The Business Spectator has an interesting column from Alan Kohler on Garnaut's recommendations - I'm not sure whether to appalud it or just say "yikes" (I'm leaning towards the latter) - Garnaut the Magnificent.
Ross Garnaut’s latest instalment, 'Targets and Trajectories', is both deeply depressing and magnificent. ...
There is now a debate of whether these are “tough” enough targets, with everyone bringing prejudices and vested interests to the table.
I don’t know enough about whether 550 parts per million or 450ppm is necessary or achievable to join the debate, so I won’t.
But it seems obvious to me that any international target that rewards low or negative population growth – that is zero immigration and low birth rate – is not going to be helpful.
Each immigrant brings their carbon emissions with them. If the emissions targets of both the home and destination countries are not adjusted, then there will be no job for that person, since high-emissions industries will move to the country he or she came from because the cost of its carbon will be lower.
That is one key arbitrage that Ross Garnaut confronts and deals with; the other is generational.
His attempts to measure the immeasurable, as he puts it, and to weigh the cost of mitigation against the cost of global warming comprise about half the report, and are too complex to go into in much detail here.
In comparing utility across generations, Garnaut uses two discount rates – 1.4 per cent and 2.7 per cent – and two reductions targets, leading to 550ppm and 450ppm.
Using the standard Global Trade and Environment Model, he concludes that the net present cost to GDP of the combinations go like this: 1.4/550 – 2.6 per cent; 1.4/450 – 3.3 per cent; 2.7/550 – 2.4 per cent; 2.7/450 – 3.2 per cent.
And then he asks: “Is it worth paying over the course of the century less than 1 per cent of GNP for the non-market benefits, insurance value and the enhanced value beyond the 21st century of the 450 strategy?”
But actually it’s a pointless question because Australia alone can’t achieve 450ppm of CO2 in the atmosphere. Is the international community ready to commit to it? Not yet, says Garnaut.
And here’s the other problem that he does not mention – what I would call the alcopops factor.
The Rudd Government in April introduced a new tax on pre-mixed drinks to cut down on binge drinking. We’re waiting on figures yet, but it doesn’t seem to have worked even sightly: consumer are just paying more and filling Government coffers with more money.
Emissions trading, or other means of putting a price on carbon, won’t work either. Consumers will simply pay more for carbon-based products, they’ll shift expenditure around, there’ll be a recession, the Great Barrier Reef will still die and Bangladesh will still be inundated.
If any kind of serious carbon reduction target is to be achieved, it seems to me, emissions trading must be accompanied by mandatory renewable energy targets plus, more importantly, draconian energy efficiency laws.
Let’s assume Ross Garnaut and many others are right, and we have a global emergency with little chance of doing something about it through international agreement on emissions trading.
The only short-term solution that is remotely achievable therefore involves a sudden international regulatory clamp, in which freedoms are curtailed rather than prices (of carbon-related products) raised through market-based schemes.
Energy efficient buildings, lower consumption of meat, enforced carbon capture, mandatory household solar power.
That is the real Garnaut challenge.