Friday, June 01, 2007

The Emissions Trading Report is out!!!

It is up the Prime Minister's emissions trading website here.

The first story we wrote for the Canberra Times is below the fold.

By Andrew Fraser
and Peter Martin

The Federal Government is set to adopt a plan for a carbon-emissions
trading system that its proponents believe is bolder and more far-reaching than any similar system in the world.

The much-anticipated report of the Task Group on Emissions Trading,
chaired by the Secretary of the Department of Prime Minister and Cabinet, Peter Shergold, recommends immediate action to allow a trading scheme to operate in three and a half years.

The report does not propose either a target for greenhouse-gas reductions or a price for carbon. Instead it says the Government should set an “aspirational goal’’ for long-term emission reduction, bolstered by specific short-term (10-year) annual targets and medium-term (10- to 20-year) “gateways’’, specifying a range of acceptable emission reductions. The various categories of targets would be reviewed every five years.

Most prices would be set by the market.

The task group, which had a preponderance of economists and business
members, rather than scientists, was described by Dr Shergold as coming up with an “eyes-wide-open report’’.

An economic modeler whose ideas have guided its deliberations Professor Warwick McKibbin of the ANU said yesterday he expected the Australian system to become a model for other countries once the Kyoto agreement expired in 2012.

“I know for a fact that the US is interested, I know that the Chinese and the Indians are interested. I know the Japanese and the Canadians and the New Zealanders are interested, and the Brazilians, because they have been talking to me about this for years,” he said.

“We just needed the opportunity to show that Kyoto wasn’t going to work, and we have reached that point. It looks as if the Australian government now has the courage to put forward an alternative.”

But Professor McKibbin said the scheme could be adopted much earlier than the 2011 start date proposed in the report.

“It is actually not that hard. A lot of the work has already been done. It could start in 2009 or even late in 2008. it looks as if the taskforce chose 2011 to position Australia’s system as being a model for a post-Kyoto world,” he said.

The Climate Institute, made up of climate and economic modelers, also called on the government not to wait.

“Climate change isn’t waiting, why should we? We need measures which turn Australia’s rising greenhouse pollution around from 2010 and set our economy up for the clean energy global economy of the 21st century,” its chief executive, John Connor said.

The institute had released economic modelling earlier this week showing that delays now would lead to further economic shocks and higher electricity prices in the future.

Business groups, among them the Australian Industry Group, the Australian Chamber of Commerce and Industry, the Institute of Petroleum, the Pipeline Industry Association, and the Ministerial Council of Australia responded positively.

Heather Ridout of the Australian Industry Group warned that many of its members – some 85 per cent – had told it they had little understanding
of the complexities of emissions trading schemes.

"The lead time suggested by the Task Group will provide the scope to
build community and business understanding of the proposed measures and to ameliorate the impact of the cost,” she said.

The task group concedes that its recommendations will impose costs on economic growth and on business and households, but says the consequences of inaction ware potentially larger.

Prime Minister John Howard is yet to state a formal view on the task
group’s report, but has speeches scheduled to the Liberal Federal Council today and tomorrow.

"The decisions taken about climate change will be the most critical and
far-reaching economic decision this country will take in a decade," he

If not taken “by people who are experienced at running the economy’’, future generations could pay “very dearly."

The task-group report backs up government announcements on climate change, particularly the avoidance of commitment to specific short-term reduction targets, as Labor’s climate spokesman, Peter Garrett, has done with his pledge to reduce emissions by 20 per cent from 1990 levels by 2020. The task group found that the real cost of that promise by 2020 would be a 38 per cent reduction, or 264 million tonnes, the equivalent of the production of all Australia’s fossil-fuel power stations and the national car fleet.

In a speech to be delivered to the annual conference of the Western Australian branch of the ALP today the national leader Kevin Rudd will identify the core failure of the report as being its lack of a specific long term emission reductions target.

“For the past 11 years, we have been waiting for the Howard Government to set a long term emissions target for this country. Today, the wait continues. By contrast, Labor’s target is clear cut,” he will say.

“We are committed to cut Australia’s greenhouse gas emissions by 60 per cent on 2000 levels by 2050.”

The report recommends that Australia adopt a “long term aspirational goal” rather than a hard target for cutting carbon emissions, but leaves the setting of that goal up to a committee to be appointed by Prime Minister.

The taskforce recommends that the committee report within one year.