Australia's quality of life at risk without urgent action on climate change: report

Barbara McMahon Sydney
guardian.co.uk,
Friday July 4, 2008

Australia's environmental jewels such as the Great Barrier Reef are at risk from climate change. Photographer: Queensland Tourism/AP
Australia was urged today to "think big" on climate change and to adopt without delay a broad-based greenhouse gas emissions trading scheme in as many industries as possible, including the energy and transport sectors.
Professor Ross Garnaut, the Australian government's chief climate change adviser, said that climate change was already having a huge impact in one of the hottest and driest countries in the world.
The veteran economist acknowledged that any proposal to put tough limits on greenhouse gas emissions would have a major impact on Australia's economy. He suggested tax cuts and welfare payments should be offered to help compensate families and businesses.
At the launch in Canberra of his long-awaited report, ordered by the Australian prime minister, Kevin Rudd, to help shape policy, he warned Australia could not afford to avoid taking hard decisions.
Without strong and early action, he commented, Australia's "prosperity and enjoyment of life" would be affected. He said that if no action were taken, climate change would cut 4.8% of gross domestic product, more than AS$400bn (£194bn), by the end of the century. He also warned that some of Australia's most celebrated tourist destinations, environmental jewels such as the Great Barrier Reef and the wetlands of Kakadu in the Northern Territory, might be lost.
"We will delude ourselves should we choose to take small actions that create an appearance of action, but which do not solve the problem," he said. "Such an approach would risk the integrity of our market economy and political processes to no good effect."
The 600-page report recommends the full auctioning of emissions permits and the return of all revenue to households and businesses. Garnaut stressed that the emissions scheme should not raise revenues for government. The report proposes that half of the proceeds from the sale of all permits is returned to households, around 30% to hard-hit businesses and the remaining 20% allocated to renewable energy projects.The report also said it would be in Australia's interest to find out as soon as possible whether there can be a low-emissions future for coal, and to support rapid deployment of commercially promising "carbon capture and storage" technologies. This follows from Australia's role as the world's largest exporter of coal and the central role of coal in the growth of emissions from its regional neighbours in developing countries in Asia.
Rudd won a decisive election victory in November 2007 on a green agenda, promising an emissions trading scheme that would be up and running by 2010, but the prospect of putting emissions limits on transport and electricity is already unnerving the Australian public which is struggling with the rising cost of living.
Australia's opposition Liberal party, which had initially supported the plan, has also said the 2010 timetable is unworkable and wants to delay the scheme for a further two years.
The energy, coal and agricultural industries have been lobbying hard to protect their interests and were accused this week of running "scare campaigns" warning that electricity prices would rise sharply, and businesses will become less competitive against foreign rivals, and that some companies will go to the wall.
The report concedes that the emissions trading system could cause price fluctuations in its early stages and concedes a compromise may be required in the shape of fixed price permits for the first two years of the scheme. It said "emissions intensive" industries should be compensated if their off-shore rivals were free to pollute, with compensations to be determined by a carbon-bank regulator.
The prime minister has already indicated the government will not be bound by all the recommendations in the report. "There is no dispute about the science - that it is happening," he said. "The practical question becomes one of, first of all, what are the economic costs of not acting as opposed to the economic costs of acting." He said acting was the "right and responsible way to go".
Garnaut said his recommendations on specific emissions targets and carbon prices would be contained in a supplementary report that he was working on with the federal treasury department which would be released at the end of next month. "When we have that, we can talk in more detail about the structural impact on the Australian economy," he said.
Australia's influential Green party said Garnaut's report did not go far enough. "Garnaut's warning that delay is not an option is completely disingenuous in the context of his recommendation of a slow start to the scheme, capping the price of carbon before 2012 and not seeking to go beyond Australia's pitiful commitment to Kyoto's first phase," Senator Christine Milne said.
"If we are to have a real chance of avoiding catastrophic, runaway climate change, we will need rapid, transformative policies to build a new post-carbon economy, not ad hoc, incremental change that prioritises increasing our wealth over protecting our future."