Understanding Climate Risk

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Archive for June 1st, 2011

Garnaut Review 2011: The Good, the Bad and the Weird

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Actually, this is the title of a terrific Korean noodle western I saw a few weeks ago, but it seems a good title for the post.

Ross Garnaut released the final stage of his report yesterday (May 31st) and it has garnered a wide range of comment, some good, some bad, and some weird. There’s a little GB&W about the report itself, comments later in the post.

Altogether, the report contains few surprises. Many of the themes were developed in the 2008 report and were included in the early papers of this report. Some recommendations are:

  • Australia’s fair share: Australia is punching above its weight in emissions. Current rates of increase projected mean that the risk of Australia overshooting its Cancun pledge is real. More realistic sliding targets to 25% that a proportional to international action are required.
  • Governance: an independent scheme regulator, an independent committee to advise on targets, and an independent agency to advise on trade-exposed industries are recommended.
  • Carbon price: an initial price of $26 t C fixed for three years, then a 4% increase over time as reflected in Treasury modelling. The $26 t C price is consistent with carbon market and social cost of carbon levels currently being set in the EU and the US.
  • The science: beyond reasonable doubt, whereas last time it was on the balance of probabilities. Knowledge of risks is increasing and planetary-scale impacts this century are possible.
  • The electricity sector: transformation will be required, the sector is currently over-invested in infrastructure with rates of return exceeding risk but little detail is given.
  • Land, food and biodiversity: a range of recommendations are made to ensure that biosequestration gets the attention it deserves while food production is improved in efficiency and buffered against climate shocks.

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Written by Roger Jones

June 1, 2011 at 6:13 pm