garnaut report
9 Jul 2008
This Time the Sky Really Is Falling
Garnaut's draft report has already received much misguided criticism, writes Ben Eltham
It's a "diabolical" policy issue which presents possibly the greatest challenge Australia has faced since World War II. But so far, Australia is not dealing well with the implications of climate change.It has been less than a week since the release of the most sustained and detailed policy response to the problem of anthropogenic global warming yet published by the Australian Government - the Draft Report of the Garnaut Review - and we've already had the NSW Labor Treasurer proclaim the sky is not falling, the Liberal Opposition signal they will line up solidly on the side of big polluters, and a national broadsheet newspaper publish a grab-bag of ill-informed quotes from discredited non-experts under the heading of "science".
Welcome to climate change: Australia, 2008.
First, let us examine Professor Garnaut's mammoth draft report itself. Economics journalist and blogger Peter Martin put it best when he called it "clear, evocative, sobering and persuasive". The document is a tour de force of reasoned policy analysis - a large, thoughtful and considered response to the massive global problem of climate change. Like the UK Treasury report by Sir Nicholas Stern, which it in some ways builds on, Garnaut starts from the straightforward axiom that anthropogenic climate change is no longer in serious doubt.
The key sentence, repeated several times in the Draft Report, is this one: "The Review takes as a starting point, on the balance of probabilities and not as a matter of belief, the majority opinion of the Australian and international scientific communities that human-induced climate change is happening, will intensify if greenhouse gas emissions continue to increase, and could impose large costs on human civilisation." [my italics]
Of course, Garnaut is an economist, not a climatologist. This means he is like the vast majority of informed non-experts, who have only two choices in the debate on the science of climate change: to agree or disagree with a vast body of observed evidence as interpreted by thousands of climate change experts.
Denial strategies range from cherry-picking data in sophisticated smokescreens to claiming that climate scientists are engaged in a vast conspiracy. None of them are credible. The earth is warming up, and humans are causing it.
It's worse than that, actually - as anyone who has followed the scientific debate closely will know. Not only is the earth heating up rapidly, but global greenhouse gas emissions are actually growing faster than even the worst-case scenarios of the International Panel on Climate Change. Far from getting out of the way of the oncoming train, we're actually running towards it.
The result, as James Hansen and other leading climate scientists are arguing, is that atmospheric carbon concentrations are already dangerously high, and that the kind of emissions reductions promised by rich nations are not going to be enough to stabilise the atmosphere. The Rudd Government's 60 per cent carbon emission reduction target is too low. We're going to need to mitigate more aggressively. If we can't turn it around, to quote Hansen, "we're toast".
After examining the science, Garnaut turns to the economic costs of climate change - in particular, the costs of doing nothing as opposed to beginning to mitigate that change now. These are massive. For starters, say goodbye to the Great Barrier Reef, irrigated agriculture in the Murray-Darling and Australia's alpine skiing industry. Get ready for dramatic increases in the number and severity of bushfires and droughts, more deaths from heat stroke and tropical diseases, and vast influxes of refugees from collapsing states in the Pacific. If the world can somehow mitigate climate change, many of these risks will be reduced. Garnaut models the benefit at approximately 5 per cent of GDP.
The Emissions Trading Scheme that Garnaut proposes has already been examined in newmatilda.com by Anna Rose, but briefly, it works like this: the Government sets a cap or limit on the amount of carbon and other greenhouse gas emissions, nationally. Those who emit carbon will need a permit from the Government to do so. The Government sells these permits, which can also be traded in an open market. The result is a steadily decreasing number of permits for carbon emissions, combined with a big new source of revenue for the Federal Treasury. We're still waiting for the economic modelling from Treasury on this vital topic: just how much will a tonne of carbon cost?
What no one disputes is that carbon emissions trading will make just about everything more expensive: petrol, food, electricity and transport. On the other hand, it will also give the Government a big windfall with which to compensate those affected: chiefly poorer people, electricity generators and so-called "trade-exposed, carbon-intensive industries" like cement manufacturers and aluminium smelters.
Garnaut proposes distributing the revenue windfall in a 50:30:20 ratio - 50 per cent to households, 30 per cent to carbon-intensive export industries, and 20 per cent to renewables research. It's a politically driven formula, and Greens have criticised it for being too friendly to industry and not giving enough to research. From the opposite perspective, Alan Kohler in Crikey has questioned the giant new bureaucracy such a permit system will necessitate.
On the other hand, it might just work.
Garnaut's intelligent and well-resourced report has already drawn howls of misguided criticism. Among the most ignorant is this contribution from NSW Treasurer Michael Costa, who used the ever-willing op-ed pages of The Australian to paint Ross Garnaut as "Chicken Little". Such invective is unsurprising from Costa, a well known climate change skeptic whose patchy intellectual background I explored in newmatilda.com earlier this year.
But in Ross Garnaut, Costa has encountered a willing opponent. Garnaut struck back on Monday, pointedly calling Costa a "denier of the science". While many in his own party will be pleased to see someone take a stick to the profane and disputative NSW Treasurer - who has sadly refused to debate Garnaut on the issue this Thursday - the controversy also illustrates just how poorly the Rudd Government has performed in selling this huge reform.
As Lenore Taylor wrote recently in a fine column: since the budget, the Rudd Government's media strategy has been scattered and multi-messaged. This has allowed a scare-mongering Opposition and its cheerleaders in the Murdoch press to seize the agenda on climate change with populist calls for petty reductions in petrol excises and short-sighted attempts to delay the start of the ETS. The Prime Minister was finally on the front foot yesterday in The Australian with an opinion piece explaining why we need to act now. It's a step in the right direction, but Penny Wong, Peter Garrett, Wayne Swan and Anthony Albanese also need to lift their game. The Government needs all of its hands on deck.
Meanwhile, Brendan Nelson is leading his party ever further into the wilderness of climate change denialism, arguing that Australia should wait for India and China to act before we do. As Bernard Keane observed yesterday in Crikey, it's a dangerous strategy.
The polls demonstrate that the Liberals are losing the climate change debate: Australians want action and favour an emissions trading scheme. The Libs risk defining themselves on the wrong side of the debate, which will define Australian public policy for the next generation.
On Friday Ben Eltham will report from Ross Garnaut's public briefing in Sydney.
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No faith in ETS , market based options in total are too soft.
Lets look at one major issue , electricity generation , in ten years we need to have almost finished with coal powered boilers .
Ban coal powered boilers and implement strategies to manage the social effects of closing coal mines.
Implementation of industry policy to research and implement the correct technology for baseload generation.
Governments need to stop fence sitting and lead thats the job we employ them for and it includes riding roughshod over vested interests where necessary.
A lot of wasted effort on technological deadends , biofuels , photovaltaics , hybrid cars none stack up as far as total reduction of the infamous carbon footprint.
We have the technology for change , just not the leadership.
http://energytower.org/
http://www.yourownpower.com/Power
Governments fence-sit because they want to be re-elected. That’s their only goal. Like big businesses, they aim for nothing more ambitious than getting their executive bonuses. There are no people in charge, whether they be in government or private enterprise, who care about anything beyond their own comfort. A couple of suggestions:
1 Why doesn’t the federal government advance the money for everyone to have solar hot water and solar power to add to the grid, then claw back the loans by having us all pay the equivalent of our electricity bills until the debt is repaid. From then on it’s all free for everyone. The government’s got its money back, the householder is operating at a reduced cost.
2 Why doesn’t the government bring in a flexible tax system for motor vehicles whereby the heaviest, greediest and most unsafe vehicles pay far more for their registration and the safest, most frugal vehicles pay least? If we need to give farmers a concession for their 4-wheel drives why not bring in a rule that says that the place where the 4WD is registered is the householder’s principal private residence. It would be interesting to see whether it was worth a Mosman doctor’s while to pay capital gains tax on his mansion in order to get a reduced tax on his Porsche Masturboni.
There are a dozen other obvious things that spring to mind, but no government will pay any attention to them if it means becoming even slightly unpopular.
What about some more suggestions from NM readers? Perhaps we can pass them on to GetUp and get some action?
douglas jones
I do not understand the idea of compensations surely they only reduce the signal given by a price increase?
Neither do I understand the role of states and commonwealth. The states have put in place some measures designed to reduce household energy use, design to solar hot water to solar power, the commonwealth has flagged trading as its response. Where do the responsibilities lie?
The literature indicates many ways suggested to reduce energy use and hence greenhouse CO2, directed not only at housing, in which the call for household solar hot water must rank as an antique, but at industry and management of the embodied energy discarded as waste, yet to be fully addressed and many other suggestion whose extent of whose adoption is rarely indicated. Factor Four and similar publications list these. So why are adoption not reported, shame rather than blame and up to date figures on times for payback of the various suggestions? Profitability, surely a God like term!
It does seem to me that the problem is not just an economic one but a social attitude one a primarily. Perhaps the economic paradigm current, consumption and production. If we believe profit and possession is the aim of life without understanding how such are created as I believe we currently do, competition not co operationbeing the driver, then any method devised will need enormous means of policing to be effective. If on the other hand we believe in responsibility for the capital value of what we currently run down, then a different pattern emerges. We might even revisit, if indeed any did visit, the idea of having accounts include the value of used resources as Daley and Cobb amongst other suggested in their book for the common good, suggest Backsliders might even be accorded the media treatment at present given to child molesters, male of course though examination suggests not so confined.
Silly thoughts for the payoff only comes to all free loaders and to later generations rather than immediately ours. Stupid!
Lets have a peek at two varied issues :
Heating your home in the country , slow combustion heater is really the only effective option although people are turning to split systems in droves . So more demands for electricity and a dwindling fire wood supply . Not as headline making as an ETS , but a grassroots issue that needs to be addressed . The answer is hydronic heating using heat pumps , and replacing old wood heaters with the latest generation , but where is the policy to support this.
Fuel Pricing and associated mass hysteria , smaller, lighter cars , using current turbo diesels and diesel/gas engines are a great interim step , as would removing the oldest ten percent of cars . We are yet to see if the current fuel price changes buyer preference for big heavier vehicles , indications are that it will have little effect as it is what I term only a two stubby burden.
The devil is in the detail.
Ok Ben, your turn…
Firstly, nobody with their head screwed on properly would argue against the proposition that "the earth is warming up, and humans are causing it."
Stop fighting that battle. You’ve already won.
The real problem is why "abatement" is always part and parcel of any climate change policy suite?
I’ll tell you why - because it shifts focus from production to consumption. I muddies the waters between cause and effect by trying to staple on some kind of notion of personal responsibility for carbon abatement. Add in a little pseudo-scientific economic reasoning that attempts to find a "natural" or equilibrium price and hey presto - we shift the focus. All of a sudden instead of focusing attention on producing energy in a sustainable manner (actually emitting carbon), we start talking about other people (always other people) consuming less (abating carbon).
For decades corporate lawyers have been manipulating the notion of personal responsibility (in just such a manner) in the interests of their clients. This little reality of society will not change with the adoption of an ETS. Therefore, Garnaut and his ilk are opening a veritable Pandora ’s Box of appeals and exemptions by tying their legislation to the notion of personal responsibility for carbon abatement instead of carbon emission.
But it doesn’t have to be this way. Global warming IS real and our activity IS the cause. Maybe, just for a moment, we should stop thinking about society and the market as some kind of Devine or providential mechanism for change. Maybe, just maybe, we are aiming to high when we expect the invisible hand to lead us to the Promised Land. Perhaps we should come down from the clouds and talk about real solutions to real problems.
Feed-in tariffs. Government investment in renewable energy sources. Regulation of efficiency standards on household appliances and vehicles. Invetsment in public transport.
Emissions trading is a dog. A silver bullet for the rich, disguised as silver buckshot.
Bob that is hitting the nail on the hard , I struggle to articulate this market based nonsense , my reaction to spending time at uni studying economics was that while it was a pleasant statistical abstraction of historic trends it has no relevance for the present.
I can see nothing simpler than setting an end date for coal fired power and then working the details from there , but there seems to be an abhorrence of direct action.
Things that would help :
replace the rail head to my little town that was ripped out years ago - then I could use a train to get down to family and ship goods into town , how good would that be no more dicing with wombats !
financial assistance for solar hot water , insulating the house etc.
As you said things I can take responsibiltiy for.
I agree with most of the comments above. Nick Stern, correctly in my opinion, found that at core the principles of "economic rationalism" were the cause of global warming. We now appear to see the same principles will be applied by the market to rescue us.
We enthusiastically embraced the so called free trade and the level playing field under Hawke, Keating and Howard governments and for our trouble we have dramatically reduced our manufacturing industries,the relative capacity of our infrastructure and continually increased our overseas debts.
I am wary of Garnaut’s trading system for carbon emissions ahead of everyone else. True, per capita we are up there with the worst of them and we should be setting an example, but if our experience of the level playing field is anything to go by, we need to be careful. I can see carbon banks arranging credits, loans, warrants, options, CFDs, futures, swaps, installments….etc, etc and making a lot of money for the usual suspects but i wonder about the reduction in emissions in Australia and the world-wide effect.
No one wants to talk about reducing the human population, i suspect because most economists/ bankers/ politicians can only see "prosperity" in terms of an increase in GDP related to an increasing demand fueled by an increasing population.
Please explain how any proposals can work unless there are fewer people?
Could someone please volunteer to have a chat on this subject to His Holiness while he is in town? Frank O.
Instead of supporting the $41 trillion Dollar World Wide Industry . Why not
invest $41 trillion dollars in R and D for clean world energy. Wouldnt
humanity find a solution quicker? Logic says yes.