Freehills has previously reported on the release of Professor Garnaut’s Draft Report1 on 4 July 2008 and on his supplement to the Draft Report, Targets and Trajectories.2
On 30 September 2008, the Garnaut Climate Change Review issued its Final Report (report). The report is consistent in its analysis and recommendations with the Draft Report and its supplement but contains the results of detailed econometric modelling.
In particular, the report states that while the scientific judgments of the Intergovernmental Panel on Climate Change (IPCC) should be accepted on a balance of probabilities, the IPCC’s economic analyses, based as they are on work done during the 1990s, ‘have been overtaken by events’ (particularly in China) and as a result ‘systematically underestimate the current and projected growth of emissions’. For example, the central range for temperature increases in the 21st century under ‘business as usual’ should be revised upwards from between 1.8°C and 4°C to 5°C. Consequences would include a threat of extinction to 88 per cent of species, destruction of the Great Barrier Reef by mid-century, and inundation by seawater of the Kakadu wetland system by the end of the century.
Three climate change senarios
The report provides detailed modelling and analysis of three principal climate change scenarios.
No-mitigation scenario
In this scenario, the world does not attempt to reduce its greenhouse-gas emissions. Modelled consequences include a best-estimate increase in global temperature relative to 1990 levels of 5.1°C by 2100 and 8.3°C by 2200, with impacts on human civilisation and most ecosystems that are ‘likely to be catastrophic’.
550 scenario
Emissions are stabilised at approximately 550 parts per million of carbon-dioxide equivalent (550 ppm CO2e) by approximately 2060. Modelled consequences include a best-estimate increase in global temperature relative to 1990 levels of 2.0°C by 2100 and 2.2°C by 2200.
450 scenario
Emissions are stabilised at approximately 450 ppm CO2e early in the 22nd century. Modelled consequences include a best-estimate increase in global temperature relative to 1990 levels of 1.5°C by 2100 and 1.1°C by 2200.
Recommendations
Against this modelling, Professor Garnaut emphasises his conviction that ‘Australia’s mitigation effort is our contribution to keeping alive the possibility of an effective global agreement on mitigation’. Accordingly, the report recommends that Australia make a public commitment to a range of emissions reductions targets which are keyed to the achievement of an ‘effective global agreement’ which would see ‘all developed and high-income countries, and China’ subject to ‘binding emissions limits from the beginning of the new commitment period in 2013’. That is, Australia should commit itself to ‘conditional targets’ which are dependent on the achievement of such an agreement.
Those public commitments should be as follows:
- if such an ‘effective global agreement’ is in place and aims to achieve the 450 scenario—a reduction of 25 per cent of 2000 levels by 2020, and 90 per cent of 2000 levels by 2050
- if such an ‘effective global agreement’ is in place and aims to achieve the 550 scenario—reductions of 10 per cent of 2000 levels by 2020, and 80 per cent of 2000 levels by 2050, and
- if no such ‘effective global agreement’ is in place but there is a binding agreement between developed nations only (as is effectively the case with the Kyoto Protocol)—a reduction of 5 per cent of 2000 levels by 2020.
Professor Garnaut sees the 450 scenario as the most desirable, but believes that international agreement to implement it is unlikely to be achieved within the next few years given current political realities. Accordingly, the principal emphasis should be on achieving an ‘effective global agreement’ for the ‘feasible’ 550 scenario.
As in his previous reports, Professor Garnaut recommends that the period from 2010 to the end of 2012 should be seen as essentially a transitional one during which the key task internationally and for Australia will be the forging of an agreement for the post–2012 period. During this transitional period:
- Australia’s target should be to achieve its Kyoto Protocol commitment to restrict emissions to 108 per cent of 1990 levels on average over the period from 2008 to 2012, and
- emissions permits under the proposed Australian emissions trading scheme should be sold at a fixed price of $20 per tonne of CO2e in 2010 rising by 4 per cent + CPI annually.
In the absence of any relevant international agreement post–2012 (not even one which binds only the developed countries), Professor Garnaut recommends extending the arrangements for the transitional period (that is, selling permits at a rising fixed price) until the earlier of the achievement of an international agreement or 2020.
The report also makes a number of detailed recommendations on the shape of the proposed Australian emissions trading scheme, compensatory mechanisms addressed particularly to low-income households, the treatment of emissions-intensive trade-exposed industries, and complementary measures such as the Mandatory Renewable Energy Target and the Energy Efficiency Opportunities legislation. These recommendations are consistent with those reported for the Draft Report and its supplement.
Corporations will now eagerly await the release of the Federal Government’s White Paper on the Carbon Pollution Reduction Scheme and the anticipated announcement of a range of emissions targets. However, announcement of a firm cap for the period to 2020 is not expected until after the conclusion of the Climate Change Conference in Copenhagen in late November and December 2009. That conference will attempt to negotiate a ‘Copenhagen Protocol’ to replace the Kyoto Protocol for the period starting in 2013.
Endnotes
1. Professor Garnaut’s Draft Report
2. Professor Garnaut’s supplement to the Draft Report, Targets and Trajectories
This article was written by John Taberner, Consultant, Sydney.
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