Suhit Anantula's List: Garnaut Draft Report

• The Garnaut Climate Change Review has been commissioned by Australia's Commonwealth, state and territory governments to examine the impacts, challenges and opportunities of climate change for Australia. A Draft Report was released today at 12:30pm, and the Final Report is due by 30 September 2008.

• The Garnaut Review released its Draft Report on 4 July, 2008.
   
   The Draft Report describes the methodology that the Review is applying to evaluation of the costs and benefits of climate change mitigation; to the application of the science of climate change to Australia; to the international context of Australian mitigation, and to Australian mitigation policy.

• Ross Garnaut, in his much awaited draft report, seeks to turn that argument on its head: Australia has much to lose from even the mildest impacts of climate change. If we want to save our economy, then we need to save our environment first.
• Garnaut says a full assessment of the economic impacts will be made in his "supplementary" draft report, due in late August, which will include modelling from Treasury and suggested emissions reduction targets and trajectories
• Of course, not all generators find themselves in such a predicament. Origin Energy CEO Grant King says he wants an emission trading scheme. That’s because his company has been smart and has seen what’s coming. It has invested heavily in gas resources, which have much lower emissions than coal, and in renewables, particularly wind and geothermal. Not only does King want a carbon price, created by the issuing of permits and other constraints, he wants to ensure it is high enough to achieve the desired reduction in emissions. If heavy emitters such as coal are excluded, then there is no reductions scheme.

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• If Australia chose a "middle-of-the-road" policy, the effects of climate would still cost about 4.8 per cent of gross domestic product, or around $400 billion, by end of the century, Mr Garnaut said in launching his report. 

  "An effective market-based system will be as broadly based as possible, with any exclusions driven by practical necessity and not by short-term political considerations," the report said.

• Further to this, on the vexed issue of compensation, Professor Garnaut’s focus on equity, and supporting low income Australians well ahead of industry, is pleasing. As we had hoped from the man who noted that nobody was compensated when we floated the dollar, Garnaut is strong on not compensating the coal industry for stranded assets.
• Garnaut’s biggest problem, however, and the one which may condemn by association all the good material in this draft report, is his support for a slow start to the regime, with a carbon price cap ensuring we don’t try to beat our pitiful Kyoto target, and a significant step backwards on the ALP’s 60% 2050 target, which he now sees as acceptable in the current global context.

• Garnaut describes a few categories of economic modelling: The first category is ‘conventional market economic effects’, things you can measure and have data for. The scond category is ‘things you can measure and model but for which you have no real data’. Tourism falls into this category and so his core model excludes tourism for now. The third category is ‘things we value but that fall outside conteporary economic models’, things such as the Great Barrier Reef, which, when we lose them forever there’ll be a national sense of mourning. He emphasised that the numbers only tell a story in category one, tell a made up story in category two, and tell no story at all in category three.

• Professor Ross Garnaut has finally handed down his draft report, and it leaves much to be desired. While I agree with his overall sentiment that Australia needs a massive wake-up call and must quickly and strongly to reduce greenhouse pollution, the devil in the Emissions Trading Scheme (ETS) is all in the detail.

• With every man and his dog responding to Garnaut, please find below our response to the key elements for agriculture. Please contact me if you would like to follow up.

• Today marks the start of a critical phase in our response to climate change and it’s important we remain focussed on the main game, there are three key tests.

  1. Reversing Australia’s still-rising greenhouse pollution by 2012 - data released last week showed continuing increases with the biggest spikes from electricity generation, up 53 per cent between 1990-2006, and transport, up 27.4 per cent during the same period. We should, and can, reverse this trend by 2012 with reductions of at least 25 per cent on 1990 levels by 2020.

  2. Leadership to achieve an effective global agreement - Australia can only help to achieve the global climate agreement so vital to our long term national interest if we are committing to reduce our emissions, but also signal that we will invest in clean technology in developing countries and help them prepare for unavoidable climate impacts. A guaranteed proportion of the emissions trading revenues should be set aside for such assistance.

  3. Making Australia competitive in the global low carbon economy - Meeting emission reduction targets and building the clean-energy alternatives will generate trillions of dollars of investment opportunities. Australia needs policies to ensure all new electricity load generation comes from clean energy and that support, not hinder, investment in clean energy and low carbon technologies.

• Read our full coverage of both news and commentary on the Garnaut Climate Change Review.

• He said putting an ETS on "training wheels" would help the scheme inter-connect with international carbon markets but warned that taking strong action should not be delayed.

   

  "Australia would be hurt more than other developed countries by unmitigated climate change, and we therefore have an interest in encouraging the strongest feasible global effort," he said.

• Ross Garnaut has a scare for his fellow Australians

• Garnaut by numbers

• My conclusion on that chapter: it marks a watershed in proper thinking about why an Australian government should support innovation and, not surprisingly, as a result as for a big hunk of support. However, I am less enamored by the focus on matching grants. There is potential for so much more when it comes to the environment.
• What is interesting is that Garnaut calls for this magnitude of spending while ruling out “wrong arguments” for greater spending on innovation. These include that need for speed (ruled out because, if the emissions cap is binding, that is what emissions will be; end of story), low permit prices (ruled out because the setting of future targets will mean that prices will rise and innovation is all about the future), and that innovation will soften the blow from the carbon cap (ruled out because this blow is the point of the whole exercise

• Chapters 1 to 14 are fine and a good read but there is nothing really new. Chapter 15 is where it all happens. That is where the details of how an emissions trading scheme will be set up are discussed. It

• Small and medium sized business must receive their fair share from any Federal Government scheme to assist those facing increased costs under a carbon trading scheme, industry groups say.

• ACT Opposition spokeswoman Vicki Dunne says government must get the public on board as it develops policy from the findings.

   

  "I think that what I'd like to see from the report is perhaps something a little more consumable for the average person than the 500 odd page report that there is now," she said.

   

  "I think there needs to be a lot more engagement of average voters, average citizens on the subject."