the 1980s and 1990s -- have underpinned rising prosperity and sustainable growth in Australia. Our economy will continue to grow strongly with a carbon price in place. Incomes grow: Gross National Income per person increases from today's levels (around $56,000) by around $9,000 per person to 2019 -- 20. By 2050, the increase is expected to be more than $30,000 per person in today's dollars. Large?scale renewable energy (excluding hydro) is projected to be 18 times its current size by 2050. Total renewable generation (including hydro) will comprise around 40 per cent of electricity generation in 2050. Gas?fired electricity increases by over 200 per cent by 2050. The key elements of the carbon pricing mechanism are set out below, and are described more fully in Chapter 3 and in Appendix A. Key elements of the carbon pricing mechanism Price A two?stage approach: Fixed price period -- The carbon pricing mechanism will commence on 1 July 2012, with a price that will be fixed for the first three years like a tax. The price will start at $23 per tonne and will rise at 2.5 per cent per annum in real terms. Emissions trading scheme -- On 1 July 2015, the carbon price will transition to a fully flexible price under an emissions trading scheme, with the price determined by the market. Treatment of fuel and transport Transport fuels will be excluded from the carbon pricing mechanism. However, where applicable, an equivalent carbon price will be applied through changes in fuel