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Will cutting emissions expose our trade?

Professor Ross Garnaut’s Climate Change Review suggests cutting emissions 25 per cent on 2000 levels by 2020, however the Australian Industry Group (Ai Group) says this will seriously hurt our economy.

The final copy of the Climate Change Review authored by Professor Ross Garnaut suggests it is possible for Australia to become a “low-emissions economy” by 2048, with the alternative proving detrimental for our society. The Ai Group, however, says this goal is too ambitious, especially in the absence of similar plans from other major countries.

According to the Ai Group, if Australia moved to put into place an emissions-lowering plan before other countries, it would expose our trade industries and make them vulnerable, with strong consequences for the economy.

The Garnaut Climate Change Review was commissioned by the Australian government to examine the impacts, challenges and opportunities of climate change for Australia. A Draft Report was released on 4th July 2008, with the Final Report released on 30th September 2008.

The report suggests guidelines for a plan to lower the country’s emissions, which if taken-up by the government will no doubt have a strong impact on manufacturing and process engineering companies in the coming years. According to the report, the entire country must comply with a set of suggested ‘green’ practices if our society hopes to continue prospering, gaining an ideal concentration of 450ppm in the atmosphere.

“There is a path to Australia being a low-emissions economy within around 40 years, consistently with continuing strong growth in material living standards,” said Professor Garnaut in the Review.

“The Review has recommended a necessary and sufficient mitigation policy package that will facilitate the effective, efficient and equitable transformation for Australia to a low-emissions economy. Without strong, effective and early action by all major economies, it is probable that Australians, over the 21st century and beyond, will experience disruption in their enjoyment of life and increasingly of their prosperity.”

Garnaut suggests an international agreement for the post-Kyoto period from 2013 for all major economies if there is to be a chance of containing emissions to necessary levels.

According to the report, Australia’s economy would be slashed by 0.2 per cent by 2020 if we followed Garnaut’s advice.

However, Ai Group chief executive, Heather Ridout, says that to cut the economy by this much would be detrimental.

“Garnaut’s more ambitious proposal for a 25 per cent reduction on 2000 levels would require a staggering fall in emissions intensity of more than one third. It is very difficult to see how this could be achieved by 2020 without inflicting severe damage on the economy,” she said.

Even if we slashed emissions by a comparatively small 5 per cent, the economy would struggle, according to Ridout. Also, our trade exposed industries would either suffer from exposure or would require “strong protections”.

“A reduction of emissions anywhere in this range by 2020 would require a very considerable effort. The reduction of 5 per cent of 2000 levels by 2020 in the absence of global action would be particularly difficult. Achieving anywhere near this sort of target before all the major emitters made similar commitments would require very strong protections for our trade exposed industries,” she said.

For more information about the Garnaut Climate Change Review, visit

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