Tuesday, 27 September 2011

Baillieu warned not to go it alone on climate

21 Sep 2011, Page: 2

VICTORIA'S Treasury warned the Baillieu government to avoid ''state-based'' climate change policies because a national carbon price was the best way to cut emissions. Treasury's ''blue book'' brief to the incoming government also urged it to wind back any measures promoting particular renewable technologies, saying ''picking winners'' in climate change policy was ''costly and distortionary''. The brief, obtained by The Age, says the state government should review climate policies to prepare Victoria for the eventual introduction of a national carbon price.

''A national price on carbon is the most efficient and effective way to reduce greenhouse gas emissions,'' it says. ''State-based climate change mitigation policies should be avoided.'' Premier Ted Baillieu has backed the concept of a price on carbon. But in recent weeks the government has stepped up its attack on the Gillard government's carbon tax, claiming the plan provides Victoria with insufficient compensation and will penalise the state because of its brown coal dependence.

Spring Street has also backed away from a legislated target to cut state greenhouse emissions by 20% by 2020, despite signing up to it in opposition. It is preparing to back away from state renewable energy targets. Energy and Resources Minister Michael O'Brien labelled the targets of the former Labor government an ''expensive gimmick'' after an audit report found the proportion of the state's power generated using clean energy sources had barely increased despite investment of hundreds of millions of dollars.

The briefing reveals that Treasury seemed to agree: ''The promotion of particular renewable technologies, being both costly and distortionary, should also be avoided and existing measures wound back.'' Meanwhile, federal government climate adviser Ross Garnaut has warned that other countries will be ''significantly discouraged'' if Australia does nothing to mitigate the effects of climate change.

''We are famous as the developed country with the highest per capita emissions,'' Professor Garnaut told a business seminar in Sydney. ''If we chose to do nothing, that will be significantly discouraging for other countries.'' He acknowledged there was uncertainty in predicting climate change mitigation costs. ''Even in the few years between 2007 and 2011 we were finding that the costs of a number of the new technologies were significantly lower than what we had been assuming.''