Garnaut Climate Change Review issues first of 8 update papers in 2011; reaffirms decision-making framework and need for mitigation efforts
As commissioned by the Australian Government in 2010, the Garnaut Climate Change Review, led by Professor Ross Garnaut, has issued the first of a series of papers scheduled for this month and next updating the 2008 Climate Change Review. (Earlier post.) A Final Update Report will be presented to Australia’s Prime Minister on 31 May 2011.
This first update paper, “Weighing the costs and benefits of climate change action”, discusses the decision-making framework of the 2008 Review and implicit and explicit criticisms of it since it was presented to the Prime Minister, State Premiers and Territory Chief Ministers on 30 September 2008. This paper focuses specifically on five issues:
- the Review’s choice of discount rates;
- the treatment of uncertainty;
- the contributions to mitigation from low-income developing countries;
- determining Australia’s proportionate effort as part of global mitigation;
- and the optimal balance between efforts on climate change mitigation and on climate change adaptation.
|Tempting though it is to do so, it is neither rational nor helpful to reject conclusions because we do not like them. The conclusions will only be wrong if the premises, information or logic leading to them are wrong.|
|—2008 Climate Change Review|
The 2008 Review attempted to answer, from the perspective of Australian national interest, the question: What extent of global mitigation, with Australia playing its proportionate part, provides the greatest excess of gains from reduced risks of climate change over costs of mitigation?
To answer this central question, Garnaut developed a framework to consider whether the costs of policies designed to mitigate the effects of climate change exceeded the benefits of mitigation. Various market and non-market benefits of mitigation were identified for the current century and beyond. Market and non-market benefits of climate change mitigation arise from avoiding the costs associated with climate change itself. Within the framework, detailed economic modelling of market costs and benefits embodying the wisdom of the science was undertaken by the Review team and the Australian Treasury.
The modelling showed that economic welfare was higher at the end of the century with mitigation than without. The net present value of the market benefits of average outcomes this century fell just short of the net present value of the costs of mitigation policy. However, when non-market benefits plus the insurance value of avoiding unexpectedly severe outcomes, plus the avoidance of climate change costs beyond the twenty-first century were taken into account, the case for effective global action with Australia playing its proportionate part became compelling, according to Garnaut.
The Review concluded that Australia has a greater interest in a strong mitigation outcome than any other developed country. It expressed the view that it was in Australia’s national interest for effective global mitigation, with Australia playing its proportionate part, to stabilise global greenhouse gas concentrations at 450 parts per million (ppm) carbon-dioxide equivalent (CO2-e) or less. It was therefore consistent with the Review’s judgement of the national interest when the Copenhagen Accord, which emerged from the December 2009 Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC), for the first time included an objective of holding the increase in global temperature to below 2°C above pre-industrial levels (roughly corresponding to 450 ppm). This was formally accepted as a goal of the United Nations at Cancun in December 2010.—“Weighing the costs and benefits of climate change action”
Among the findings of the first Update Paper are:
|It is likely that the financial resources that have been contributed so far to adaptation to climate change
substantially exceed the resources that have been invested in mitigation.|
“The requirements of adaptation take a more immediate and compelling form than the demands of mitigation, and for that reason have advantages in the competition for resources through political processes. These are matters for judgement.
Without in any way underplaying the importance of a large, well-designed and well-resourced adaptation effort, my own judgement is that there is no evidence at this time nor any danger of over-investment in mitigation at the expense of investment in adaptation.
|—“Weighing the costs and benefits of climate change action”|
The 2008 Review’s choice of discount rate was sound and that the Australian case for climate change action is not affected by reasonable variations in the approach to choosing a discount rate;
The presence of uncertainty in the range of possible climate outcomes strengthens the case for climate change action;
The Review’s approach to the treatment of developing countries as part of a global response remains a robust and ethical basis for a long-term solution;
The case for substantial and well-designed Australian action to encourage international agreement on climate responses remains compelling; and
While the current and prospective realities of damage from climate change warrant effective efforts on adaptation, this does not weaken the case for strong focus on mitigation.
The update paper notes that while there are good reasons to wish that the world were further down the track towards effective global mitigation to achieve the target agreed by the international community at Copenhagen and Cancun, there is a now a large distance between where we are presently after Copenhagen and Cancun, and where we would have been with no international mitigation efforts at all.
There is still a chance of achieving strong mitigation objectives, the update says. At worst, the result will be materially less damage from climate change than would have been the case with no international mitigation effort at all.
It is clear from the Update’s preliminary analysis that there have been significant scientific, policy and analytical developments since 2008. The international framework changed fundamentally at Copenhagen and Cancun. The climate science has developed, mostly in ways that heighten rather than ease concerns. There have also been considerable developments in the domestic policy discussion. Interestingly, the costs of some low-emissions technologies appear to have been falling faster than anticipated. However, a late start globally on mitigation has raised anticipated costs of both climate change and its mitigation.
The analysis of the Update is directed towards evaluating the question that was posed at the beginning of the Review about whether gains from mitigation of climate change, within a global framework, exceed the costs. This question hasn’t changed. The decision-making framework within which the Review considered this question has been subject to some debate over the past two and a half years. The main criticisms of the framework have been examined in this paper. The framework remains, as it was in 2008, a robust, logical and ethical framework within which to consider the most vexed policy question of the age, climate change.—“Weighing the costs and benefits of climate change action”
Update papers to be published this month and next include:
|Garnaut Climate Change Review update papers|
|Weighing the costs and benefits of climate change action||3 February 2011|
|Progress towards effective global action on climate change||7 February 2011|
|Global emissions trends||11 February 2011|
|Transforming rural land use||late February/early March 2011|
|The science of climate change||10 March 2011|
|Carbon pricing and reducing Australia’s emissions||17 March 2011|
|Low emissions technology and the innovation challenge||23 March 2011|
|Transforming the electricity sector||late March 2011|