Garnaut Climate Change Review Draft Report

The Garnaut Climate Change Review Draft Report was released today at the National Press Club. There is a Media Release with a summary (PDF, 312kb). The full Draft Report is 548 pages (13.5Mb of PDF). Public forums about the report will be held in Perth, Adelaide, Melbourne, Sydney and Brisbane from next week.

One of the key messages of the report is that a way must be found to decouple economic development from fossil fuels. One of the obvious ways to do this is with the commerce of information, not physical goods. Unfortunately this is something Professor Garnaut has not grasped.

The report itself fails to use efficient online techniques to reduce the environmental footprint of its distribution and allow more public consultation. The report is formatted as relatively inefficient PDF (about ten times larger than it need be) and so will itself contribute to the greenhouse effect. Also the public forums are only being held in a few locations, requiring those in outlying areas to consume fossil fuels to attend, with no online forum.

The lack of understanding of the role of electronic communications in sustainable development is also illustrated by the notation in the PDF version of the document, which claims that it is "... printed on 9Lives 80, a paper composed of 80 per cent post‑consumer fibre and 20 per cent totally chlorine‑free pulp ..." and "All inks used in the printing of this report are vegetable based". Neither of these claims is true, as the electronic document is composed of bits of information, with no particular physical form.

Very few of the people reading the report will ever see one of the small number of paper copies produced. It is therefore important to ensure the electronic version they do read is efficiently produced, as well as being an adequate substitute for paper and ink. Understanding that will be key to the solution to climate change.

Appended are the table of contents and the media release, reduced to an efficient text format:

Garnaut Climate Change Review Draft Report
Contents

Preface ix
Terms of reference x
1. Australia’s climate change challenge 1
1.1 The context of the draft report in the Garnaut Climate
Change Review 6
1.2 Main themes 8
1.3 Main policy tendencies 9
1.4 Adaptation: prospects and limits 11
1.5 Synopsis 12
2. Policy choice about climate change mitigation 23
2.1 Risk and uncertainty 25
2.2 The costs of mitigation 27
2.3 Four kinds of benefits from mitigation or avoided
climate change 32
2.4 How effective adaptation reduces the cost of climate
change and the benefits of mitigation 36
2.5 Measuring the benefits of mitigation against the costs 38
2.6 A graphical representation of the benefits and costs 39
2.7 Valuing the future relative to the present 42
2.8 The Review’s recommendations in a world of
uncertainty and important immeasureable impacts 45
3. The science of climate change 47
3.1 The earth’s atmosphere and the natural
greenhouse effect 48
3.2 Understanding climate change 53
3.3 Linking emissions and climate change 57
3.4 Adressing the extremes: severe weather events,
low likelihood outcomes, and thresholds 70
3.5. Uncertainty in the climate science 74
3.6 The science behind global mitigation 76
4. Emissions in the Platinum Age: the rapid, recent and
projected future growth of greenhouse gas emissions 87
4.1 Greenhouse gas emissions by source and country 87
4.2 Recent trends in carbon dioxide emissions from
fossil fuels 89
4.3 Existing emissions projections 92
4.4 The Review’s no-mitigation projections:
methodology and assumptions 93
4.5 Results from the Review’s projections and
comparisons with existing projections 96
4.6 The impact of high energy prices 101
4.7 Resource limits 104
5. Observations and projections of global climate change 111
5.1 How has the climate changed? 112
5.2 Understanding climate change projections 120
5.3 Projected climate change for the no-mitigation
and mitigation cases 124
5.4 Assessing the extremes 132
6. The Australian context to climate change 143
6.1 Attributing observed and projected climate change
to humans 144
6.2 Historical climate change in Australia 144
6.3 Projected climate change in Australia 151
7. Impacts of climate change on Australia 161
7.1 Understanding Australia’s vulnerability to climate
change 164
7.2 Implications of the no-mitigation case for Australia 165
7.3 Direct impacts of climate change on Australia 168
7.4 Indirect impacts of climate change on Australia 186
7.5 Conclusion 193
7A Climate cases considered by the Garnaut Review 197
7B Infrastructure impacts criteria 198
8. Australia’s emissions and the economy 199
8.1 Australia’s emissions profile and international
comparisons 199
8.2 Emissions profiles of Australian industries 206
9. The modelled economic consequences of climate change
in Australia 213
9.1 Capturing the impacts of climate change through
economic modelling 214
9.2 Representing climate change impacts in
economy-wide analyses 217
9.3 The contribution of individual climate change
impacts to net economic impacts 241
9.4 A final caution 244
10. The wider costs and benefits of climate change
mitigation in Australia 249
10.1 What proportion of market impacts does the modelling
include and how significant are the exclusions? 250
10.2 Insurance costs of climate change mitigation—
extreme climate change scenarios 260
10.3 Non-market impacts that Australians value 264
10.4 Assessing the costs of climate change beyond 2100 266
10.5 Implications for evaluating the costs and benefits
of climate change mitigation policy 267
11. The international response to climate change to date:
an assessment 269
11.1 The evolving international framework for addressing
climate change 270
11.2 National-level commitments and policies to
mitigate climate change 273
11.3 Assessment of progress under the Kyoto Protocol 277
11.4 Projections given the current trajectory of
mitigation effort 280
11.5 Accelerating progress 281
12. Towards agreement on global and national
emissions limits 289
12.1 Agreeing on a global goal 290
12.2 What form should national commitments take? 294
12.3 A graduated approach to national commitments 297
12.4 Principles for allocating emissions entitlements
across countries 300
12.5 Shaping a per capita approach to the allocation
of emissions entitlements 305
13. Deepening international collaboration 309
13.1 International public funding for mitigation 310
13.2 International public funding for adaptation 315
13.3 International trade in emissions rights 318
13.4 Price-based sectoral agreements for the
trade-exposed, emissions-intensive sectors 321
13.5 Climate change and trade policy 323
13.6 International aviation and shipping 325
13.7 Forestry-related emissions 326
13.8 Enforcement mechanisms 330
14. Australian mitigation: overview of the policy challenge 337
14.1 Emissions entitlement limits for Australia 339
14.2 Addressing the greatest market failure ever seen 341
14.3 Mitigation policy: a broader reform agenda 345
14.4 Income distribution effects 356
15. An Australian emissions trading scheme 359
15.1 Framework to guide scheme design 361
15.2 The emissions trading scheme in operation 364
15.3 Transition period: Australia’s emissions
trading scheme to the end of 2012 390
15.4 Optimal design features of an emissions
trading scheme under a global agreement 392
15A Trade-exposed, emissions-intensive firms 397
16. Research, development and innovation 403
16.1 What is innovation and how does it happen? 405
16.2 Ensuring optimal levels of early research 408
16.3 Rewarding early movers 414
16.4 An overarching framework for innovative activities 424
17. Network infrastructure market failures 427
17.1 Infrastructure for the transmission of electricity 429
17.2 Infrastructure for the distribution of electricity 435
17.3 Gas transmission infrastructure in Australia 437
17.4 New infrastructure for the transportation of
carbon dioxide 438
18. Information and agency barriers 443
18.1 The impact of information and agency barriers 444
18.2 Public good information 446
18.3 Information asymmetry 452
18.4 Early adopter spillovers 454
18.5 Principal–agent problems 455
18.6 Minimum performance standards 458
18.7 Applying the market failure framework to buildings 460
19. Income distribution effects of climate change
mitigation policy 469
19.1 Impacts will flow through the economy, and will
be uneven 470
19.2 Effects of an emissions price on households 474
20. The energy transformation 481
20.1 The role of energy and the basis for transformation 482
20.2 Drivers of the transformation 489
20.3 The path to transformation 497
20.4 Key economic impacts 507
20.5 Risks to the transformation 507
20A Stationary energy compensation 511
List of figures and tables 515
List of shortened forms 520
Glossary 522

From: GARNAUT CLIMATE CHANGE REVIEW DRAFT REPORT, GARNAUT CLIMATE CHANGE REVIEW, Friday 4 July 2008

MEDIA RELEASE
Friday 4 July 2008

GARNAUT REVIEW RELEASES DRAFT REPORT

Australians are facing risks of damaging climate change. Without strong and early action by Australia and all major economies we are likely to face severe and costly impacts on Australia’s prosperity and enjoyment of life, according to the Garnaut Climate Change Review’s Draft Report, released today.

Speaking at the National Press Club in Canberra, Professor Ross Garnaut said that by 2050, unmitigated climate change on middle of the road outcomes would mean major declines in agricultural production across much of the country, including a 50 per cent reduction in irrigated agriculture in the Murray-Darling Basin. By 2100, irrigated agriculture in the Murray Darling Basin would decline by 92 per cent.

Early economic modelling results of readily measurable unmitigated climate change for middle of the road outcomes on temperatures and decline in rainfall – indicate that climate change would wipe off around 4.8 per cent of Australia’s projected GDP, around 5.4 per cent of projected household consumption, and 7.8 per cent from real wages by 2100.

“These readily measurable costs are only part of the story. There are also conventional economic effects that are not currently measurable, the possibility of much larger costs from extreme outcomes, and costs that aren’t manifested through markets,” said Professor Garnaut.

The full economic modelling results, to be released in a Supplementary Draft Report in August, will help complete the picture for Australians, by comparing the costs and benefits of climate change mitigation. This will inform the Review’s consideration of emission reduction trajectories and targets.

The Final Report will be released in September.

Professor Garnaut said that the climate change impacts would be significantly reduced with strong global mitigation.
“Australia needs to play its full part in the international effort if global mitigation is to have a chance.
The first step is to take action as part of the developed world, with a view to bringing in developing
countries – first of all China – on the earliest possible timetable,” he said.

“Australia would be hurt more than other developed countries by unmitigated climate change, and we therefore have an interest in encouraging the strongest feasible global effort. We are running out of time for effective global action, and it is important that we play our full part in nurturing the remaining chance.

“We will delude ourselves should we choose to take small actions that create an appearance of action, but which do not solve the problem. Such an approach would risk the integrity of our market economy and political processes to no good effect,” said Professor Garnaut.

“Australians are well placed to deal with the challenges of this major economic reform. As with all economic reform, mitigation policy must be forward-looking. Policy interventions and the use of public and private resources should focus on improving future economic prospects rather than reacting to past decisions”, said Professor Garnaut.

The Draft Report provides the Review’s suggestions on the design of the emissions trading scheme (ETS). Professor Garnaut reiterated his support for the ETS to cover as many sectors as practicable.

“The more sectors included in the ETS, the more efficiently costs will be shared across the economy. Transport should be included,” said Professor Garnaut.

The Draft Report advocates the full auctioning of emissions permits and the return of all revenue to households and business.

“The cost to consumers of rising energy and petrol prices, can be balanced through payments to households, while preserving price incentives to reduce emissions,” he said.

The Report proposes that half the proceeds from the sale of all permits is allocated to households, around 30 per cent provided for structural adjustment needs for business (including any payments to TEEIIs), and the remaining 20 per cent allocated to research and development and the commercialisation of new technologies.

“The proceeds from the ETS should be allocated for purposes that will help Australia adjust to a lowemissions future,” said Professor Garnaut.

“A massive increase – reaching $3 billion per annum – is required in Australia’s commitment to lowemissions technology research, development and commercialisation,” he said.

The Draft Report states that it would be in Australia’s interest to find out as soon as possible whether there can be a low-emissions future for coal, and to support rapid deployment of commercially promising technologies. This follows from Australia’s role as the world’s largest exporter of coal and the central place of coal in growth in emissions from Asian developing countries.

“Australia has the opportunity to play a leadership role in funding and co-ordinating a major global effort to develop and deploy carbon capture and storage technologies, and to transfer those technologies to developing countries,” said Professor Garnaut.

“Additional mitigation policies should only be undertaken where they will lower the overall cost to the economy, by correcting market failures,” he said.

Professor Garnaut said that he supported the phase-out of the Mandatory Renewable Energy Target, once the unconstrained ETS was fully operational.

“The Review’s first aim is to lay out the issues for policy choice in a transparent way. We will have done our job if Australian governments and the community make their choices in full knowledge of the consequences of their decisions,” said Professor Garnaut.

Professor Garnaut will host public forums on the Draft Report in a number of cities around Australia between 7-11 July 2008.

For more information visit www.garnautreview.org.au

From: GARNAUT REVIEW RELEASES DRAFT REPORT, MEDIA RELEASE, GARNAUT CLIMATE CHANGE REVIEW, Friday 4 July 2008