Garnaut Climate Change Review
Garnaut Climate Change Review- Supplementary Draft Report Targets and Trajectories
Today Professor Ross Garnaut released the Supplementary Draft Report Targets and Trajectories as part of the Garnaut Climate Change Review.
In his address to the National Press Club, Professor Garnaut argued that despite the uncertainty of the science of climate change and the costs of mitigation, it is essential that Australia establish a carbon emissions trading scheme to avoid dangerous climate change and ‘buy some time’ for further research and technological advances.
According to Professor Garnaut, it is important that the policy framework:
- Is broad enough to reduce carbon emissions to a level to avoid dangerous climate change.
- Is large enough to keep open better options for avoiding high risks.
- Is designed well enough to achieve its limited goals at low cost.
- Builds confidence that international cooperation is possible in this difficult area.
- Encourages and allows time for the accumulation of the knowledge to reduce uncertainty about the science and about the costs of mitigation.
The Report links the central recommendation on targets and trajectories to comprehensive global agreement because:
- International agreement is urgent and essential.
- Agreement is possible if Australia and other countries attach enough importance to it.
- It sees this as the only way to completely remove the political economy risks to Australia and the global trading system of payments to trade-exposed, emissions-intensive industries and.
- The lower Australian mitigation costs with which it is associated allow more ambitious reductions in emissions.
The Report outlines two key strategies. The first is for the ‘transition period’ until the Kyoto Agreement expires in 2012; the second is for the post-Kyoto period.
Transition Period- Fixed Price Emissions Trading Scheme
The Kyoto Agreement ends in 2012, and Australia is set to meet its commitments comfortably.
Professor Garnaut explained that the period to 2012 should be considered a transition period, in which the emissions trading scheme is established. Professor Garnaut argues that during this transition period, permits should be sold by the independent regulatory authority at a fixed price of $20 per tonne in 2010, rising each year by 4 per cent plus the percentage increase of the consumer price index. This price is modelled on a global agreement directed towards stabilisation of global greenhouse gas concentrations at 550ppm. According to Professor Garnaut, this system would avoid any unproductive interaction between the early period of a new trading scheme and global negotiations and would provide a less anxious environment for implementing the globally efficient approach to assistance to trade exposed industries.
Post-Kyoto
According to Professor Garnaut, Australia’s target should be to reduce emission net of international trading by 10% from 2000 levels by 2020 (30% per capita), and 80% by 2050 (90% per capita). This is a reduction of 17% from the levels that are expected in 2012, at the end of the Kyoto period. A binding international commitment to the 2020 outcome could be made within the context of, and conditional on, an effective global agreement that is designed to stabilise global concentrations of greenhouse gases.
The Review considered two global mitigation scenarios contingent on a binding international agreement:
The 550ppm scenario –the world stabilises the concentration of greenhouse gases in the atmosphere at 550 parts per million (ppm). Permits will no longer be sold by the authority at fixed prices, but will rather reflect the price of carbon in the global market.
The 450ppm scenario – the world stabilises the concentration of greenhouse gases in the atmosphere at 450ppm. The Review concluded that the global goal of 450ppm is not possible at this time unless international developments change significantly.
In the unlikely event that the Copenhagen negotiations fail and a comprehensive agreement on global emissions is not reached, Professor Garnaut argues that Australia should maintain an emissions trading scheme, but continue with the fixed price of the transitional period, until an international agreement is concluded or 2020.
Professor Garnaut stressed that there would be no progress towards an effective international agreement if each country argued for softer emissions targets. He explained that focussing on per-capita allocations is a legitimate and promotes the acceptance of long-term allocation rules built around eventual convergence across all countries.
“The proposed targets for Australia have been selected because they involve comparable abatement effort to other developed and developing countries, calculated within an internally consistent framework compatible with global agreement around specified emissions concentrations objectives.”
The full Supplementary Draft Report Targets and Trajectories is available here.