Prominent economist and former government adviser Ross Garnaut has publicly questioned the ability of the Abbott government’s Direct Action policy to reduce carbon emissions in line with the Kyoto Protocol.
Professor Garnaut, who has authored two climate change reviews, made the comment at a Sustainable Energy Association of Australia event today.
He is currently in town for the Perth Writers Festival, having recently written a book called Dog Days about the challenges for Australia after the boom.
In a wide-ranging speech, which included a potted history of other countries’ action on climate change to date, Professor Garnaut said the Abbott government should not just be planning for the mandated minimum of carbon emissions reductions of 5 per cent less than 2000 levels by 2020, but rather striving for between 15 and 25 per cent emissions in concert with other action by other countries.
Professor Garnaut said revoking a price on carbon would have widespread consequences, and that the carbon price had become a scapegoat in some cases.
“The treasurer said that the carbon price was the cause of Alcoa closing the Port Henry smelter; well actually, if you look at their account, Alcoa got more in (carbon pricing) compensation than it paid and made a profit out of the arrangement,” he said.
Professor Garnaut said the government’s proposed Direct Action plan, in particular its current lack of baseline emissions requirements, was too complicated to be an appropriate substitute for a price on carbon.
“(Under Direct Action) a company with a range of coal-based power generation could close one and receive compensation for it and if there were no controls on emissions elsewhere it could just raise production in others. There is no guarantee that will reduce total emissions whatsoever. So this is starting to be recognised, that you have to actually have baselines in every other business and penalties for breaching them,’’ he said.
“There’s no point in having a baseline if there’s no penalty for exceeding it. Once you follow through that logic you see that the alternative to uniform carbon pricing is not a free lunch for everyone and a bucket of money for those who happen to reduce emissions.”
Professor Garnaut said while the US and China had achieved significant emissions reductions under Direct Action style strategies of their own, those methods would be hard to replicate in Australia.
“In China they’re doing it through methods that we would find unacceptable. Regulatory measures of someone coming up to your plant and saying you were told six months ago you had to reach a standard, you haven’t, you’re in jail if this plant’s still operating tomorrow. That’s not the normal Australian way of working, I don’t think that would work out here,” he said.
“In the United States ... you’ve got the restrictions on the export of gas. We can get our emissions down a lot if we did the same thing with gas that they do, if we do the same things with limits on emissions on power generation, which effectively bans new coal plants.
“Our carbon pricing arrangement can give us a similar result with much less arbitrary and intrusive action and at a substantially lower economic cost.”
Professor Garnaut said he believed the looming Senate poll in Western Australia had turned Perth into the epicentre of the world on climate change policy.
Having recently returned from the UK and Europe, where he met with British climate change review author Nicholas Stern and German chancellor Angela Merkel’s climate adviser Hans Joachim Schellnhuber, Professor Garnaut said they were among a number of notable people overseas who were following the recently announced Western Australian Senate election very closely.
He said interested parties around the world were wondering whether the election would be an opportunity to change the balance of power in the Senate, thereby stymying the repeal of the carbon tax, which the Abbott government has vowed to do in July.