In April, the Intergovernmental Panel on Climate Change (IPCC) released a report based on over 1200 future projection scenarios. It concluded that if current levels of greenhouse gas emissions are not reduced by 40% to 70% by 2050, global temperatures will rise by between 3.7 and 4.8 degrees Celsius.
So what is Australia doing to prepare for the necessary and seemingly inevitable transition to a low carbon economy?
Well, less than a week after these dire forecasts, the Palmer United party announced that it would block the Coalition's 'Direct Action Plan' in the Senate. And the budget has confirmed that the Abbott Government will continue to push for the abolition of the Carbon tax.
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So apparently, we could be doing very little.
As our nation's leaders squabble over the most economical method of reducing carbon emissions, there seems to be a major disregard for the significant long-term costs associated with delayed investment in green growth.
Yes, investing in a transition to a low carbon economy will cost our nation in the short-term. Economists agree that carbon taxes, emissions trading schemes, and long-term investment in energy efficiency research will come at a cost. However these costs are not as high as initial estimates, and not nearly as high as the future costs caused by delaying the introduction of carbon reducing policies.
According to Ottmar Edenhofer, co-chair of a Berlin meeting of the IPCC, "We have a window of opportunity for the next decade (to act at moderate costs). I'm not saying it's costless. I'm not saying climate policy is a free lunch, but it's a lunch worthwhile to buy."
The IPCC report proposed that if introduced now, even aggressive carbon emission mitigation policies would only result in an annual Gross Domestic Product (GDP) growth reduction from an estimated 2% to 1.94% each year up to 2100. However, the longer these policies are delayed, the less effective and more expensive to implement they will become.
So in the words of Joe Hockey, "Our future depends on what we, as a nation, do today".
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So what should be done?
As a member country for over 50 years, Australia has contributed millions of tax payer dollars to theOrganisation for Economic Co-Operation and Development (OECD), with significant benefit and outcomes to date. In the last four years, the OECD has released multiple reports that have summarised the most effective methods for Australia to begin making a transition to low-carbon economies. Primarily, the organisation has focused upon the need for Australia to develop its' green growth industry through fostering innovation.
Innovation will be the key to a low carbon future. Investing in the refinement and creation of clean technology today will reduce the cost and improve the efficiency of a transition to low-carbon economies. Despite this, only 2.5% of patents applied for worldwide are environmentally related. Clearly, further research and development is necessary. So who should make the investment- the public or private sector?
I was recently told, by a politician, that"if you want something done properly- don't get the government to do it". And it is true. For our society to become carbon neutral by the end of the century, the brunt of the load must be carried by the private sector. It is unrealistic to hope for anything else.
However, the simple fact of the matter is that the private sector is not changing quickly enough. While many green technologies such as solar and wind power have advanced significantly, further research is needed on these and others before the private sector will invest in them as the most economically viable and sustainable option.
Long term and high risk green innovation research and development needs to be subsidised by governments, according to the OECD, as it is simply unreasonable to expect that the private sector will make such investments.
Another question often raised when discussing climate change mitigation policies is why Australia ought to do the heavy lifting when our emissions are dwarfed by those of other countries?
Firstly, Australians have the fifth highest per capita emissions in the world, so we clearly need to make some changes. Secondly, international co-operation and collaboration will undoubtedly be an integral part of climate change minimisation. Changes and innovation will need to be undertaken as a global initiative.
Hence, it seems necessary to establish an annual forum in which leading green growth scientists, economists, policy makers, entrepreneurs and investors can gather to share, discuss, collaborate and invest in cutting edge green technologies. By doing so, new ideas can be shared and developed and introduced more quickly by both the public and private sectors.
This is simply one idea of many to stimulate the green growth industry. There are hundreds of policies that have been pitched, researched and recommended in the areas of education, research and development, foreign aid, etc. to accelerate the transition to low carbon economies.
While it may never be clear which of these will be the most economically viable, it is evident that delaying action will, in the long-run, cost billions of dollars and potentially an inconceivable number of other resources.