DEEP and prompt cuts to carbon emissions would not damage the economy, an Australian delegation will tell the United Nations climate change talks starting in Bali today.
DEEP and prompt cuts to carbon emissions would not damage the economy, an Australian delegation will tell the United Nations climate change talks starting in Bali today.
The Climate Institute will present fresh research showing that if emissions are reduced sooner rather than later, the cost of energy will be more affordable in years to come than it was in 2005.
Economic momentum, jobs and investments would be safeguarded even with greenhouse gas cuts as high as 20 per cent below 1990 levels by 2020.
Emissions reductions of this magnitude would be necessary to reverse catastrophic climate change by mid-century, the institute said.
Erwin Jackson, Climate Institute policy and research director, told BusinessDaily that if Australia took a leadership position, along with other nations acting to slow global warming, it would safeguard a robust economy beyond 2020.
In a detailed report co-written by Mr Jackson called "Leader, Follower or Free Rider? The economic impacts of different Australian emission targets", it is suggested that if Australia continues to postpone action, future climate policy shocks will hurt business.
"This report shows that saving the planet will not cost the earth but failure to act may," said Mr Jackson, who will be delivering the report at a forum in Bali today.
"Early action is affordable and in industries' best interests because it creates the necessary certainty for them to unleash the innovation and productivity of the business community."
By 2050, it is projected that the size of the economy will treble and 16 million new jobs will be created, even if fast and deep action on emissions is taken.
The report concludes that gross domestic product would be just 0.1 per cent slower if deep cuts to emissions are made so that by 2050, Australia would be carbon neutral.
"This is an affordable insurance policy against prolonged and severe droughts," he said.
"It's a furphy to think that the economy will be destroyed by action to reduce greenhouse gas emissions."
The institute's report is an update on the findings arrived at by the Business Roundtable on Climate Change last year that urged fast action on emissions policy, Origin executive Tony Wood told BusinessDaily. "There are some segments of the economy that will be significantly affected initially, especially high energy intensive industries like aluminium smelters.
"But broadly across the economy, that won't be the case.
"All the modelling that has been done so far shows that the impact of electricity prices is relatively modest and that energy affordability actually increases over time," Mr Wood said.
Members of the Business Roundtable which warned that the cost to the economy would be greater if nothing was done to address climate change were Westpac, IAG, Origin, BP, Swiss Re, Visy and the Australian Conservation Foundation.
Mr Wood added that the Climate Institute report was even more conservative in its assumptions than the Stern Review commissioned by former UK prime minister Tony Blair last year.
Also attending Bali as part of the new Federal Government contingent will be Clean Energy Council chief executive, Dominique La Fontaine, and CEC chairman Richard McIndoe, whose TruEnergy group operates wind farms and coal-fired power stations, such as Yallourn.
Other delegates attending include representatives of PriceWaterhouseCoopers, wind and hydro electric companies Pacific Hydro, Hydro Tasmania and Roaring 40s, sustainable buildings developer Szencorp, and listed gas producer Origin Energy.
The full report can be accessed at www.climateinstitute.org.au.
