The Productivity Commission’s submission to PM Howard’s task group on emissions trading had the following to say about going it alone on greenhouse gas abatement:
“Independent action by Australia to substantially reduce GHG emissions, in itself, would deliver barely discernible climate benefits, but could be nationally very costly. Such action would therefore need to rest on other rationales.
– Facilitating transition to an impending lower emissions economy is the strongest rationale for independent action, but it is contingent on the imminent emergence of an extensive international response” (p. viii)
The theme is picked up in more detail on pages 8-9
“Non-consensus scenarios, including independent action, which do not involve burden sharing, inevitably bring some competitive fundamentals into focus. In Australia’s case:
• independent action would not, in itself, achieve discernible climate benefits because, despite its relatively high per capita emissions, Australia contributes only around 1.4 per cent of global GHG emissions.4 To put this in perspective, Australia’s total annual GHG emissions constitute less than the United States and China each emit in a month (table 1.1);
• Australia’s high living standards derive in part from the largely efficient use of an abundance of low cost fossil fuels, reflected in relatively high per capita emission levels. As a result, substantially reducing GHG emissions would be costly for the Australian community, with costs borne mainly by consumers and the owners (and employees) of businesses that directly or indirectly rely on the intensive use of GHG producing energy sources.”
Finally, the PC thinks that the moral suasion argument is weak –
“Overall, the Commission’s view is that it is unlikely that major new initiatives could be justified solely on the grounds that this would enhance Australia’s standing as a good world citizen, or be influential in persuading other countries to take similar measures.” (p. 31)
As a key player in the tariff debate over the past fifty years, I think the PC is uniquely placed to make this assessment.
I think we should follow Canada and shelve our plans until there is some progress toward agreement between the major global emitters.