Senior climate change advisor to the Prime Minister Ross Garnaut has called for the establishment of an independent umpire with the authority to force the federal government to make alterations to emissions targets.

 

As part of final report into climate change, Professor Garnaut recommended the creation of a statutory body to prevent policy being unduly interfered with by special interest groups and lobbies.

 

The proposed umpire would set emissions targets and trading caps separately from government policy makers, forcing the federal government to create policy around its findings. 

 

The body would also have the authority to determine if the agriculture industry would be answerable to a carbon pricing scheme, while also setting trading caps – the number of permits that can be bought or sold in the market place – and set their price according to the international market.

 

Professor Garnaut also found that the implementation of a carbon tax would raise $11.5 billion in its first year of operation, assuming that carbon would be priced at $26 per tonne, with a possibility of rising to $30 per tonne after the implementation of a full emissions trading scheme (ETS) by 2015.

 

The release of Professor Garnaut’s report comes as the federal government hopes to implement a carbon tax on 1000 of Australia’s heaviest polluting companies, with the aim of establishing a full ETS within three years of the 2012 starting date.

 

Under the proposed scheme by Professor Garnaut, the majority of the funds raised by such an initial tax would be re-injected into households.

 

The government, which has come under increasing fire from the opposition over the tax, will likely use the findings to counter the opposition’s claims that such a tax would pass on higher costs to households.

 

However, Professor Garnaut has criticized the government’s plan to reduce its emissions to 5 per cent less than 2000 levels, saying that such a target is insufficient in dealing with the problem of climate change and recommends a more ambitious target in its place.

 

“There will be no success in mitigation at a nation or international level, without good governance” Professor Garnaut said in his report.

 

“It is easy, indeed natural, for vested interests to capture policy and for the ultimate reasons for policy, to be forgotten. Scheme governance has implications for the efficiency, stability and credibility of the emissions trading scheme”

 

Overall, the final findings of Garnaut’s report are as follows

  • $11.5 billion to be raised by first year of carbon tax provided carbon is valued at $26 per tonne
  • There should be the establishment of an independent body to prevent vested interests and lobby groups from derailing policy.
  • 1000 of the top polluting companies to be levied with carbon tax
  • Increase tax-free threshold from $6,000 to $25,000 for incomes under $80,000
  • Tax assistance for companies to fall to 20% of tax by 2020.
  • Full CTS by 2015

 

The report has resulted in a spat between Mr Garnaut and the Business Council of Australia (BCA) who have accused Mr Garnaut of possessing an anti-manufacturing agenda.

 

The BCA has urged the starting price of carbon to be dropped to $10 a tonne to allow industry to fully adapt to changing tax circumstances.

 

http://www.garnautreview.org.au/update-2011/garnaut-review-2011/garnaut-review-2011.pdf