TAX cuts and welfare reform should be offered to dampen the impact of a new emissions trading scheme, according to the landmark Garnaut climate change report released today.
Kevin Rudd’s chief climate change adviser, Ross Garnaut, has today urged the Government to pass on the lion’s share of revenue raised through the new scheme, which will put a price on carbon emissions when it starts in 2010.
He also warns some of Australia’s most celebrated tourist destinations and natural wonders – including the Great Barrier Reef and the wetlands of Kakadu in the Northern Territory – could be lost if action is not taken.
The report paints a bleak picture of the international community’s failure to take earlier action on climate change, warning the development of global pacts to create a more level playing field for key Australian industries is an “urgent matter”.
While Professor Garnaut is fighting for the broadest possible ETS, covering as many industries as possible, he also concedes rising petrol prices are already having an impact on consumer behaviour.
Amid warnings that Mr Rudd’s 2010 timetable for a new trading scheme is a mission impossible, his report also concedes that “much anxiety” was expressed about the possibility of an unconstrained ETS generating high and unstable prices in the early years.
“While there are substantial advantages in moving directly to the unconstrained operation of the proposed emissions trading scheme in 2010, the review accepts there is a legitimate second best case for a fixed price for permits in the early years,” he states.