Garnaut Lifts the Lead Veil of Ignorance

Garnaut Lifts the Lead Veil of Ignorance

Professor Ross Garnaut, author of the impressive Garnaut Report two years ago, is back on deck as a key Australian Government advisor on setting a price on carbon. He told the Carbon Expo audience he was “frankly shocked” at how persistent the ignorance in Australia is of developments in other Asia Pacific countries, particularly China, in moving towards a low carbon economy and renewable energy. “It is as if a lead veil had been inserted around the brains of most Australians and made them impervious to information – that’s not secret information – about what is going on other countries.”

From Climate Spectator (13 October 2010):

After delivering a speech at the conclusion of Carbon Expo in Melbourne on Wednesday, Professor Ross Garnaut answered questions from the audience and then from Climate Spectator editor Giles Parkinson. This is an edited transcript, in which Garnaut says:

– That the update of his 2008 review of climate change will include looking at the changes in the “international regime”, as well as what individual countries – especially China, India and Indonesia – are doing to adapt;

– That it’s as if Australians have been considering climate change from behind a “lead veil”, making them impervious to what is going on other countries;

– That the atmosphere in the parliamentary committee is a very positive one and has a strong commitment to getting a good result;

– That the policy focus of the parliamentary committee is on a carbon price, and then looking at what the rest of the world is doing on emissions reductions and the implication of that on Australia’s effort.

Moderator: Could you say something about how you unlock institutional investment here in Australia. This morning we had some presentations from China, Indonesia and India and it looked like there was a real risk that Australia had been left behind by its major trading partners in Asia, and particularly China where the speaker Dr Hu Tao said that they lost the industrial revolution, they’ve missed out on the IT boom, but China has decided it’s definitely not going to miss out on the Green Revolution.

Ross Garnaut: Yes. One of the updated papers that I’ll be doing will be looking at what’s been happening to the international regime – and we do have an international regime, but it’s not exactly the regime that we would have anticipated a few years ago. And then what individual countries, the major ones, are doing. And the primary focus will be on China, India and Indonesia and especially on China.

It is impressive how quickly things are changing in each of those countries, but especially in China and I am frankly shocked at how persistent the ignorance in Australia is of that. It is as if a lead veil had been inserted around the brains of most Australians and made them impervious to information that’s not secret information about what is going on other countries. And I think a very important part of the Australian discussion over the next year has to be directed at corroding that lead shield.

M: You mentioned among the papers that you will be touching on are agricultural land use opportunities. Will you be looking at opportunities to actually support the development of bio-sequestration and unlocking them to be included in market mechanisms? There is quite a lot happening internationally and it really matches some of the land management profiles here in Australia. So, have you been looking at that or are you still looking at compliance, type and emissions trading activities?

RG: Yes. Well, at this stage I can’t say very much about the exact approach I’ll take to some of those things because I’m still thinking it through, but for Australia and for a number of the developing countries in particular, certainly for Indonesia and Brazil, the opportunities … through bio sequestration are very large and mitigation that does not efficiently have those opportunities obviously will be inadequate, so we’ll give it a lot of thought both to the results of work that’s been done in the last couple of years on the nature and extent of the opportunity and on how to unlock that.

M: I would just wonder about the mode of communication. You produced an extraordinarily elegant overview of the need and the importance of the challenge, but the sad reality is the people who make decisions didn’t read it and grubby politics with half truths blocked the passage of the carbon price. So, given that, presenting more of the same isn’t going to effect the necessary change and I just wonder whether you reflect on the mode of communication of delivery and whether we need alternative tactics.

RG: I don’t think I would have saddled up for another ride if I had thought it would be exactly the same as last time. I think the atmosphere in the parliamentary committee is a very positive one. Obviously everyone’s got different perspectives, but my assessment is a quite strong commitment to getting a good result and… that’s one that’s changed. Another thing that changes is the composition of the parliament. If it does turn out that that multi party committee comes to a view, that something’s desirable, then the group that’s represented in that committee can carry both houses of parliament and that is a new situation. It’s a new reality that all the other political actors in Australia have to take into account.

I think that the political economy of the last episode, the CPRS discussion was gruesome, … and I think a lot of the participants in that process have reflected on the process, so I’ve got a lot of links into business and I know that some important participants in the business discussion feel that they didn’t do justice to the interests even of their companies let alone of the national economy in the last discussion and so I think that a lot of elements of business will start with a greater sensitivity to … what’s desirable in the longer term and for the national economy rather than seeking to influence things in terms of very short term objectives of their own enterprises. So I think that a fair bit of learning has gone on as a result of well frankly the failure of the last effort. I hope that that learning will be influential.

M: One of the themes that we’ve seen through the conference has been the notion that any uncertainty about policy or a regulatory market would be significantly magnified in the investment community. Given this new political world, are you able to comment on that?

RG: Well, I don’t think you ever have complete certainty about policy, especially in advance of policy being implemented. My own view is, and actually has always been, that difficult policy changes are bound to be controversial while they’re being debated. What you have to hope for is that they’re especially well designed, so that once they’re in place most people accept that they achieve very good purposes and so I’d like to see the focus on stability after something’s legislated rather than to have excessive ambitions for consensus, comprehensive consensus before legislation. These are big changes that are necessary in Australia. They’re bound to have elements of controversy. If we design things well and they’re legislated, the reasonable expectation is that there’ll be such strong support for the last of the event that it won’t be in anyone’s political interest to disrupt them.

M: Professor, one of the great obstacles in the CPRS debate was the support of industry and one of the biggest qualms that many affected industries had was in the level of compensation and I note that a number of parties have referred to the… your recommendations of compensation only to the level of lost competitiveness. Is that something that you’re planning to look at, the level of compensation to affect the party?

RG: Oh, what I would hope is that we can have a good discussion about the principles that should apply, so that questions of compensation can be based on application of principles rather than crude political bargaining and I think if that’s the approach, there’s a much better chance of a sound result.

Giles Parkinson: What is the deadline for report, your update?

RG: Well, I’ll be seeking to bring out papers on particular issues in a timely way as the work goes on and including having a couple done by the December meeting of the multi party committee, but I would expect to have all of the basic work done by March and then in the couple of months after that pull it all together in a final report, but the new material should be all in the public arena by March.

GP: Ok, then and the ones that are coming out by December, which ones are you starting on first?

RG: Oh, I’m still working through the work program.

GP: You talked about the shield of lead that has descended over Australia. What do you think has been the cause of that?

RG: It is a puzzle. It’s more severe within Australia than even in the United States, which is the other country that finds itself looking inward rather than outward at what the rest of the world is doing. Maybe it’s the result of the emissions intensive industries playing a particularly large role in this economy and that by osmosis and by influence is affecting perceptions, information. I can’t think of other explanations because generally Australians are reasonably well informed about the rest of the world.

GP: The inference from your comments about the absence of inaction in the world stage… we heard about what’s happening in China and India and Indonesia. That suggests that one of your main justifications for recommending a 5 per cent target last time in the international context …..

RG: Well, the 5 per cent is what we would do if there was no international agreement and no international action, yes.

GP: But there is obviously international action, so I guess the inference would be that Australia probably should be aiming higher than 5 per cent.

RG: Yes, probably. But that’s a separate question from the carbon price that is necessary and I don’t want to get two separate issues mixed up. The policy focus of the parliamentary committee is on a carbon price. Separately I will be forming views on what the rest of the world is doing and the implication of that for a comparable and proportionate emissions reduction effort from Australia.

GP: But they are related anyway because I think the committee is looking at how to create a carbon price and I guess if a market price was to be the recommendation, then you need to have a cap and the cap has to reflect a target.

RG: Oh, we haven’t gone that far at this stage.


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