Heres another interesting analysis from The Age in Australia. wil
Dr. Wil Burns, Editor in Chief Journal of International Wildlife Law & Policy 1702 Arlington Blvd. El Cerrito, CA 94530 USA Ph: 650.281.9126 Fax: 708.776.8369 <mailto:[EMAIL PROTECTED]> [EMAIL PROTECTED] <http://www.jiwlp.com/> http://www.jiwlp.com ________________________ The global warming battle: united we stand, divided we fall The AGE Australia Tim Colebatch December 4, 2007 THEY call it the prisoner's dilemma. A group of you are captured, separated and individually interrogated. When your turn comes, you don't know what those interrogated before you have said. Do you confess, at the risk of giving away the evidence that could convict you? Or deny it, at the risk of increasing your penalty if others have confessed? You might wonder what this has to do with climate change, and the meeting under way in Bali to launch negotiations for a post-Kyoto agreement. Plenty, says Ross Garnaut, the man commissioned by Kevin Rudd and state governments to report on what should be Australia's policy on climate change. Twenty years ago, Garnaut was Rudd's boss. At 41, having invented the resources rent tax and been economic adviser to Bob Hawke, he was ambassador to China, while Rudd was his bright young Mandarin-speaking workaholic. They have kept in touch, and Garnaut, a man of sharp mind who was shunned by John Howard for his Labor ties, relishes being back in the policy arena. Last week he gave his first speech setting out his views on the issues (on the net at www.garnautreview.org.au). In short, his views are that: ¡öClimate change is "a worse and more urgent problem than we thought", requiring firm, quick action. ¡öThere are "diabolical" policy challenges in getting effective international agreement, partly because "the incentives are all wrong". ¡öThe world has the technological and economic ability to stop global warming. ¡öThere might never be one big international agreement, but a series of commitments. ¡öThe costs of action are relatively small. ¡öThe biggest challenge is to design an emissions trading system that cannot be captured by vested interests. To sum it up, Garnaut is confident we could solve the problems, at little cost ¡ª it "might mean that Australia's GDP would treble by 2051 rather than 2050" ¡ª but he is not confident that we will. Part of the reason is the prisoner's dilemma. Only China and the US, each producing roughly 20% of global greenhouse gas emissions, are big enough to get significant benefit from their own actions to reduce them. Even Australia ¡ª "one of three exceptionally large per capita emitters" ¡ª would benefit more from what others do than from what it does itself. Until we know if others are taking action, we can't know if it is in our interests to do the same. Yet we can't know what others will do. "The incentives facing individual delegations in such a negotiation are all wrong," Garnaut warns. Bali is only the beginning of the negotiation. The aim is to get an international agreement by the end of 2009. But Garnaut is sceptical, and warns that if it happens, "in the end, (the principles) will have to give much weight to equal per capita rights of emissions". That is the inconvenient truth that Howard and Rudd avoided in their election jousting. In 2004, the US and Australia pumped roughly 20 tonnes per head of carbon dioxide into the atmosphere. China produced only 3.6 tonnes per head, Indonesia (excluding forest fires) 1.4 tonnes, India one tonne and Bangladesh 270 kilograms. If we want an international agreement, that reality has to be at the centre of it. Garnaut is attracted to the "contraction and convergence" approach championed by German Chancellor Angela Merkel: developed countries should commit to contract their emissions rapidly, while developing countries would be given some "headroom for emissions growth", perhaps in the form of "challenging emissions intensity targets", such as pledging to keep emissions growth to less than half their growth in GDP. As their per capita emissions converge with those of low-emission Western countries (as in Europe or Japan), they too would then take on emission reduction targets. But be warned: even for China, that would be 20 years away. Garnaut's implied conclusion is that we should not wait for the world. He says we should move quickly to drive change and not coddle vested interests ¡ª because Australia, as a dry country with a fragile environment, stands to suffer more from climate change than any other developed country. His prime goal is to design an emissions trading scheme that cannot be rorted. He suggests it be run at arm's length from government, like the Reserve Bank. He opposes handing out free permits to pollute, arguing that since the carbon price is to be passed on to consumers, compensation is unnecessary and blunts the incentive to change. This will be a huge battleground ahead. Garnaut says industries such as aluminium, steel and cement, which have huge emissions and are exposed to trade, should be dealt with under a separate international agreement, rather than given free permits. Good idea, but until it happens, we need some other mechanisms, such as rebates of carbon prices for emission-intensive exports. Garnaut will not be the Government's only source of advice on climate change. The Howard government asked Treasury to prepare an assessment of the long-term costs and benefits to Australia, which is due to report in mid-year, roughly at the same time as his draft report. One suspects that he and Treasury will see eye to eye on the need for a scheme with integrity and bite. Their common enemy will be what Guy Pearse, in his classic account of Howard's climate change policy, High and Dry, calls "the greenhouse mafia": the miners and energy producers that have written Australian policy until now. It'll be a tough battle ahead. Tim Colebatch is economics editor.
