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A brief submission to the Climate Change Committee

By Geoff Carmody - posted Thursday, 28 October 2010


Those advocating policies to reduce greenhouse gas emissions are pestered to reveal their views on the effects of human activities on climate change.

Well, I don't know for sure.  I'm just an economist.  I'm told the science is subject to uncertainty.  I start by assuming there might be a man-made problem.  Given that assumption, what's the most cost-effective way to respond?  That's a question we economists can examine.

One approach reviews positions on the science, and derives cost-effective policy responses for each.  Experts can then haggle over the resulting policy smorgasbord.

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Three positions define the global warming science spectrum. 

First, some say there's no man-made global warming problem.  Second, others say most global warming is man-made.  Third, others aren't sure if human influences are affecting the climate, and/or, if they are, by how much.

The first group is often labelled "climate change sceptics" or "climate change deniers".   The second group is labelled "believers".  The third group is sometimes also labelled "sceptics" (hinting they're "deniers"). 

Scepticism is respectable.  It is essential for scientific advancement.  In the climate policy debate, this label is applied more like a "heresy" indictment.  This pushes the scientific approach away from evidence-based analysis towards a more "dark ages" approach, where, if you don't believe what the second group believe, you should be ignored, silenced, ostracised (and certainly not funded).

The ambitions of the Government notwithstanding, we are likely to be stuck with this spectrum of views, rather than getting a "consensus", for the foreseeable future.

This spectrum allows us to develop a matching smorgasbord of policy responses.

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The logical policy response for the first group is to do nothing.  To argue for any other policy approach makes no sense, and exposes a lack of courage of proponents" convictions.

For the second group, implementation of the most cost-effective policy to reduce greenhouse gas emissions ASAP is the sensible position.

For the third group, a risk management approach is prudent.  We only have one planet.  If there is a significant man-made global warming effect, some "policy insurance" is warranted.  The insurance policy should use the most cost-effective measures to moderate greenhouse gas emissions.

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This article was first published in The Australian on October 25, 2010



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About the Author

Geoff Carmody is Director, Geoff Carmody & Associates, a former co-founder of Access Economics, and before that was a senior officer in the Commonwealth Treasury. He favours a national consumption-based climate policy, preferably using a carbon tax to put a price on carbon. He has prepared papers entitled Effective climate change policy: the seven Cs. Paper #1: Some design principles for evaluating greenhouse gas abatement policies. Paper #2: Implementing design principles for effective climate change policy. Paper #3: ETS or carbon tax?

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