Garnaut gives rival lobbies his final answer

Canberra Times
Tuesday 30/9/2008 Page: 8

Professor Ross Garnaut will issue his final report into emissions trading today, with conservationists pushing for tough environmental protection and business groups urging strong support for economic growth. In May last year, state Labor governments and the then federal Labor Opposition commissioned Professor Garnaut to provide advice on the most economically efficient response to climate change. Professor Garnaut has issued a discussion paper and three draft reports containing recommendations on most key issues.

The final report is expected to contain fresh data on the impact of emissions trading on the energy sector, transport and forestry. Professor Garnaut's most important draft recommendation is that Australia should aim to cut greenhouse gas emissions by 10 per cent within 12 years - or by 5 per cent if a global agreement on tackling climate change cannot be reached. He believes Australia should aim for a global atmospheric concentration of 550 parts of carbon dioxide per million.

Both recommendations prompted a storm of criticism from green groups, who have lobbied him to toughen tip the targets in the final report. The Federal Government says Professor Garnaut's report is merely a guide to what form its official climate change strategy will take. The Government's own process is now under way. Its draft plan, contained in a green paper issued in July, is to be supplement by a final plan, in the form of a white paper due out by year's end.

Today's final report will present up-to-date modelling on the impacts of climate change, but the main conclusions have been flagged for some time. The emissions trading scheme that forms the central response to the challenge of climate change in the initial Garnaut Report and the Government's green paper drew heavily on the Shergold Report commissioned by then prime minister John Howard in 2006.

One of the key links between them has been the influence of former Treasury official Martin Parkinson, who headed the Shergold secretariat and now heads the Department of Climate Change. But, for all the recent attention to climate change, the fact is that there has been little original thinking on this problem for a long time.

Treasurer Paul Keating commissioned the Productivity Commission - then called the Industry Commission - in 1991 to report to the government on how Australia would best prepare itself to respond to future rises in temperature estimated by the Intergovernmental Panel on Climate Change to be somewhere in the range of 1.9 to 5.2 degrees.

The 1991 report, The Costs and Benefits of Reducing Greenhouse Gases, came up with with familiar sounding points. The 251-page report said the cost of acting on climate change would be "around 1.5 per cent of Australia's national product", with the greatest impact coming from the impact on the nation's coal sector.

The report stated:
*Difficulties arise due to the global nature of the problem, with nations tempted to freeload on the efforts of others,
*Difficulties will also come from managing the issue in countries at different stages of economic development;
*International consensus is unlikely in the foreseeable future, but unilateral action would bring great costs for negligible benefit.

The commission recommended active participation in international negotiations. It also recommended the use of "market-based instruments to pursue a consensus target". It specifically advocated tradable permits as the most efficient policy instrument. But it noted that while "tradable permits are thus very attractive in principle, there are some difficulties to overcome in devising a workable system".