Garnaut: sensible approach to national interest but ambition needs to be effective and robust Media Release

May 31, 2011 - 8:00am

The Climate Institute says Professor Garnaut’s final report today strikes a careful balance between the national interest and business calls for pollution protectionism but warns that governance arrangements must ensure national and international ambition is not stymied.

“Over recent months there’s been a constant chorus of industry calls for increased pollution protectionism,” said John Connor, CEO of The Climate Institute. “Professor Garnaut’s proposals for using the revenue generated from a pollution price on big emitters form a more sensible and balanced starting point for discussion.”

“With Australia’s pollution politics mired in half-truths and untruths, independent scrutiny of the levels of assistance to big polluters and the broader consequences of this to Australia overall will be crucial.”

“With the Budget showing Australia’s recent extreme weather events costing the economy $9 billion dollars, Professor Garnaut again reminds us that joining other nations to limit and price pollution is very much in the national interest,” said Mr Connor.

The report points out once again that other nations are moving to reduce their economic dependence on pollution.

“Professor Garnaut has pulled the rug, floorboards and foundations from the myth we are at risk of leading the world. He highlights the toxic impact that low Australian targets would have on global efforts.

“Garnaut suggests existing international action would see Australia taking on a minimum 10 per cent pollution target and argues we should have the flexibility to achieve our 25 per cent target by 2020.”

“Therefore any mechanism put in place must see pollution levels falling and be flexible enough to achieve at least the 25 per cent target. However, some of Professor Garnaut’s recommendations such as the early setting of the national target have the potential to stymie Australian and global ambition.”

“At the end of the day the real test for any agreed pollution package will be whether Australia’s pollution levels are falling and whether we are driving domestic transformation and investment in Australia’s world class, clean energy resources.”

“To ensure the pollution package delivers a switch to a cleaner, lower pollution Australian economy, a broad policy suite will be critical. This includes a National Energy Savings Initiative along with power sector generation and vehicle standards, in addition to a credible pollution price and the revenue options outlined by Professor Garnaut,” Mr Connor said.

See comments on key issues below and for more information contact: 
John Connor | CEO, The Climate Institute | 02 8239 6299
Giulia Baggio | Communications Director, The Climate Institute | 02 8239 6299

The Climate Institute comments on key issues: 

Targeted tax reform: Pollution pricing does offer the opportunity to deliver broader benefits to all Australians while unlocking investment in our world class clean energy resources. Analysis by CSIRO for the Garnaut report suggests pollution price revenues to fund targeted tax reform could allow Australia to achieve a 15 percent pollution reduction target for the same price as a 5 percent target. Care needs to be taken to ensure that these reforms still ensure low income groups remain well-assisted through the transition with direct payments and targeted energy efficiency support.

Industry assistance: Professor Garnaut’s suggestions that assistance should decline at 1.5 per cent per year, should continue to decline by default and levels of assistance open to independent review are sensible.

Clean energy, energy efficiency, international finance and land sector: Recommendations to scale up support for clean energy and help farmers reduce pollution are welcome.

Energy efficiency: The report is weak in its recommendations on measures to scale-up energy efficiency to manage energy bills and help households and business transition to a low pollution economy. This should include a commitment to a National Energy Savings Initiative to ensure energy companies have an obligation help households and businesses improve energy efficiency.

International finance: The Climate Institute welcomes Professor Garnaut’s acknowledgement of the importance of scaling up Australia’s investment in global efforts. The federal government should also look to sources outside the aid budget, such as revenue from the pollution price, phasing out fossil fuel subsidies and introducing a levy on international aviation and shipping.

Farm and land sector: Professor Garnaut has consistently highlighted an active, positive and rewarding role for landholders in reducing the risk of climate change to agriculture and the environment. The Climate Institute supports his call for the pollution price and the Carbon Farming Initiative to be linked, to drive demand for solutions on the land. Restricting land sector offsets may be premature at this stage. 

Independent authorities: Independent scrutiny will be critical to pull pollution policy out of the political quagmire. The Climate Institute is broadly supportive of Professor Garnaut’s proposals but extreme care needs to be exercised in ensuring that early setting of national targets does not limit Australia’s ability to do our fair share internationally. 

Pollution limit setting: While The Climate Institute does support setting the emissions trading cap in 2014 there are grave risks in locking in a weak national target at this time. (A cap under an emissions trading scheme and a national target are two different obligations. The cap is a national law and does not initially cover all sectors. The target is an international commitment and covers the whole economy.) Our national target should not be sent until the current round of international talks is completed and any pollution cap that is set initially should be declining, consistent with at least the full range of our national target range and set no longer than three years to ensure ongoing flexibility to meet the more ambitious targets that are ultimately in Australia’s national interest.

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