the garnaut reviews, 2008, 2011 [1]
The Garnaut Reviews, 2008, 2011, led by senior economist Ross Garnaut still constitute a decade later the most comprehensive assessment of Australia’s options for climate change action. The review drew on leading Australian research on bushfire impacts to forecast an increase in bushfire danger by 2020, and that has sadly now come to pass. On our current trajectory, we are on track to see catastrophic fire days increase by 300 per cent by the second half of this century.
The Review, still relevant a decade later, outlines various types of policy that can help cut emissions, both "carrots" and "sticks". These include:
- public subsidies, such as government funding for wind and solar farms; or special tariffs to pay householders with solar panels.
- systems for making polluters pay, such as a carbon price implemented through a carbon tax or an emissions trading scheme.
- policies that rely on regulating an industry, such as the now-abandoned National Energy Guarantee policy, under which companies would be required by law to use a mix of different technologies.
- a carbon price coupled with an emissions trading scheme and a cap on greenhouse gas emissions as the most effective and efficient way of cutting emissions.
The Cost Climate action would be expensive, though not as expensive as some claim. "The overall cost to the Australian economy from tackling climate change is manageable and in the order of one to two-thirds of 1 per cent of annual economic growth," the Garnaut Review concluded.
The underlying message of modelling is that the more action we take earlier, the more costs can be avoided a few years down the track.
The consequences of inaction:
"Without mitigation, the Garnaut Review found, "the best estimate for the Murray-Darling Basin is that by mid-century it would lose half of its annual irrigated agricultural output” and "by the end of the century, it would no longer be a home to agriculture." Since then, the temperature rises driven by rising emissions have been causing impacts that are tracking at the more dangerous end of scientists’ forecasts. And even if we do everything we can to cut emissions, the Great Barrier Reef will be dead, or close to dead, if temperature rises reach 2 degrees above pre-industrial levels. Such a path may become inevitable by 2030.
Garnaut amends his narrative in 2019 to take into account the prevailing political realities [2]
In his book SuperPower: Australia’s Low Carbon Opportunity, published after the Morrison Government’s electoral victory in May 2019, in recognition of the fact that the new government
- would not introduce carbon pricing,
- would not do anything that might tend to increase electricity prices,
- would not take any steps that would lead directly to the diminution of the coal industry,
- Australian emissions would fall by 50 per cent on 2005 levels by 2030, and
- increase the contribution of renewable energy to half or more of our electricity use.
The measures proposed are:
- To expand the role of the Australian Renewable Energy Agency to support innovation across the range of low-emissions technologies.
- To similarly expand the role of the Clean Energy Corporation to underwrite the supply of new power to major users
- To reward private investors in new unregulated transmission for their contributions to low prices, security and reliability in the regulated system.
- To take measures to enhance electricity reliability.
- To provide public electric vehicle charging facilities.
- To reform electricity pricing rules to ensure that the electric car reduced the cost of electricity in other uses.
- To reduce “fugitive emissions”, that is the unconstrained release of methane and carbon dioxide from coal mines and gas processing.
- To offset those remaining by purchasing credits from the Australian farm sector.
- These offsets would provide a major boost for sequestration of carbon in Australian soils, pastures, woodlands, forests and plantations.
These steps, Garnaut said, would reveal large economic gains from reducing emissions. Key to achieving these objectives was the transition to renewable forms of energy, of which he says Australia has by far the richest endowment per person. In the meantime, the cost of renewable energy and electricity storage had also fallen far more rapidly than as anticipated in his 2008 and 2011 reviews.
In other words,[3] Garnaut perceived a golden opportunity for us to shift from a coal industry in terminal decline to a new set of industries with bright prospects in the low-carbon world that’s coming. He foresaw that, if we rise to the challenge of climate change, we "will emerge as a global superpower in energy, low-carbon industry and absorption of carbon in the landscape".
Specifically:
- rather than sending our minerals off for further processing abroad, we should do it ourselves, and
- the bush would be the recipient of a whole new source of income and activity, and all the new industries created by the world’s move to renewable energy being located in the regions.
Cost aspects
The move to renewable energy wouldn't cost a lot, and low-carbon electricity would be cheaper and give us major new export opportunities. Moreover, these more positive benefits would come earlier than the benefits of lesser climate change, and the cost of moving to all-renewable electricity had been transformed by two things:
- the huge reduction in the cost of solar panels and lesser falls in the cost of wind turbines and batteries.
- second, by the fall in global interest rates to record lows, which seemed likely to persist:
Whereas much of the cost of coal-fired electricity comes from the cost of the coal, with solar and wind power almost all of the cost came from setting up the system – sun and air are free. Lower interest rates also meant that the capital cost was much reduced.
Past and future
To that point, a chunk of Australia’s prosperity derived from our huge natural endowment of coal and gas, but Garnaut's realisation was that, relative to the size of our population, Australia was more richly endowed with sun and wind than any other developed country – or our Asian neighbours. So zero-emissions electricity would actually be cheaper to produce. More significantly, our carbon-free power would be much cheaper than other countries’. But, to maximise our chances of benefiting from the move to a low-carbon world, we had to get to zero net emissions sooner than the other rich countries, not later.
Garnaut concluded:
“We need not be discouraged by (Morrison’s) statements that this will be done without introducing a carbon price, or raising the price of electricity, or destroying Australian jobs. I accepted these constraints in designing the bridge. Within these constraints, we can move as fast over the next decade as the Paris temperature goal requires. Do it right, and faster progress on renewables and carbon farming and the electric car will make us more prosperous. That will change the political environment in which we can complete the journey across the chasm, to a place where Australia is an economic superpower of the zero emissions world economy”.
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It is indeed regrettable that the fruits of Garnaut's labour and insight have not been harvested but rather left to wither on the political vine.
[1] This is an edited version of an article in the Explainer section of the Sydney Morning Herald on 16 January 2020, as https://www.smh.com.au/national/what-is-real-action-on-climate-change-20200115-p53rok.htm
[2] This is an an edited version of an article appearing in the Sydney Morning Herald under Garnaut's hand on 18 January 2019, accessible at https://www.smh.com.au/environment/climate-change/after-the-smoke-clears-a-path-to-zero-emissions-20200117-p53s9w.html
[3] This is an edited version of an article in the Sydney Morning Herald written by Ross Gittins on 29 January 2020, accessible at https://www.smh.com.au/business/the-economy/zero-net-carbon-choice-do-we-want-to-be-losers-or-winners-20200128-p53vc6.html