Ross Garnaut’s carbon pricing paper requires Prime Minister Julia Gillard and Climate Change Minister Greg Combet to be honest about how high a carbon tax will be set to see renewable energy growth, says Australia's leading free market think tank.

Ross Garnaut launched his carbon pricing update at the National Press Club today arguing for a starting price of $20 to $30 per tonne of carbon then rising 4 per cent annually.

Institute of Public Affairs Director of Climate Change Policy, Tim Wilson said “To date Gillard and Combet have squibbed on telling Australians what level of carbon tax is needed to cut emissions by forcing the introduction of lower emissions technology.

“Garnaut has let the cat out of the bag arguing the level is high and will need to perpetually increase into the future.”

In a Sky News interview, Mr Combet said his carbon tax would be “well south” of $45 per tonne but the ANU Centre for Climate Economics and Policy argued earlier this week $70 per tonne is required to transition to gas.

According to The Weekend Australian, a Morgan‐Stanley report argues carbon tax would need to be $60 – $70 per tonne to drive gas investment.

Mr Wilson said the Centre for International Economics report released this morning highlights similar price ranges, and higher, are needed if the government is to meet its emissions targets.

“A $70 per tonne carbon tax alone would increase the annual electricity bill of the average Australian household by more than $500.

“To prompt new investment a carbon tax will have to increase well beyond the rate the government is conceding and as it goes up so will household electricity bills.

“Gillard and Combet can argue their carbon tax details still need to be worked out, but that doesn’t stop them being honest about the carbon tax that they will impose on Australia,” Mr Wilson said.