Senate Economics Legislation Committee [Part 2], , 2:55:25 to 3:01:41
Senators question the differences between DISR's market-based export forecasts and Treasury's policy-driven net zero modeling regarding the future of fossil fuel exports.
Topics: Fossil fuels, Exports, Climate change
Speakers: Senator Susan McDonald, Dom English
stronger than treasuries?
Senator without having the that particular uh chart in front of me uh the the main difference that will emerge is that uh uh there's I think in the treasury work it's a policy scenario analysis uh to consider the um the path to net zero outcomes uh whereas what we are doing is um uh in in the moment in effect looking at what demand and supply conditions on on the of the day indicate for our uh export outlook.
Okay. So, so Treasury's forecast and modeling were for a different purpose. They were modeling the government's policy on a net zero emissions reduction pathway. and your data is reflecting production or uh international demand and prices. >> So that that would be the difference between the two.
>> I mean at at the very highest level obviously um uh there are differences that emerge over time in technologies in strategies to uh deal with uh the transition process. the way that uh industry is investing to uh respond to the challenge of net zero. So um to say that uh you know the only difference is is uh you know sort of looking forward or back or or forcing a result or not would would I think understate the degree of uh complexity of the challenge to try and understand what it might take to happen at a particular point in time uh to see the net zero results achieved over time versus say the things that inevitably change uh that make forecasting A very hard activity for
Yesterday this committee was told by Treasury that the net zero work which was subsequently used unchanged in this year's IGR the intergenerational report used the then available DISA forecasts for its own fossil fuel forecasts. So, I checked the DASA forecasts to which Treasury are referring the five-year forecasts in the March 2025 resources and energy quarterly and they seem to contradict Treasury's claim from yesterday. So, I would just like to clarify and seek your help in understanding what's going on. Da's five-year forecast on table 1.2 2 on page 14 of last of that report, the 2025 report shows fossil fuel forecast to remain strong. Relatively modest changes in export volumes. For example, metal exports rise from 156 megat tons megat tons to 169 megat tons in the 5 years to 202930. It's an 8% rise. Thermal coal exports fell slightly from 213 megat tons to 199 megat tons. It's a 7% fall. And LG exports fall slightly from 80 to 78 megat tons. That's a 2.5% fall. But by contrast, the Treasury net zero forecasts shows Australian fossil fuel export values almost having between 2025 and 2030. But yesterday, Treasury said it used the DIYer forecasts for those net zero for forecasts. Can you see any way in which the figures that I've just quoted from the published REQ forecast from 2025 are consistent with the Treasury claim yesterday that it used daer forecasts Treasury's net zero forecasts a huge fall in fossil fuel exports between 25
It is conceivable for example that uh they have a similar view to us on uh prices but then different views on volumes and similar views on or similar views on volumes and different views on prices and they would still say they have used and referred to our material to help them prepare their analysis. Uh so I would need not having been a part of that process that predates my time in this role. I would need to interrogate the particular process they did to uh give you a more satisfactory answer. Um the the other methodological differences that will emerge between the sort of work we do and the sort of work that the Treasury is trying to to uh do uh in a very different task is uh we do not anticipate policy change or implementation and we do not anticipate decisions that haven't made by the market around other projects or locations. So um so again they could start with our baseline information that we use to construct our estimates and then apply their own judgment to how that will evolve over time.
>> Well I think that is a very generous characterization Mr. English and I think that that is that is lovely and you are a team player and I think that Treasury would do well to read your forecasts more closely. May I turn uh to a different topic now? So, thank you for your input onto the REQ. I want to turn to the gas reservation policy. I feel like we spend a lot of time