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Garnaut Climate Change Review Draft Report: A diabolical challenge
Garnaut Review Releases Draft Report
Australians are facing risks of damaging climate change. Without strong and early action by
Speaking at the National Press Club in
Early economic modelling results of readily measurable unmitigated climate change for middle of the road outcomes on temperatures and decline in rainfall – indicate that climate change would wipe off around 4.8 per cent of Australia’s projected GDP, around 5.4 per cent of projected household consumption, and 7.8 per cent from real wages by 2100.
“These readily measurable costs are only part of the story. There are also conventional economic effects that are not currently measurable, the possibility of much larger costs from extreme outcomes, and costs that aren’t manifested through markets,” said Professor Garnaut.
The full economic modelling results, to be released in a Supplementary Draft Report in August, will help complete the picture for Australians, by comparing the costs and benefits of climate change mitigation. This will inform the Review’s consideration of emission reduction trajectories and targets. The Final Report will be released in September.
Professor Garnaut said that the climate change impacts would be significantly reduced with strong global mitigation.
“We will delude ourselves should we choose to take small actions that create an appearance of action, but which do not solve the problem. Such an approach would risk the integrity of our market economy and political processes to no good effect,” said Professor Garnaut.
“Australians are well placed to deal with the challenges of this major economic reform. As with all economic reform, mitigation policy must be forward-looking. Policy interventions and the use of public and private resources should focus on improving future economic prospects rather than reacting to past decisions”, said Professor Garnaut.
The Draft Report provides the Review’s suggestions on the design of the emissions trading scheme (ETS). Professor Garnaut reiterated his support for the ETS to cover as many sectors as practicable.
“The more sectors included in the ETS, the more efficiently costs will be shared across the economy. Transport should be included,” said Professor Garnaut.
The Draft Report advocates the full auctioning of emissions permits and the return of all revenue to households and business.
“The cost to consumers of rising energy and petrol prices, can be balanced through payments to households, while preserving price incentives to reduce emissions,” he said.
The Report proposes that half the proceeds from the sale of all permits is allocated to households, around 30 per cent provided for structural adjustment needs for business (including any payments to TEEIIs), and the remaining 20 per cent allocated to research and development and the commercialisation of new technologies.
“The proceeds from the ETS should be allocated for purposes that will help
“A massive increase – reaching $3 billion per annum – is required in
The Draft Report states that it would be in
“Additional mitigation policies should only be undertaken where they will lower the overall cost to the economy, by correcting market failures,” he said.
Professor Garnaut said that he supported the phase-out of the Mandatory Renewable Energy Target, once the unconstrained ETS was fully operational.
“The Review’s first aim is to lay out the issues for policy choice in a transparent way. We will have done our job if Australian governments and the community make their choices in full knowledge of the consequences of their decisions,” said Professor Garnaut.
Govt urged to act swiftly on Garnaut findings
Environmental and industry groups have urged the Federal Government to act on climate change findings in a draft report presented by Professor Ross Garnaut.
Mr Garnaut called for an emissions trading scheme for
He would include petrol but initially exclude agriculture, but above all he stresses the urgency of introducing the scheme if the death of Australian icons like the Barrier Reef is to be averted.
Speaking on the release of his report in
Climate Change Minister Penny Wong says the Garnaut report shows
She says she will detail the Government's plan on an emissions trading scheme this month.
"What this confirms yet again is that this nation must take action on climate change," she said.
"We have a very strong interest, a national interest in tackling climate change. It confirms the Government's view that is if we take responsible action now the cost will be far less than if we delay."
Bipartisan support needed
Greg Bourne of the WWF says he supports Professor Garnaut's recommendation of a broad-based emissions trading scheme (EST) and has called on the Opposition to support it.
"We need to spread the burden across the economy. Everyone has a little bit of burden and everyone is prepared to pay that," he said.
"The most important thing is the Opposition needs to get behind Garnaut, to back this up. The continued trivialising of these most important of issues is not good leadership for the public of
But Opposition Leader Brendan Nelson says his party will be guided by its own advice on an emissions trading scheme.
Dr Nelson says the Federal Government would be rushing a carbon trading scheme if it were to begin by 2010.
"Last year in government, the advice that had been given to the previous government was that the earliest you could start to introduce it was 2011 and to get it running by 2012," he said.
"The most important thing for us is that we get this right, we owe it to our children. Importantly we protect jobs and don't send jobs and industries off to other parts of the world."
Dr Nelson says it must be acknowledged that
Tony Maher of the CFMEU has urged the Government to endorse the report.
"Thank God for Garnaut. At last we've got a balanced approach to emissions trading and climate change generally. Professor Garnaut has outlined an approach that gives priority to the low paid and that's the first time we've heard that," he said.
Wilderness Society spokeswoman Virginia Young says Professor Garnaut has highlighted the urgency of the need to act.
"It was also heartening to hear him reassure the community that action now will be less disruptive and more economically feasible than action in two years time or three years time or 10 years time," she said.
Queensland Premier Anna Bligh says Professor Garnaut has made some interesting suggestions.
"He proposes an emissions trading scheme where 'permits to pollute' effectively would be bought and sold, and the money arising from it could then be returned by way of compensation and assistance to both householders and industry," she said.
"I'll be very interested to hear what not only industry, but what citizens have to say about it."
Interest group support
Brett Solomon, executive director of activist group Get Up, says it is clear
"I think the impact of the ETS on petrol prices will be minimal in comparison to the international oil prices that we have no control over," he said.
"The threat to Kakadu and the
He has urged the Government to adopt the report and implement its findings.
Climate Institute chief executive John Connor says the Government must focus its policy on investment in clean energy rather than consumption and says the report paints a stark picture about the cost of inaction.
However he says the report also provides hope that
The Climate Institute is looking closely at some of the renewable energy target recommendations but Mr Connor says it broadly supports most recommendations, including the report's approach to encouraging better practice within the trade-exposed emissions intensive industry.
The Queensland Farmers' Federation (QFF) says it welcomes the report's recommendation that agriculture not be included in an emissions trading scheme for the time being.
Professor Garnaut says there should be a delay in including agriculture because it is hard to measure the greenhouse emissions in that sector.
But QFF CEO John Cherry says he is not convinced the agricultural sector should ever be included.
"There are some fundamental problems with applying an ETS to agriculture, we're not sure we can sort the measurement issues out," he said.
"We're not sure that his compensation mechanism sorts out the trade exposure issue and we might end up exporting our agriculture industries to countries that don't have an ETS."
Greens Senator Christine Milne says Professor Garnaut has painted a dire picture if urgent action is not taken, but his recommendations are too soft.
"His slow start is completely unacceptable. If you believe that climate change is as urgent and dire as Professor Garnaut says it is, how could you possibly be suggesting that the first two years of any trading scheme simply be at the
ACTU head Sharan Burrow says workers will be hit hard by climate change, and today's report should send a warning to reluctant businesses to get on board.
"We can't afford not to act and we say to those businesses generating hysteria, put your case, evidence-based, absolutely transparent, you'll get support if you need it," she said.
"But there can be no 'get out of jail free' cards, everybody must be in this."
Greenpeace's Steve Shallhorn says Professor Garnaut is right to push for urgent action, but some of his policy advice has missed the mark.
"Unfortunately some of his prescriptions fall a little short," he said.
"He has too much emphasis on the notion of clean coal which will not be ready for at least another two decades and we need to take very strong action on a much quicker time frame than that.