Ken Henry, Bernie Fraser and Ross Garnaut are lions of Australian economics. They carry more intellectual and institutional weight then most of us mere mortals put together. So if they broadly agree on any course of action we should all probably sit up and listen, right? In the past seven days all three have, in different ways, supported a price on carbon to reduce greenhouse gas emissions that are warming the planet. Bernie Fraser is a former governor of the Reserve Bank of Australia. He now heads the independent Climate Change Authority and told the National Press Club on Thursday carbon pricing should be part of the policy toolbox to tackle emissions. Ross Garnaut is a former senior economic adviser to Prime Minister Bob Hawke and ambassador to China. He has studied climate change policy for many years, carrying out two major government reviews that concluded the most economically efficient way to cut greenhouse gases was an emissions trading scheme. On Friday he told a Senate committee inquiry the Abbott governments carbon pricing alternative – it wants to replace it with a direct action scheme – will cost $4 to $5 billion more than it has budgeted to meet Australias current target to cut emissions by five per cent by 2020. Environment Minister Greg Hunt insists the money set aside for direct action – which will pay industry and farmers to cut emissions – will meet the target. Ken Henry is a former secretary of Treasury, who helped guide Australia through the global financial crisis. He was asked on 7.30 on Wednesday night whether Garnaut or Hunt was right. Well, look, Ross has spent long time looking at these issues. I wouldnt question Ross on these issues, he said. Henry also said that if Australia is going to reduce its emissions – a commitment made by both major parties – then to do it through any mechanism but an emissions trading scheme would be necessarily be more damaging on the Australian economy. Prime Minister Tony Abbott on Thursday declared his government was charting a new economic course. We are placing our stamp on the economic policy of the country and let there be no doubt, let there be no doubt, that Australias policy direction changed very substantially back in September of last year, he said. Australia, at the official level, went from being a high-tax, high-regulating government to being a low-tax, deregulating government. But it is one thing to put your stamp on economic policy. It is another to blindly dismiss the views of senior economists on issues as important as this. By dumping carbon pricing for direct action that is in effect what they are doing. Henry, Fraser and Garnaut are hardly alone in their views – most senior economists support carbon pricing as the best mechanism to cut emissions. And all three men are serious, economically minded people. Ignore them at your peril.
Posted on: Thu, 13 Mar 2014 05:27:42 +0000
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