Garnaut on Friday launched a supplementary draft report to the initial draft of the Garnaut Review which detailed proposed targets and trajectories for carbon emission reductions in Australia.
Alongside the targets, the review also recommended carbon permits be sold at a set price of A$20 per tonne from 2010 and then rise by 4% a year, on top of inflation, until 2013.
After this the open market would set the price of a tonne of carbon.
In the launch of the review at the National Press club on Friday, Garnaut admitted the impost of a 10% reduction in emissions on 2000 levels in Australia could drive up electricity prices by 40% over the next 12 years.
Green groups have criticised the targets as too low, while mining industry groups have cautiously agreed that setting targets is important, but the key plank in reducing carbon emissions remains clean coal technology.
The Queensland Resources Council said in a statement Garnaut’s supplementary draft report to the climate change review only emphasised the importance of carbon capture and storage to the future of Australia’s coal industry.
QRC chief executive Michael Roche said the industry body would carefully study Garnaut’s review and make recommendations on targets in coming days.
“However, we do note his finding that the future of the Australian coal industry depends critically on the success of carbon capture and storage technologies, not only in Australia, but in the rest of the world, and especially in Australia’s major coal markets in Asia,” Roche added.
‘It is therefore essential that the federal government’s final Carbon Pollution Reduction Scheme is accompanied by a substantial financial commitment to low emissions technologies including carbon capture and storage.”
The Minerals Council of Australia also said the review set the right framework, but “posed very difficult numbers”
MCA chief executive Mitch Hooke said a 10% national emissions reduction target by 2020 would be extremely difficult to achieve given that it represents a 30% reduction on a “business as usual basis”.
“Put simply, meeting this target without significant technological breakthroughs is akin to moving Australia to a ‘candles economy’,” he said.
“We welcome Professor Garnaut’s conclusion that there are few prizes for Australia taking unilateral action, indeed it can impose significant costs.”
Hooke also said the MCA questioned Garnaut’s proposal for a global protocol on emissions and said it would disadvantage export-dependent economies like Australia.
“The missing link in much of the debate remains the prospect and pace of the development and commercial deployment of low emission technologies,” Hooke added.
“Unrealistic interim targets introduced before clean coal and other emissions reduction technologies are available, simply become aspirational and, in the context of an emissions trading scheme, impose carbon costs beyond the market’s ability to adjust industrial behaviour.”
In launching the review on Friday, Garnaut said his modelling indicated the cost to Australia of mitigation to the 10% level would be 1.1% gross domestic product by 2020.
