Australia urged to aim for 10% emissions cut

By Peter Smith in Sydney
Published: September 6 2008 02:57

Australia should target a 10 per cent cut in carbon emissions by 2020, the country’s leading adviser on climate change said on Friday, calling the minimum 25 per cent level agreed at a global climate change conference last December in Bali “not immediately feasible”.
Australia’s carbon dioxide emissions are equal to those of the US on a per capita basis and among the highest in the world, according to the US Energy Information Administration. Australia, which ranks 15th in overall carbon emissions, was a belated signatory to the Kyoto protocol on limiting carbon emissions, acceding last December as Kevin Rudd’s first act as prime minister.

The 10 per cent target was welcomed by business and disappointed environmental groups seeking more radical cuts.
Professor Ross Garnaut, an economist and mentor to Mr Rudd, said on presenting his carbon trading report on Friday: “I know much higher numbers have been talked about but I don’t think they are achievable at this stage.” Kyoto signatories from developed countries in Bali agreed to a cut of 25 to 40 per cent by 2020, but Mr Rudd did not make that commitment.
Prof Garnaut said cutting carbon emissions by 10 per cent by 2020 from 2000 levels would lower Australia’s gross domestic product by 1.1 per cent. His report set an initial price for carbon emissions of A$20 (US$17) per tonne from 2010, when trading would start. Rights to emit a tonne of carbon in the European Union until 2012 currently trade for about €24 (US$35) a tonne.
Don Argus, chairman of BHP Billiton, the Anglo-Australian mining group, this week echoed concerns expressed by many in business over the planned emissions trading scheme. He said uncertainties in the government’s proposals were harming needed investment in new power sources.
“Regulatory uncertainty and market distortions are to blame for new investments not occurring at the speed and magnitude required,’’ Mr Argus said.
Prof Garnaut’s final recommendations are expected to be made by the end of the month.
Green groups in Australia and elsewhere want carbon emissions cut by 40 per cent by 2020. Christine Milne, a senator for the Australian Greens, said the 10 per cent target was “laughable”.
“The rest of the world will regard that as selfish and in bad faith,” she said.
However the Australian Chamber of Commerce and Industry said Prof Garnaut’s targets were more realistic than many of the numbers that had been put forward elsewhere.
New Zealand’s parliament is to vote on an emissions trading plan next week. The debate on climate changes is marked by deep divisions between G8 nations and fast-growing emerging economies including China and India, with the prospect of an international agreement soon highly unlikely.
Copyright The Financial Times Limited 2008