From the FT today, the head of the UN Intergovernmental Panel on Climate Change (IPCC) Rajendra Pachauri says:
“We will have to work much harder to win this battle now than we would have been required to do 10 or 15 years ago…The challenge is daunting but I don’t for a moment feel pessimistic,” he said, explaining there were many examples of technical advances and political actions underway to combat the problem.
The IPCC…will release the latest section of its fifth lengthy report at the end of this month.
Each of its assessments has confirmed what it says is unequivocal warming, caused largely by emissions of carbon dioxide, the main man-made greenhouse gas, produced by burning fossil fuels such as coal and gas.
However, carbon emissions have kept steadily increasing over the lifetime of the IPCC and last year rose to more than 400 parts per million, the highest level in millions of years.
…ahe IPCC’s new report is expected to confirm that the cost of containing climate change will rise the longer governments wait to reduce emissions.
Dr Pachauri said: “We will be looking at the costs of mitigation in next month’s report but in our last report in 2007, we said if you want to stabilise temperature increases to no more than 2C – 2.4C at the least cost, then 2015 is the year when C02 emissions will need to peak.”
Compare this with Alan Mitchell at the AFR today, working from recent analysis by Professor Ross Garnaut:
In Abbott’s emissions purchase scheme, as in Labor’s ETS, the critical factor is the price. In the case of the ETS, the business will cut its emissions or buy an emission permit, whichever is the cheaper. In Abbott’s scheme, the business has an incentive to cut emissions if the price offered by the government covers the cost.
“Incentives to reduce emissions under the Emissions Reduction Fund would only be as large [as] under carbon pricing if the fund were large enough to offer prices as high as the carbon price for all abatement available at that price,” Garnaut argues in a submission to the Senate’s environment committee.
“Acceptance of all offers at this price would be an immense drain on the budget. Incentives to reduce emissions would be weaker than under existing policies at any lower price or coverage.
“By a time just beyond the reach of the current forward estimates, the turnaround in the budget involved in provision of incentives from the Emissions Reduction Fund similar to those currently provided by Carbon Pricing would have a lower limit of around $4 billion to $5 billion per annum at current European prices . . .”
I believe the Government is relying on weaker incentives to reduce emissions to control the Budget blowout. If that’s the case the real cost will ultimately be counted in international sanctions, not to mention faster climate change.
