Sydney - Australia laid out plans Friday for a national scheme for carbon-emissions trading that it hopes will help slow climate change but not halt the national economy or hand a competitive advantage to other countries. The scheme, contained in a report delivered to Prime Minister Kevin Rudd by top economist Ross Garnaut, would begin in 2010 and include the energy and transport industries but exclude agriculture.
Professor Garnaut said unless global warming was arrested, Australia would soon lose tourism magnets like the Great Barrier Reef and arable land would transform into worthless desert.
"Without early and strong action, some time before 2020 we'll realize we have indelibly surrendered to forces that have moved beyond our control," he told reporters in Canberra. "Delaying now will eliminate attractive, lower-cost options; delaying now is not postponing a decision, it's making a decision."
Rudd broke with previous leader John Howard's policy and signed the Kyoto Protocol on climate change after defeating the veteran conservative in the November election. He has set a target of reducing emissions by 60 per cent by 2050.
Australia is among the world's biggest polluters on a per capita basis, with emissions per head at least five times that of China. It is also the world's largest exporter of coal and relies on coal for over 80 per cent of its own power generation.
Garnaut urged Rudd to use half the funds collected from the sale of permits to ease the burden on the lowest-income households. His report recommended the inclusion of the energy and transport industries and urged help for industries like aluminium smelting that would lose international competitiveness against developing countries that didn't adopt emissions-reduction measures.
Chris Richardson, director of private sector Access Economics, had urged Garnaut not to fight shy of including road transport and power generation in the trading mix, even though consumers would howl at the further rises in the cost of running a car and lightning a home.
"The whole idea of carbon pricing is that if it doesn't hurt it won't work," he told national broadcaster ABC. "Essentially, prices, for example for petrol as well as a whole bunch of other things, have to go up in order to encourage us to be more careful with how much we use and in order to encourage business to come up with new ways of getting it to us in ways that don't pump out greenhouse gases."
Rudd will respond to the report before the end of the month and then set Treasury economists working to come up with a detailed blueprint for trading. Polluters would be set a cap and then have to buy permits to pollute above that level.
Richardson, a former Treasury official, said there was no way around the need for the government to help some businesses and households cope with the higher costs.
"Prices will go up, compensation will be needed," he said. "The fight over the bucket of money will probably end up being between consumers on the one hand, who will want some sort of tax rebates, and the businesses, because a bunch of businesses are potentially quite affected."
Responding to Garnaut's report, phone giant Telstra said reducing carbon emissions would present business opportunities as well as challenges.
Phil Burgess, Telstra's public policy director, said: "Cars, railroads and electricity have all been developed with cheap energy in mind but now telecommunications is the key to work in a energy- constrained world, enabling people to substitute telecommunications for travel - as in teleconferencing and telework, where you bring work to people, rather than people to work."
