Herald Sun
By: Gerard McManus
Australians will pay more for petrol, power, houses and food under a blueprint for a carbon emissions scheme unveiled yesterday.
Describing climate change as a diabolical policy problem for the Federal Government, review author Prof Ross Garnaut said Australia's way of life was under threat unless painful action was taken quickly.
Drawcard tourist destinations such as the Great Barrier Reef and Kakadu would be lost, and the nation's food bowl -- the Murray-Darling Basin -- was at risk of drying up by 2100, he said.
He claimed 4000 people a year would die in Queensland from heatwaves caused by climate change.
The solution, Prof Garnaut said, was to act early -- before other developing nations, which might not take up the challenge.
"The risk can be substantially reduced by strong and early action by all major economies,'' Prof Garnaut said in a speech to the National Press Club.
"Without that action it is probable that Australians over the 21st century and beyond will experience disruption in their prosperity and enjoyment of life.''
Releasing his landmark draft review, Prof Garnaut said:
AUSTRALIA had to act because of its comparative wealth and because it would potentially be hurt more than other developed countries by climate change.
THE Government should introduce a broad emissions trading scheme by 2010 that caps the amount of carbon allowed to be released into the atmosphere.
HALF of the taxes from the sale of carbon permits (up to $18 billion a year according to some predictions) should go to low-income households.
INDUSTRIES affected by the scheme would get 30 per cent of the taxes raised, while research and development in new technology would get 20 per cent of the taxes raised.
PROF Garnaut said low-income households spent a much higher proportion of their income on electricity, gas and petrol than wealthier families, and therefore needed to be compensated.
HE said regions such as the Latrobe Valley might also need adjustment packages if technology to bury carbon proved economically unviable.
The 600-page Garnaut review says a carbon scheme would force up the price of electricity, gas, petrol, diesel, chemicals and fertiliser. This would increase the price of manufactured goods such as cement, steel, paper and plastic.
"As well as affecting consumer prices, the carbon price will be felt in other ways. For example, it may affect firms' profits, and wages,'' the report warns.
Prof Garnaut conceded that superannuation funds that invested in heavily carbon-dependent industries might also suffer. But he denied his recommendations would dent the Government's standing in the electorate. He argued there were political advantages in taking action, and said Australians were more open to tackling climate change than they were to the opening up of the economy in the 1980s. But he said both sides of politics needed to support the scheme for it to be accepted.
The Government responded by saying it was not bound by the Garnaut recommendations and would release its own discussion paper in a fortnight. But Federal Climate Change Minister Penny Wong said there would be compensation for implementing an emissions scheme.
"We will ensure that there are measures in place to assist Australian households with the impact of a carbon price,'' Senator Wong said.
Opposition Leader Brendan Nelson said he broadly supported an emissions scheme, but opposed any higher taxes on petrol.
"We believe its extremely important that . . . Australian motorists be protected with no new taxes on petrol,'' he said.
The Garnaut report recommends transport must be part of an emissions trading scheme.
"What this is all about is encouraging people to economise on activities that are intensive in emissions,'' Prof Garnaut said.
Agriculture -- which produces up to a quarter of Australia's greenhouse gases -- will initially escape being part of an emissions scheme.
The review ignored nuclear power as an energy alternative because it was off the Government's agenda.
The final report will be released at the end of September.