The Mercury
By: Malcolm Farr
Fighting "insidious'' climate change would batter the budgets of low-income families, the Government's emission's control expert, Ross Garnaut, conceded yesterday.
An emissions trading scheme, which made carbon-polluting products such as petrol and electricity more expensive, would add to household bills and be regressive.
But Professor Garnaut, an economist, said the cost to families would be much greater if there was no attempt to mitigate climate change.
Jobs would be lost and changing weather patterns would destroy national symbols such as the Barrier Reef, Kakadu National Park, and the Murray-Darling Basin.
The draft report outlined preliminary modelling of what would happen if action were not taken.
It said that "middle-of-the-road impacts'' would cause national output, or GDP, to be cut by 4.8 per cent by the end of the century -- a fall of more than $400 billion a year.
Wages would fall 7.8 per cent and our spending would drop 5.4 per cent.
Prof Garnaut urged that half the revenue from an emission trading scheme, which could mean from $3 billion to $10 billion, be spent to help households suffering most from a carbon consumption penalty.
"We have much to contribute and much to lose as we face the diabolical policy challenge,'' he said.
Prof Garnaut told the National Press Club in Canberra: "Climate change presents a new kind of challenge.
"It is long-term, rather than immediate, in both its impacts and its remedies.''
A trading scheme "may have large and regressive effects on the distribution of income'', his 600-page report said.
"Effective management of this issue is going to be crucial to the success of the emissions trading scheme,'' it said.
The report said low-income earners would be particularly hit because they spent a bigger share of their incomes on emission-intensive products.
Prof Garnaut recommended that half the revenue from carbon permits be devoted to compensating households, such as paying for energy-efficiency measures in the home.