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Friday 1 June 2007 (Updated Mon 30 July)

RAPID ROUNDUP

Prime Ministerial Task Group on Emissions Trading Report - Carbon trading experts respond

The Report by the Prime Ministerial Task Group on Emissions Trading has just been made public.

For a full copy of the report, click here.

The AusSMC is currently collating reaction from climate scientists and carbon trading experts on the report. As further comments are received they will be posted here.

Feel free to use these quotes in your stories. If you need assistance tracking down one of these experts, don’t hesitate to contact the AusSMC on 08 8207 7415 or email us.

Frank Muller is Professorial Visiting Fellow at the Institute of Environmental Studies, University of New South Wales. He is a policy expert with specific interests in greenhouse and sustainable development policy.

David Pearce is Director and Principal Policy Analyst at the Centre for International Economics (CIE) in Canberra.

Professor Warwick McKibbin is Executive Director of the Centre for Applied Macroeconomic Analysis (CAMA) at the Australian National University and Professorial Fellow at the Lowy Institue for International Policy.

Professor Barry Brook is Director of the Research Institute for Climate Change and Sustainability at the University of Adelaide.

Dr Steve Hatfield-Dodds, Policy economist and convenor, CSIRO Integration Network, CSIRO

Dr Ben McNeil is Senior Research Fellow at the University of New South Wales' Climate Change Research Centre

Frank Muller is Professorial Visiting Fellow at the Institute of Environmental Studies, University of New South Wales. He is a policy expert with specific interests in greenhouse and sustainable development policy.

“It is good news that the government appears finally to have accepted the need to establish firm legal caps for reducing Australia's greenhouse gas emissions. The task group's support for the cap & trade approach and for covering all energy-related emissions (including transport) is also welcome. However, the report fails to provide any real vision of a future, sustainable, low-emission Australian economy. Australia will continue to miss out on opportunities in global clean technology and carbon trading markets if emissions trading is delayed until 2012 (as proposed) and we fail to join the Kyoto system.

The proposed favourable treatment of energy-intensive industry (including new investment) may lock us into a pattern of economic development that proves costly in the long run. And the generous treatment proposed for electricity generators that have known for more than a decade that a carbon price is coming will be at the expense of household and business consumers. And while the task group talks about not ‘picking winners’, its proposals, together with other government policies, suggests a deliberate strategy of picking coal, nuclear and energy-intensive industry over energy efficiency, renewables and other low emission activities.”

David Pearce is Director and Principal Policy Analyst at the Centre for International Economics (CIE) in Canberra.

"The TGET report provides a good summary of the issues facing Australia as we all consider the future of greenhouse policy. The coverage is generally well balanced and the inevitable trade-offs involved in policy of this kind are well covered. While its rejection of the Kyoto Protocol as a basis of future international action will generate much controversy, the arguments are well put and sound, and the report certainly does not ignore the international dimension to climate change policies. Neither does the report ignore Australia’s responsibilities for abatement. It calls for a comprehensive policy of pricing carbon (through a hybrid emissions trading scheme) to ensure efficient abatement throughout the economy.

While there are many details to iron out, and while it will take some time to get past the politics to understand how such a scheme will work in practice, the comprehensive approach is to be welcomed. The report rejects ‘picking winners’, which would indeed be bad policy, but recognizes the importance of a uniform and transparent price signal in encouraging abatement wherever it can occur. If the government can now develop this into a concrete policy without creating scope for rent seeking and without indulging in political point scoring, that will be to the benefit of all Australians."

Professor Warwick McKibbin is Executive Director of the Centre for Applied Macroeconomic Analysis (CAMA) at the Australian National University and Professorial Fellow at the Lowy Institue for International Policy.

“This is an excellent report that lays out a sensible approach to climate policy for Australia - indeed for the world community. It moves away from the Kyoto short term targets and timetables at any cost approach, to a clear policy of setting long term goals and long term markets to price these goals. The long term prices will drive technological innovation while the short term carbon prices will be capped to minimise the cost.

It draws heavily on the McKibbin-Wilcoxen Blueprint approach with some differences in the precise mechanisms of implementation. Although I have some difference of opinion on the alternative ways of implementing the policy, these criticisms are minor relative to the importance of establishing the philosophical approach clearly laid out in the report. I hope this will be seen as the model to move the global community forward on sensible climate policy, beyond the Kyoto Protocol.”

Professor Barry Brook is Director of the Research Institute for Climate Change and Sustainability at the University of Adelaide.

"The report represents a positive step in the right direction, and its proposals are a sensible (albeit cautious) first step for Australia. Given the urgency of the emissions problem, I would have preferred a shorter time frame for implementation of the trading scheme. But a 2012 date will at least provide a healthy lead time to prepare for enforced measures. If they are sensible, industry and business will use this gap to implement short-term adaptive emission trading trials, such that they hit the ground running when the legislation comes into force."

Dr Steve Hatfield-Dodds, Policy economist and convenor, CSIRO Integration Network, CSIRO

“The Task Group report represents an important watershed in Australian climate policy, particularly the conclusion that ‘timely and decisive action is warranted’ to establish a national emissions trading scheme and begin taking steps to reduce our emissions.

Designing and implementing emissions trading will be complex, and it is important to invest the time and effort required to get it right. But we should also recognise that delaying global emissions reductions risks more rapid climate change and more severe long run impacts. A balance needs to be struck.”

Dr Ben McNeil is Senior Research Fellow at the University of New South Wales' Climate Change Research Centre

"The taskforce recommends the Australian government to set a post-2012 target for reducing greenhouse gas emissions, which is critical for the effectiveness of a carbon emissions trading scheme. The government set target is therefore the primary determining factor in how effective the scheme will be. If the government target is too weak then a carbon emissions trading scheme will be a wasted exercise in significantly reducing greenhouse gas emissions for the medium to long term."