Top Stories

1 . Garnaut's target so low, the sea level will rise above it in a year
Canberra correspondent Bernard Keane writes:

Driven by the remorseless logic of what is achievable internationally
and that it is too late to avoid substantial impacts on Australia from
climate change, the Garnaut Review today recommended a low emissions
reduction target -- one that is heavily dependent on an international
agreement to achieve a dangerously high level of atmospheric carbon.

Declaring that Australia should establish its emissions reduction
framework on an atmospheric carbon level of between 450-550 ppm,
Professor Garnaut recommended a set of moderate options likely to have
minimal impacts on the Australian economy in the event no
international agreement can be reached next year on what will follow
the Kyoto Agreement.

An initial fixed carbon price. Garnaut wants an emissions trading
scheme to kick off in 2010 with a carbon price of $20 per tonne,
rising each year by 4% plus CPI.

From 2013, the role of an international agreement becomes crucial.
Garnaut recommends that Australia advocate, and be willing to sign up
to, an international agreement based on stabilising atmospheric carbon
levels at 450ppm.

However in Garnaut's view, an international agreement on 450ppm isn't
going to happen -- one at 550ppm is more likely, and probably the
first step toward, eventually, 450ppm. Under such an agreement,
Australia would aim to reduce its emissions by 10% on 2000 levels by
2020, and 80% by 2050. 450ppm would require a 25% reduction by 2020.

In the absence of any international agreement of any kind -- which
Garnaut described as "not a good world to be in" -- he recommends
aiming for a 5% reduction by 2020.

A "waiting game" option, the lowest of the lot, would simply keep the
2012 carbon price, inflated by 4% plus CPI.

The costs of these options is shown here (LINK ) and demonstrates the
importance of an international agreement. Notice the carbon price
under the 5% option, in the event there's no international agreement
-- $52.60 a tonne in 2020.

But the cost of carbon under the 10% option if there's an
international agreement is far lower -- $34.50 -- because even though
there's fewer permits available, there's also the opportunity for
Australian businesses to trade permits internationally.

In fact, the 450ppm option under an international agreement (25%
reduction) is not significantly more expensive than a 5% reduction.

As we discussed earlier this week (Crikey, Wednesday, item 1 "Garnaut
target falls desperately short") and as Garnaut himself readily
acknowledged today, even the 550ppm target countenances the
destruction of the Great Barrier Reef and other iconic features of the
Australian environment.

Even 450ppm would see significant wildlife extinction levels. Garnaut
indicated that he thought there was a case for 400ppm, but that it was
simply impractical internationally. His final report at the end of the
month will contain several chapters on adaptation, because in his view
Australia is too late to avoid "substantial impacts" which will, as he
said in his dry economist's tone, require "major adaptation."

Garnaut had discussed his targets with Nicholas Stern, he told this
morning's briefing. Stern had indicated he thought the targets were
appropriate for Australia, and that we're crucial in forging an
international agreement given most of the biggest emitters -- China,
India, Indonesia -- will be in our region.

You can bet Kevin Rudd will thinks the targets are appropriate too.
They're so low that even Rudd and Penny Wong will find it difficult to
undercut them. And they should also leave the Opposition without much
room to go backward -- this is more or less the Greg Hunt-Malcolm
Turnbull position converted into numbers.

It's all, to be blunt, profoundly depressing stuff.

Garnaut has explained with logic and clarity why we're in serious
trouble on climate change and unlikely to get out of it, even if a
reasonable international agreement is forged.

The only small positive comes in the GDP figures in the costs table.
Have a look at the comparative GDP impacts of the 5% option -- where
we go it alone -- and the 25% option, under an international agreement
-- it would only cost us an additional 0.3% of GDP to aim higher, in
the event some sort of international agreement is struck. Addressing
climate change, Garnaut says, costs about 0.1% of GDP p.a., until we
reach a tipping point in the future where the damage from climate
change outweighs the costs to GDP of a carbon price.

If Copenhagen or subsequent meetings manage to produce an agreement,
even around a dud figure like 550ppm, there's a strong case for
Australia to aim itself for 450 and even 400, given the overall cost
impact will, over the course of a decade, be barely noticeable.