be amended to better ensure Yes
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