Apr 30, 2009 - 2:42pm
The Coalition’s calls for excessive compensation for big polluters is not supported by the Centre for International Economics (CIE) report released today and appears to profoundly misunderstand the economic impacts of delaying action, said the independent Climate Institute today.
“We welcome the calls by the Coalition for more action on building efficiency and land management, and their focus on stronger emission reduction targets but this report is a “wobbly crutch” and does not provide support for delaying action or for 100% compensation for big polluters,” said John Connor, Climate Institute CEO.
“All parties need to realise that around the world the low carbon economic train is leaving the station. Delaying action and providing undue support for big polluters will strand us in a carbon ghetto and undermine investment in clean energy and other low carbon jobs and industries.”
“The CIE report appears to misunderstand or misrepresent the science by saying ‘mitigation actions today will not have any impact on the climate for at least the next 50 years’.
“What the world does now will have a profound impact on the damage climate change causes, the ability to achieve reductions in carbon pollution in the atmosphere and the kind of economic shift needed. Delay will increase the economic hardship across all fronts.
“The CIE report provides little basis for the Coalition’s call for 100% free permits for trade exposed industries. Indeed it would seem to back Professor Garnaut’s approach which would reduce support currently under offer from the Government.”
The CIE report highlights the risks associated with compensation measures: ‘…compensation measures will not in themselves lower the marginal cost of abatement. Indeed, to the extent to which they result in different costs of abatement on different groups, they may in fact increase the economy wide cost of abatement’ (p. 42). Like Professor Garnaut, the paper goes on to call for the government to “anchor compensation on a sound conceptual basis.”
Professor Garnaut’s approach would result in less than 30% of permit revenue flowing to EITEIs (p.349 of Garnaut final report), the White Paper starts at 35% with an expectation of growth.
“It’s time to get on with the job of shifting our polluting and inefficient economy to ensure we prosper in the growing global low carbon economy, concluded Mr Connor.