Commenting on a story in today’s Sydney Morning Herald (“$19 a tonne: the price to pollute”), Dr Kaye said: “Citibank’s forecast means that purchasers of the state’s power stations would be facing a massive $2.9 billion a year emissions price tag by 2020.

“Even at the modest $19 a tonne forecast for the start up of the carbon market, the annual cost to emit 57.8 million tonnes of CO2 would be $1.1 billion.

“Unless Treasurer Michael Costa is able to undermine the Garnaut inquiry and win exemptions for electricity generation, the price tag for emissions certificates will be many times greater than the current profits made by the power stations.

“The Iemma government’s privatisation plan is colliding with the commercial realities of carbon pricing.

“Potential purchasers of the coal-fired power stations will take one look at the Citigroup’s forecast and slash their offers.

“The Iemma government’s privatisation will turn into a fire sale and the public will lose billions of dollars.

“If Treasurer Costa is intending to give the power stations away, then he should have the courage to say so. The pretence that privatisation would somehow protect the state’s coffers has to end.

“There is never a good time to sell off the electricity industry, but there could not be a worse time than now.

“With massive uncertainty about the final price of emissions trading, potential purchasers of the state’s power stations will be risk averse in their offers.

“The Treasurer is asking investors, already traumatised by the shakeout in the stock exchange, to take a massive punt.

“If Opposition Leader Barry O’Farrell is serious about protecting the public interest, he’ll join with us to block the sell-off legislation,” Dr Kaye said.

For more information:    John Kaye 0407 195 455