Climate guru says we need to show the way

Courier Mail
Saturday 6/9/2008 Page: 4

CLIMATE change guru Ross Garnaut has rejected the Rudd Government's compensation plan for a radical credit system. But Professor Garnaut's supplementary draft report yesterday said Australia could afford to wear the costs of climate change and should flex its muscle to encourage an international agreement with China and Indonesia. He said the formula of an emissions trading scheme did not have to be "absolutely" right and spurned the Opposition's claim that acting too soon would be economically disastrous, saying Australia should forge ahead even without global agreement.

His report said Australia's target should be to slash emissions 10 per cent from 2000 levels by 2020 and 80 per cent by 2050. The Government has committed to only a 60 per cent reduction by 2050. But Professor Garnaut said that without an international agreement Australia should commit to 5 per cent of 2000 levels by 2020.

Described as a second-best option, the report recommended Australia should aim for an international agreement that stabilised the concentration of greenhouse gases in the atmosphere at 550 parts per million of carbon dioxide (they are currently at 455 ppm). Eventually 450 ppm should be sought.

But even at 550 ppm, Australia's landscape would forever change for the worse. The Great Barrier Reef would be consigned to the history books and half of north Queensland's rainforest would die. "The overall cost to the Australian economy from tackling climate change is very small and in the order of one-tenth of one per cent of annual economic growth," the report said.

"Australia can readily afford to make unconditional and conditional policy commitments of respectively reducing emissions. "We might not have to get it absolutely right. But if we get it wrong we will have heavily, maybe permanently, compromised our ability ever to find our way back on to a sound path." Professor Garnaut recommended the price of carbon be fixed at $20 a tonne from 2010, increasing each year by 4 per cent plus CPI.

The 49-page report detailed how household budgets and business revenue would be affected by cutting emissions. Federal Government modelling predicted that under the ETS, electricity bills would rise by 16 per cent, gas and other household fuels by 9 per cent and the consumer price index (a measure of inflation) by 0.9 per cent in 18 months' time. The largest impact would be on about 1000 major business polluters. Those who emitted 25,000 tonnes of carbon dioxide equivalent would have to access permits to pump greenhouse gases into the atmosphere.

At $20 a tonne, those which emitted 25,000 tonnes of carbon dioxide would have to pay $500,000 a year to pollute. But he disregarded the Government's plan to compensate business based on how much they polluted. After business complained the Government's compensation model was unfair, Professor Garnaut yesterday revealed a new system which would credit companies by how much the price of their products increased. They would receive credits only if there was no international emissions scheme.