Saturday, July 05, 2008

How and why to read Garnaut

Professor Ross Garnaut has delivered a page-turner.

The draft Garnaut Report released yesterday is clear, evocative, sobering and persuasive.

But it isn’t fiction. It is all the more alarming because it was written by an economist – a man used to dealing in hard numbers. He has put into the report only the numbers he can verify – a central case around which irrigated agriculture in the Murray Darling Basin all but vanishes by the end of the century, in which an extra 4,000 Australians die heat-related deaths per year, in which more than 5 million Australians are exposed to the Dengue virus.

He half-jokes that climate change might not be so bad for some countries. Russia could probably do with a few more degrees of heat. But Australia, uniquely among industrial countries, is fully exposed.

The wonder and the tragedy is that the damage probably can be avoided.

Limiting worldwide greenhouse gas concenrations to 550 parts per million or 450 parts per million would see irrigated agriculture in the Murray Darling Basin fall by only 20 per cent or 6 per cent. The number of heat-related deaths would climb by fewer than 80 per year, and only some 720,000 Australians would be exposed to Dengue.

His concern is that although most of the world wants to limit the damage, it won’t manage to do it...

Every country has an incentive to sit back and wait for its neighbour to cut its emissions before it cuts its own.

He calls this the “the greatest market failure ever seen”.

As an economist familiar with game theory, he has proposed a way out - that Australia join with most of the rest of the developed world in agreeing to limited cuts in emissions (most probably 60 per cent, although this draft report doesn’t spell that out) while at the same time legislating our preparedness to impose really deep cuts (most probably 90 per cent) as soon as China and India cut their emissions too.

Professor Garnaut acknowledges that it’ll hurt. The tariff cuts he proposed as the economic advisor to Prime Minister Bob Hawke in the 1980s also hurt.

But in this draft report his able to argue for them cogently and clearly in his own voice.

The previous Prime Minister’s emissions trading report was prepared by a committee.

One of the best decisions Kevin Rudd made while in opposition was to commission just one person to examine climate change and to give him the time and space to report it as he saw it.