New Paper Released by Professor Ross Garnaut Fires Up the Current Carbon Price Debate

Canberra, Australia ( March 17, 2011

New Paper Released by Professor Ross Garnaut Fires Up the Current Carbon Price Debate

New Paper Released by Professor Ross Garnaut Fires Up the Current Carbon Price Debate

The Government has welcomed today’s release of the paper: Carbon Pricing and Reducing Australia’s Emissions by Professor Ross Garnaut.

This is the latest in Professor Garnaut’s series of Updates to his 2008 report and will play an important role in informing the current debate about a carbon price.

The Government’s proposed carbon price will raise revenue from large polluters, who will be responsible for the first time for the carbon pollution they create. This money will then be available to assist households with price increases, to support jobs and to tackle climate change.

Professor Garnaut’s paper supports the framework announced by the Government to drive investment in a clean energy future.

Professor Garnaut states that:

“…an emissions trading scheme, initially with a fixed (and rising) price, is the best instrument for long-term emissions reductions …“This model provides the benefits of credibility and steadiness in its early years, as industry and institutions build confidence and capability, with later trade in abatement allowing emissions reductions to take place where they are cheapest. It also provides substantial revenue”.

Professor Garnaut makes clear that in considering methods to price carbon, market based mechanisms are clearly superior to those that propose direct measures. He says that:

“Direct measures would not assure least cost abatement, and are therefore likely to lead to a bigger “tax” on households”.

This supports the Government’s analysis of Mr Abbott’s proposed Direct Action policy which will fail to achieve any significant environmental outcome but will cost working families through increased taxes.

In contrast, the Government’s proposed carbon price is the cheapest, fairest and most efficient way to cut pollution.

The paper also confirms that by taking action now, Australia will not be leading the world but instead will be making sure we do not fall behind.

Professor Garnaut’s paper also highlights the importance of providing industry with assistance throughout the transition period.

Professor Garnaut has recommended that the most appropriate starting point for this assistance is the Government’s original assistance package for emissions-intensive trade-exposed industries.

As the Prime Minister made clear in her speech last night, the Government will help emissions-intensive trade-exposed industries as we transition to a low pollution future. This assistance will be designed to support existing jobs while creating new ones.

The Government wants to ensure that a carbon price creates incentives for business to cut pollution and supports them through this transition.

In summary, Professor Garnaut’s paper supports a price of carbon as the best way of dealing with emissions – not only because it’s a market mechanism, but because it raises revenue that can be used to assist households, support jobs and tackle climate change.

The Government will continue to engage community, stakeholders before final details are settled.

Attachment: Key Points – Garnaut Review Paper

New Paper Firing Up the Current Carbon Price Debate Released by Professor Ross Garnaut

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