There is no consensus. Economists either believe it is vital that Australia becomes a low-carbon intensity economy, or that the issue is so unimportant – or perhaps that it is so politically divisive – that they choose not to volunteer an opinion.
Asked about the importance of reducing the country's carbon footprint and how best to do it, more than half of 27 economists from industry, consultancy, academia and finance questioned for the annual BusinessDay Scope survey agreed it was a must.
Lower growth, less revenue
Leading Australian economists are more pessimistic about the Australian economy than the official Treasury position. Peter Martin explains.
Leading Australian economists are more pessimistic about the Australian economy than the official Treasury position. Peter Martin explains.
Another 10 left the question blank. Whether this indicates a lack of interest or the contentious nature of climate change policy is unclear.
But none of those who did answer made the case that cleaning up the economy did not matter. They overwhelmingly said action should be swift and include a market-based carbon pricing scheme.
No support was offered for the Coalition government's "direct action" approach to cutting emissions, which does not require businesses or consumers to pay the cost of emissions.Richard Robinson, of BIS Shrapnel, said with global temperatures rising faster than expected it was better for Australia to have effective policies to gradually reduce carbon intensity than to face sudden large adjustments later.
This may mean moving faster than other countries, including the US.
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| Ai Group's Julie Toth said market mechanisms should be used to meet national commitments to substantially cut emissions. Photo: Jonathan Carroll |
"[It] provided large and necessary discounts to energy-intensive exporters and also to some less trade-exposed producers ... and used some of the proceeds to fund renewables projects," he said.
He said it was also vital to support the use of gas-fired power as a transition fuel from coal to renewables through the eastern states' adoption of a "gas reservation" policy.
Market Economics' Stephen Koukoulas, a former adviser to Julia Gillard, answered with "an overwhelming yes".
He said a price on carbon was fundamental to underpin the shift, and there was a "decent case" for helping the renewable energy industry through direct assistance or regulation.
Nicki Hutley, of Urbis Consulting, said the advice to the government by Ross Garnaut nearly a decade ago laid out the need to act clearly. "It is disheartening that the current government is failing to act on this advice," she said.
David Bassanese, of BetaShares, said it was important Australia acted, but it should not move ahead of other countries. He favoured the introduction of specific measures targeting the electricity and transport sectors.
Industry Super's Stephen Anthony said the goal of a lower carbon intensity energy mix was within reach, but warned against imposing a carbon price that acted as a high and variable tariff on Australian goods. If advancing technology alone could not deliver a lower carbon intensity he favoured a GST-style carbon impost on consumption.
But Julie Toth, of the Australian Industry Group, said domestic and international market mechanisms, including carbon credits, should be used to meet national commitments to substantially cut emissions by 2030 and reach zero emissions in the longer term.
"Success will require public policies that are nationally co-ordinated, integrated with energy policy, and endure with broad political support," she said.
"The electricity sector is only part of the picture, but has the most urgent need for a clear policy framework to underpin investment."
Respected independent economist Saul Eslake was succinct. "Yes – and the best way to do it is by putting a price on carbon emissions," he said.
Steve Keen, of London's Kingston University, made what – we think – was a similar point about the importance of climate action, albeit less conventionally.
"Nah mate! Wassa matta, dontcha own a pair of budgie smugglers?" he wrote.
"It's all a conspiracy by Marxists anyway to undermine the Ostralyan way of life – you know, burning stuff and damn well enjoying it rather than whingeing.
"A bit a coal never hurt anyone, matter of fact it tastes even better than a raw onion!"
Links
- Check out Canberra's first 'solar highway'
- 'We should assume our worst fears will be realised'
- Our fight to the death with nature is not one we can win
- Boosting biodiversity seeds the future
- Ill wind blows in energy debate
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