Government Advisor on Mitigating the Effects of Climate Change Economist Ross Garnaut Speaks Out. (March 28, 2008)

 Economist Ross Garnaut, having been tapped by Prime Minister Kevin Rudd to advise the government on what to do for and with the problems engendered by climate change (read global warming) after telling his audience in his postprandial speech at the Australian-Melbourne Institute economic and social conference:

"...it is a comfort for an economist seeking to come to grips with the science of climate change, to realise that there is another profession for which forecasting is at once as important, and as pregnant with error arising out of uncertainty, as one’s own."

He went on to say:

"I have two things to say to the sceptics [as regards climate change]. The first was said in my February Interim Report. There are large uncertainties surrounding the science of climate change. Those of us who are not climate scientists must weigh intelligently reputed scientific opinion. The weight of scientific opinion advises, on a balance of probabilities, that, in the absence of effective mitigating policy, we face high risks of dangerous climate change. In the absence of mitigating policy action, we face risks of a dimension that we would pay large sums to reduce in other parts of our lives.

    "The second thing that I would say to the sceptics is that I hope that they are right. What a relief, if unexpected developments in the science were to tell us that it was all a big mistake. It would be wonderful to be told with the authority of mainstream science that the beneficent processes of modern economic development could continue without any abatement of patterns of energy or land use... [However,] on the evidence of contemporary mainstream science, it may also need to be miraculous....

    "My Final Report at the end of September will ask and start to answer the hard questions about the indirect but potentially powerful effects on Australia, of the impacts of climate change on our Asian and Pacific neighbours... The Final Report will apply the mainstream science to an understanding of these issues on a regional basis... an effective global mitigation effort requires all developed countries, Australia amongst them, to take steps now to secure large reductions in emissions."

Professor Garnaut foresees a battle of economic reformers, who rely upon transparency and competition, vs the old Australian impulse to political fixes. He chastised the detractors of his proposal of an emissions trading scheme [ETS], and was particularly scathing of those who want emissions permits issued for free: "That approach would have government deciding which firms and which activities should be given permits to emit greenhouse gases... If this course were to be followed, managers would find it more rewarding to put pressure on government to secure emissions rights than to find and to apply low-emissions ways of going about their business. We wouldn't find enough new ways to reduce emissions at low cost."

While Professor Garnaut acknowledged that: "the rich possibilities for corruption of an ETS" might favour the more transparent direct carbon tax as "much less amenable to manipulation by private interests", he believed that properly implemented, it would minimise the costs of reducing greenhouse gas emissions.

He also warned his audience to be wary of approaches which choose to ignore the full extent of the problem and which would lead to the nation's long term detriment.

And he believes: "Well-designed markets can unleash the ingenuity of Australians in reducing emissions at minimum cost to the standard of living... There are [,however,] two things that could go wrong. We could dissipate resources in seeking to influence discretionary government decisions rather than get on with the job of efficiently reducing emissions. And if we get this wrong, then the resulting instability can itself require costly economic policy resources.

    "I will conclude by drawing attention to a more sombre part of the climate change story. We as a global community have come to climate change mitigation too late. The warming that has already occurred, together with that which will flow inevitability from emissions already in the atmosphere, and from the current momentum in emissions growth, mean that, in the best of circumstances, we will have to live with substantial climate change. Australia is perhaps the most vulnerable of developed countries, both because of direct impacts, and because we will be affected more than other developed countries by stress in neighbouring countries."