Business leaders demand CO2 caps

Delayed action damaging: They said delaying action by nine years would limit gross domestic product growth to an average of 1.9 per cent up to 2050 and could lead to a major disruptive shock to the Australian economy.

The post-Kyoto healing process: The chief executives of BP Australia, Westpac, Insurance Australia Group, Origin Energy, Swiss Re, Visy Industries and the Australian Conservation Foundation form the coalition. It is the strongest attempt yet to unite the business community and fix the damaging split over some sections’ support for Australia’s refusal to sign the Kyoto treaty on emission reductions.

Aust business needs to be seen to take positive stance on emissions: "Climate change is a real risk for business," Westpac’s David Morgan said. The coalition warns that without action big areas of Australia will be uninsurable and key industries like tourism and agriculture could be put at extreme risk.

Carbon trading a front runner in proposed measures: Research commissioned by the coalition suggests Australia could achieve the cuts by introducing a national market-based carbon pricing mechanism; publicly stating that government will not provide an indemnity against future carbon risks; building on incentives for energy efficient building codes and appliances; and by encouraging investment in emerging technology.

No to nuclear generation (but keep selling uranium overseas): But it also says there is no need for nuclear energy. "That’s because nuclear energy was not considered cost effective for Australia," Origin Energy’s Grant King said. "No doubt we will keep exporting it, but economically it doesn’t work for Australia."

Kyoto club membership not necessary: The group also saw no need to ratify the Kyoto Protocol. Australia’s current performance in cutting emissions is only kept close to the Kyoto targets by curbing land clearing. Previous modelling done by ABARE has shown that constraining carbon emissions could cost Australia between 1.2 per cent of GDP to 6.2 per cent by 2050.

Early action the key: But the new report – with economic modelling done by the Allen Consulting Group and climate impacts determined by the CSIRO – says a 60 per cent reduction in carbon emissions is possible while maintaining strong economic growth, with real GDP averaging 2.1 per cent through to 2050 if early action is taken.

Slow start, more long-term pain: This compares with delaying action until 2022, which would result in lower GDP growth by an average of 0.2 per cent through to 2050, and concentrate any disruptive shocks over a shorter period. Under the early-action scenario 250,000 more jobs would be created compared with the late-action scenario.

The Australian Financial Review, 7/4/2006, p. 5

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