This is worth the read…
All spin aside, here’s the inconvenient truth
The Age, July 5, 2008
ROSS Garnaut’s draft report on climate change has six key messages. They are uncompromising, politically tough and they would work. This report is not about spin, but reality.
Message 1: Climate change is happening faster than anyone foresaw, thanks to the industrialisation of China and other developing countries. That will grow even faster and without global action to stop it, so will the climate change.
Message 2: Because it is so dry, Australia is the rich country most exposed to climate change. Its rivers could stop flowing, its farms become unviable, its export prices collapse unless the world brings climate change under control.
Message 3: The situation requires a global agreement, including China — but it will happen only if rich countries lead the way. Australia has to be part of that.
Message 4: The cheapest way to tackle climate change is to set up an emissions trading system quickly, and on the widest possible front — including petrol. Excluding petrol, by definition, will cost us even more in some other area.
Message 5: The revenue raised should be returned to households and business as tax cuts, higher welfare benefits, renovations to cut household energy waste, money for new technology and subsidies to firms competing globally in high-emission industries such as aluminium.
Message 6: New technology is the hope of the side. The West should invest $100 billion a year to research, develop and commercialise low-emissions technology such as solar energy and clean coal — with $3 billion of that in Australia.
This is a draft report; there’s no detailed blueprint with targets. But there are two interesting sets of numbers.
The first is in chapter 4, where Treasury models what Garnaut’s estimates of future GDP growth imply for emissions. They show economic growth in developing countries will be so rapid that — without global action — by 2030 global emissions will almost double their 2005 levels.
More than 90% of that growth would be in developing countries. China alone would produce 35% of the world’s emissions, more than the West and the old Soviet bloc combined. That’s why only a global agreement to reduce emissions (or in developing countries, to cut emissions growth) will work.
Then why introduce emissions trading now, you ask? Why not just hold out for a global agreement?
Garnaut gave a long list of reasons why we shouldn’t wait for the world; two stand out. First, we would not be alone: virtually all other rich countries already have emissions trading or are moving towards it.
Second, the clincher is “sheer practicality”. The West put most of the excess greenhouse gases up there; Australia has the West’s highest per capita emissions. “There won’t be a next step unless the developed countries move first,” he warned.
And, we must accept that, over time, per capita emissions will become the basis for reducing global emissions.
But that’s OK: it’s in our interests to reduce emissions and slow global warming. And the money raised from emission permits will be returned to households and business.
Garnaut proposes that of the $20 billion or more to be raised every year from emission permits, 50% be directed at households, through a combination of tax cuts, higher welfare benefits and energy-efficient renovations of battlers’ homes. The bulk of this would go to low-income households, where fuel bills take up twice the share of spending as in well-off homes.
Another 30% of emissions trading revenue would go to business, mainly to emission-intensive industries competing with developing countries. And 20% should be invested to research, develop and commercialise technology — such as the solar power station at Robinvale, and the demonstration “clean coal” plant announced this week for Loy Yang.
After initial hesitation, the Government seems to be gradually accepting Garnaut’s clean, comprehensive, low-cost road map as the way to go.