The taskforce, chaired by the head of the Prime Minister’s Department Dr Peter Shergold says while the government is broadly on track to meet its Kyoto Protocol target of cutting emissions to 108 per cent of 1990 levels by 2012 the goal is not easy and there is no room for complacency.
It says without further action Australia’s greenhouse gas emissions will balloon out to 127 per cent of 1990 levels by 2020.
The taskforce issues paper released yesterday says that cuts in emissions of the order required “will inevitably impose costs on industry and the community”.
“It is perhaps not generally understood that the measures introduced to date by the Commonwealth and state/territory governments are already imposing a net carbon cost on the Australian economy,” it says...
Those measures include grants to fund the development of so-called clean coal and renewable alternatives and also regulations requiring electricity generators to source energy from renewable sources.
The report concludes that some of these policies “provide only modest abatement at relatively significant cost”. It says the “multiplicity of programmes between jurisdictions, including the significant degree of overlap, has been raised as a key cost and compliance issue for business and the economy.”
The report proposes replacing some of the existing measures with a national emission trading scheme. It says market-based approaches such as trading schemes “generally reduce emissions at a lower cost than other interventions”.
Welcoming the report last night one of Australia’s leading climate change modelers, Professor Warwick McKibbin from the ANU said it ranged “much more widely than the initial terms of reference suggested it would.
The terms of reference required the taskforce to advise on the nature and design of a workable global emissions trading system in which Australia could take part.
The Taskforce has broadened its investigation to consider “the pros and cons of Australia adopting a domestic emissions trading scheme in the absence of a universal, fully-developed international scheme.”
It says an early adoption of emissions trading by Australia ahead of most of the rest of the world could promote investment and the development of future competitive advantages for Australia.
The Industry Minister Ian Macfarlane who as recently as last month said emissions trading would have to be done globally so as not to damage Australia's competitiveness said yesterday he would be prepared to consider a domestic emissions trading scheme with an open mind given that there was unlikely to be a global trading scheme in the near future.
The Prime Minister John Howard said he too would be prepared to consider a domestic trading scheme on the proviso that it did not damage Australia’s international competitiveness. “We are not going to sacrifice the jobs of coalminers in pursuit of some kind of knee-jerk reaction,” he told Parliament.
The Opposition Leader Kevin Rudd asked why the Prime Minister appeared to have suddenly become interested in carbon trading when he had rejected four previous reports recommending it. “Did the Prime Minister receive government reports on emissions trading in March 1999, June 1999, October 1999 and December 1999? Did the government say no to each of these reports and then disband the emissions trading team in the Australian Greenhouse Office?” Mr Rudd asked.
Mr Howard replied that he thought then that it was better to specify mandatory renewable energy targets and invest in low emission technologies as a means of maintaining jobs in the coal industry.
The taskforce has asked for comments on its issues paper by March 7. It will report to the Prime Minister on May 31.
