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SELECT COMMITTEE ON CLIMATE POLICY
15/04/2009
Emissions trading and reducing carbon pollution

CHAIR —I welcome you to the Senate Select Committee on Climate Change and invite you all to make a short opening statement—up to five minutes in duration. I will try to limit that because I am certain there will be a great deal of interest in what you have to say. We have a notional finishing time but we have been relatively flexible about that. That will depend on your time as much as on our time. I am sure you will understand the vagaries of the Senate process. Potentially people have to fly to other places. Thank you for coming here today. I will ask Mr Macintosh to make a few opening statements, if he is prepared to do so.

Mr Macintosh —I will keep this brief. I state clearly that there seems to be a disjunct in what has been put forward in the government’s quite paper. They government emphasised in its white paper that it would like to pursue a 450 parts per million CO2-e outcome and it has put forward an emissions target range that seems to be inconsistent with achieving that PPM outcome. If the government wants to achieve a 450 part million CO2 outcome, the bear minimum to which Australia can commit is at least 30 per cent. Even then I think that is a rather optimist target. I will leave the rest to the discussion that follows. I hand over to Dr Pearman.

CHAIR —At the outset I remind everyone that we are not talking specifically about the CPRS as part of this process; we are talking about climate change in a much broader sense in accordance with the terms of reference of the inquiry. Effectively, this is a roundtable on the science. I make that point so that we are not stuck on the CPRS. I know that it is a factor in the discussions that are going on at the moment, but this committee is looking at things in a much broader sense. That is the way in which we are looking to report on this matter. Consider that when you are making your comments.

Senator MILNE —I ask Mr Macintosh to clarify what he just said. He referred to a figure of 30 per cent. I take it that by 2020 that will be 30 per cent below the 1990 levels?

Mr Macintosh —No, it would be 30 per cent below the 2000 levels.

Senator MILNE —By 2020?

Mr Macintosh —By 2020. It is the bare minimum.

Dr Pearman —I will also try to be brief. I was involved in writing a background paper for Treasury prior to the release of its paper in October last year. If people have not seen that it is something that is worth reading. Treasury attempted in that paper to describe the risks for Australia for different global targets. I think that the main outcome in that paper was that it was clear that 450 was the only target within the range of targets that was considered in the paper that did not lead to really vulnerable situations for many aspects of the Australian community. The main areas of concern for Australia that were indicated in that paper were the availability of water, the security of the coasts, the survival of the Australian biodiversity and the vulnerability that leads from any of those issues.

Given that I wrote that around 18 months ago, since then the rate at which changes are being observed is faster than was understood to be case. The rate of de-glaciation appears to be faster than we thought it was at that stage. Observed biological changes, in particular in the distribution of species around the world, are much clearer now and it is faster than we anticipated. The sea level rise is at the higher end of the range of projections that were being made only a few years ago. All that means we will have to address this from a risk point of view. We could argue all day about whether we know for certain any aspect of the climate change issue.

In reality, in many cases we will not. As was pointed out in the previous session, this is about managing risk and trying to identify our exposure. There is weighing the probability of something happening against the magnitude of something that does happen. Some of the stories that science is telling the broader community is that some of the magnitudes are large; therefore, we cannot wait until we are necessarily 100 per certain.

Someone with a lot of confidence made the comment earlier that should we blame the bushfires in Victoria, the drought in Melbourne or in the south-west of Western Australia. From a scientific perspective those hypotheses will be proven only if we are 99 per cent sure that we have tested the hypotheses properly. We cannot give you that guarantee. However, if you said to me as a citizen that Victoria should be trying to manage the fact that it has lost water and that that might be due to climate change I would want it to act on that as that is sensible risk management.

With regard to the CPRS I wish to make some main points. I refer, first to the urgency. As Andrew pointed out earlier, I do not think that the CPRS fully appreciates the urgency of the matter, whether it is for Australia or the globe. I refer, second, to the targets. The figure of 450 was the lowest target that I had in my paper. In my view it should be 350 and we have well and truly passed that. A growing number of scientists feel that way now. Even the scientists have underestimated the degree to which natural ecosystems of the world are dependent on relatively small shifts in a climate system. As far as energy options are concerned, the CPRS is an important component in responding to this, but it needs to reflect the urgency. It also needs to reflect that we might change our position on this.

In the next 18 months the science might harden even further, so we do not want clauses within the CPRS that lock things in too long. However, on the other hand we must respect the fact that businesses need some level of assurance. I understand that but those sorts of things must be considered. Energy efficiency has to be on the agenda, as do renewable targets or alternative targets, and the concept of additionality is important. We must be sure that we are getting investments and that alternative energy sources are occurring irrespective of the CPRS. We do not depend entirely on market forces to get that. If that does not occur we will not get the diversity of options available to us that will ensure resilience over a long time.

No matter how many scientists stand and up and say that they have the answer, whether it is in biochar, geosequestration, or something like that, there is uncertainty about the technological feasibility, the economics of each of those options and the timescales within which they can be delivered. That is the real world. We have to manage that and realise that that is the situation. The way to manage it is to be diverse and to keep our options open.

Prof. Steffen —I will be brief as it is important to have time for questions and discussions. I will make two points that come from the recent climate change congress in Copenhagen where we had about 2,500 researchers from around the world, including a strong contingent from Australia. First, I reiterate what Graeme Pearman just said. We have good evidence that shows that the climate system is tracking at the upper level of the IPCC projections. We now have enough time and enough data. I would say that we need a couple of decades of data before we can start seeing reliable trends. The first of these projections came out in about 1990, so we are just getting there. They are now showing that the emissions are tracking at the upper level of the projections made 20 years ago.

In keeping with that, temperature and sea levels are also tracking at or near those upper levels of projections. That carries with it the higher risk of things happening. As Graeme just said, it is very much a risk scheme. We cannot tell you for sure whether we are committed to losing the Greenland ice sheet. We know that it is probably somewhere between a 1½ degrees and three degrees of global mean temperature rise, bearing in mind that there are higher temperature rises in the high latitudes and the evidence seems to suggest that. As we track on the upper levels we increase the risk that we will be committed to losing the entire Greenland ice sheet over the timeframe that is still being debated in the scientific community.

Another example of high risk is activating new sources of carbon from the natural systems or weakening present day sinks in the natural systems. I will say no more about that because Dr Raupach knows more about it than I do. The second major point that came out of Copenhagen was a discussion about this two degree temperature target as defining dangerous climate change. The EEU has been talking about this for a number of years and the scientific community has been debating it. I have a couple of things to say about that. Ultimately, that is a value judgement for society as to what is dangerous and what is not. We, as scientists, cannot make that judgement for the general public or for politicians. We can inform them and that is what we are attempting to do.

The feeling coming out of Copenhagen was that, given the risks of where we tracking, and given a better understanding of risks at various temperature levels, two degrees is an upper limit. It is not some average that you let slide by; it is something that you have to stabilise if you want to minimise risks. There was a vigorous debate, including a debate on the panel, with the prime minister of Denmark about how vigorously we should stick to that two degree limit, with some scientists arguing now that it ought to go down about 1½ degrees or so. There is a big debate around where dangerous climate change lies. However, the drift of the debate is to solidify those two degrees as an upper limit, not as some sort of vague average for which we should aim.

Prof. Karoly —I will follow on from what Professor Steffen said by adding some information from Dr Pearman and Professor Steffen. It is important to understand in the content of any level of greenhouse gas emissions and stabilisation that there is not a single, well-known specific temperature response to the climate system. In fact, there is a range of possible responses because we do not know exactly how the climate system will respond. The information that I wish to talk about is in the submission that Peter Cosier and I made to the select committee, which I think has been posted on the website; I am not sure.

In particular, for a 450 parts per million carbon dioxide equivalent stabilisation there is a 50 per cent probability of warming greater than two degrees and there is a five per cent probability of global average warming greater than four degrees. So we do not know for sure because we have uncertain responses. In a risk-averse community you would probably seek to have a lower chance of exceeding the two degree warming threshold than 50 per cent. In fact, most people would say that that risk is unacceptable. In order to reduce the risk you have to stabilise at a lower stabilisation level. Another important point to understand is that the concentrations of greenhouse gases in the atmosphere exceeded 450 parts per million carbon dioxide equivalent in 2003. In 2005 there were 450 parts per million CO2 equivalent, and last year there were 460 parts per million C02 equivalent. We have already exceeded the stabilisation level. The only way that we can achieve those stabilisation levels is by removing greenhouse gases from the atmosphere through efficient removal processes and not further emissions.

Referring to long-term stabilisation we have to reduce global emissions to a level where there can be natural uptake and we have to remove some of the emissions that have been put into the atmosphere. That means that urgent reductions are required. The best estimate for the level of global emission reductions is between 50 and 85 per cent global emission reductions based on the IPCC assessments by 2050 and an equal per capita approach globally would suggest 90 per cent to 97 per cent emissions reductions for Australia by 2050.

Senator BOSWELL —Do we have to get our emissions down by 97 per cent?

Prof. Karoly —Between 90 per cent and 97 per cent if you accept a converge and contract approach, or equal per capita emissions across the world if you want to achieve a 450 parts per million CO2 stabilisation target. At 450 parts per million we still have a 50 per cent risk of exceeding two degrees of warming.

Mr Cosier —I would like to make two additional comments. As other members have said, climate change policy is about risk assessment. One half of that risk assessment is a science and the other half is economics. I simply highlight the Treasury analysis last year, which is easily the most sophisticated economic analysis of climate change mitigation in the world.

Senator BOSWELL —Was that the green paper?

Mr Cosier —No, this was the Treasury paper on mitigation and climate change, a copy of which I can show you. That Treasury paper simply shows how economically feasible it is to reach a 450 target—what many would consider an almost unachievable target of 450 parts per million—provided we act early and provided we give industry time to undertake that energy transition. Second, as Professor Karoly said, the only way we can possibly achieve a 450 target, given the fact that we have already exceeded it, is to reduce emissions from the atmosphere. One of the great opportunities that we see, both globally and in Australia, is the opportunity of using terrestrial carbon, that is, trees and soil carbon, to contribute to a greenhouse gas emission level reduction in the atmosphere.

According to a McKinsey study done last year, we believe that terrestrial carbon, that is, tree planting and increasing soil carbon, can contribute between 25 per cent and 30 per cent of the solution to climate change mitigation.

Senator FEENEY —Can you cite that study a bit more?

Mr Cosier —Yes. It is in our paper and it is referenced in our paper.

Senator BOSWELL —How many hectares would you need?

Mr Cosier —ABARE’s analysis last year as part of the Treasury analysis suggested that under the CPRS we could open up the opportunity of between about five to 26 million hectares of tree planting in both commercial plantations and environmental plantings. To give you some idea of scale, that is equivalent to about 20 per cent of the Murray-Darling Basin. The argument against that is that we need to use our agricultural lands to grow food and fibre, which is an obvious answer, given that the world population is growing and demand for food and fibre is growing. Of course the challenge is that not all farms have 100 productive use of their farmland for production. There are large areas of Australian farms—10 per cent or 15 per cent of most farms—that we think could be used productively for revegetation and that could contribute to landscape health without dramatically affecting the productive capacity of those farming systems.

CHAIR —The forestry assumptions in the paper that you have given us are based on that ABARE study.

Mr Cosier —They are based on the ABARE study, yes, Senator. The second opportunity with the use of terrestrial carbon is the climate change adaptation in Australia. With strategic plantings of environmental plantings it can help to repair degraded river systems by restoring and riparian vegetation along river systems and also reconnecting the fragmented landscape that we have done in Australia over the past 200 years, in particular, in southern Australia. Terrestrial carbon can help with the climate change mitigation challenge first by providing a cheap source of carbon and second it can provide a fantastic economic driver for us in our challenge with climate change adaptation.

The third point relating to terrestrial carbon is that it is not only restricted to Australian landscapes. There are massive opportunities in developing countries, in particular, in tropical countries, for reducing the amount of land clearing in tropical rainforests, which at the moment are contributing emitting between eight per cent and 20 per cent of global greenhouse gas emissions.

Senator BOSWELL —I must have misunderstood you. You are saying that the rainforests are contributing to greenhouse gas emissions.

Mr Cosier —By clearing the rainforests that releases greenhouse gases into the atmosphere. At the moment that tropical rainforest clearing is contributing to global emissions of the order of eight per cent to 20 per cent.

Senator BOSWELL —Where is this clearly taking place?

Mr Cosier —In Indonesia, New Guinea, the Congo and the Amazon Basin.

CHAIR —Is that based on non-replacement?

Mr Cosier —Yes.

Senator FEENEY —I think our confusion arose from your description. I thought you were talk exclusively about the Pacific Islands as opposed to Indonesians, Malaysia and so forth.

Senator MILNE —To clarify, you talked about plantings; you did not talk about logging of primary forests or ongoing land clearance in Australia? If you are talking about terrestrial carbon surely you are also talking about protecting existing stores and not only planting more.

Mr Cosier —I would totally agree with that, Senator. In Professor Garnaut’s report last year, chapter 22 provided a table of potential biosequestration options. One of those was forest management and another is avoided deforestation as well afforestation, which I was referring to.

CHAIR —Chapter 22. Thank you. Dr Raupach?

Dr Raupach —I would just like to add one or two points to what has already been said. The first is the reasons why two degrees needs to be treated as a form target rather than an ambit claim for the protection of climate change. Those relate to feedbacks or vulnerabilities in the climate system, meaning processes by which climate change accelerates as climate change proceeds; in other words, it feeds on itself.

Two examples are that at the moment, and since the beginning of the industrial revolution, more than half of the carbon dioxide put into the air by humankind has been absorbed by land and ocean sinks. That proportion has been about 55 per cent averaged over the past 50 years. That fraction is decreasing slowly. It has come down now to about 52 per cent. The implication is that we are getting our climate change at less of a discount, and that more of the carbon dioxide is staying to the atmosphere. This is a natural phenomenon. It is something which is quite outside our ability to management. It is one of the factors that causes climate change to proceed more rapidly as greater levels of warming are reached.

A second example is the release of greenhouse gases, and the biggest concerned is methane from melting permafrost. As several people already have said, warming is proceeding faster in the Arctic than anywhere else. That is an observed fact. The consequence is that permafrost is melting. The implication of that is that the vast stores of organic carbon that are contained in that permafrost are being mobilised into the atmosphere and released. One of the ways they are being released is as methane. Methane is a greenhouse gas that is 20 times more potent than is CO2.

These are two examples of ways that climate changed can feed on itself, and others relate to points that have already been made concerning the stability of ice sheets and the effect of warming on the brightness or the whiteness, if you like, of icy surfaces as ice melts. As the surfaces become darker, more radiation is absorbed. So that two degrees is a risk assessment that needs to take account of the fact that there are many processes which may accelerate climate change in the future. That is one of the reasons why Professor Karoly mentioned that, even at 450 parts per million CO2 equivalence stabilisation, there is a risk of five per of going well above two degrees—he mentioned four degrees—in temperature rise.

That leads to the next major point in our submission, which is the implication for setting thresholds on emissions. I would like to put to you a somewhat different view than the one often taken of reduction targets of, say, 80 per cent or 90 per cent by 2050. That view is that greenhouse gas emissions represent a finite non-renewable resource. We can carry this on for only so long. We can emit rapidly for now and attenuate very quickly, soon, or we can reduce our emissions more slowly and save up some of that quota, if you will, for later. A very generous assessment of that quota for CO2 is about 1,200 billion tonnes of CO2which is about 70 per cent of what has been emitted up to this point since the beginning of the industrial revolution. In other words, we are more than half-way past CO2on this ground.

This means that the strategy for global emissions reduction essentially is to define that limit and then find ways of staying within it, acknowledging that it is not possible for all countries to make their emissions reductions at the same rate. I will leave my comments at that point, thank you.

CHAIR —Senator Cameron?

Senator CAMERON —Witnesses, professors!

CHAIR —Do not be overwhelmed, Senator Cameron. We are all senators.

Senator CAMERON —I am nearly professored-out today, I must say. We had direct evidence from Professor Robert Carter—I am not sure whether you are aware of him—and Professor Stewart Franks in the previous session. Basically, a number of points were put. Professor Franks was fairly blunt and said it was all rubbish that CO2 was causing global warming. Professor Carter argued that there was no evidence of CO2 contributing to global warming and that, whereas all these scientists had gone to Copenhagen and researchers were this Copenhagen, there are two thousand other scientists in New York coming up with completely different propositions.

Also some documents that were left and charts showed—you cannot clearly see this, but perhaps you have seen it before—showing that actually we are not warming. That was tabled by Professor Carter. As politicians, we have to depend on the majority view of science in terms of what is happening. Do you have any views on either of the submissions that have been put to us as to why they are so right and you have got it so wrong, and you are caught up in this situation in which—I do not know how to describe this—you have all been fooled, and now you are fooling us. I think that was the tenor.

Prof. Karoly —Can I answer that?

Senator CAMERON —Yes.

Senator PRATT —You are not testing your own hypothesis.

CHAIR —Anyone who like to start is free to do so. I am quite happy to have a range of perspectives.

Prof. Karoly —My guess is that you will not get very much of a range of perspectives, but you may. First of all, Bob Carter and Stewart Franks are in fact in a minority of both scientist and climate scientists in Australia. In fact, neither of them is a climate scientist who publishes actively in the climate science literature.

Senator BOSWELL —That is not what they said. They said they did publish.

Prof. Karoly —Not in climate science literature. They publish in small journals.

Senator BOSWELLNature, and papers like that.

CHAIR —We do not need to get to that definition.

Senator BOSWELL —There is a claim being made that they are a bunch of bloody idiots.

Senator PRATT —It is not a climate science journal.

Senator BOSWELL —Not all wisdom resides in the people here.

Senator CAMERON —Point of order: Can the witnesses answer the questions?

Senator BOSWELL —Yes.

CHAIR —You can ask some questions in a minute, Senator Boswell. Your name is on the list, and be assured you will get your go.

Senator CAMERON —Be patient!

Prof. Karoly —Thank you, Senators. Usually the process would be to undertake comprehensive assessments of the published literature. The Intergovernmental Panel on Climate Change has done that. There is a wide range of evidence supporting conclusions of the Intergovernmental Panel on Climate Change both that increasing greenhouse gases have been the main factor contributing to warming of the climate system. Various surveys of scientists who publish in the peer-reviewed literature, including geologists and geoscientists, show that the vast majority of them support the conclusions of the IPCC.

All the major scientific academies, both in the developed countries and the developing world, also support conclusion of the Intergovernmental Panel on Climate Change and representatives. All the governments represented on the Intergovernmental Panel on Climate Change unanimously supported the conclusions, including the United States, Australia, Saudi Arabia, China, Russia. They all supported the conclusions of the Intergovernmental Panel on Climate Change. If they were at fault, people would win Nobel Prizes for demonstrating that the conclusions of the Intergovernmental Panel on Climate Change were wrong.

Senator CAMERON —So you do not think there either of the two witnesses are off to Sweden soon?

Prof. Karoly —Probably not this year, but they may be if their evidence and their results are shown to be proven through the test of time. However, most of their analysis, including their comments that their submissions show that the climate system has cooled, has provided some well-known results. Yes, the temperatures in 2008 globally were cooler than in 1998—and that is primarily due to natural variability of the climate system—but the temperatures in 2008 were in fact warmer than in any year prior to 1990. The decade of the 2000s was warmer than the decade of the 1990s, 1980s, or any decade prior to that through to 1850, and the last 50 years has been warmer than any 50-year period for at least the last millennium in global average temperatures. The climate system has warmed globally over the last century, but is slightly cooler in 2008 primarily due to natural variability. This is not unusual in terms the decade or time scales.

Prof. Steffen —I would like to reiterate what Professor Karoly has said and also point out a fundamental error in the arguments that Bob Carter and colleagues are making about the temperature change. They confuse the climate system with surface air temperature. There is a very big difference. Basically what greenhouse gases are doing are trapping more heat near the earth’s surface. That is distributed among the part of the earth’s system. The atmosphere that we are all worried about is actually a very small part of that as 80 per cent or more of the extra heat goes into the ocean.

If you want to know what is happening to the climate system, do not look at the atmosphere, look at the ocean. You will really see what is happening there. There is no cooling since 1998 in the ocean. In fact recent corrected measurements done by John Church and colleagues show that the ocean has warmed 50 per cent more than we had thought, once we got our sensors improved and their interpretation. The ocean records are absolutely clear. The earth’s climate system is warming. It continues to warm. There has been no cooling trends over the past 10 years.

As Professor Karoly said, the atmosphere is sort of a noisy residual of what goes on in the ocean. You can get patterns of variability driven by changes in ocean current, very subtle ones, that can be manifested as quite pronounced changes in the atmosphere. You have to understand the entire climate system to make statements like the climate is cooling or warming. Where it is absolutely critical that the climate system is warming, you can see the record quite clearly in the ocean temperature record.

Senator CAMERON —We can move off that issue, unless someone else wants to ask questions about it.

CHAIR —Does any one else want to make a comment on that particular point?

Dr Pearman —Just very briefly. Anyone can go to the Bureau of Meteorology website and dial in and get the trends for Australia and convince yourself. You do not have to depend on Bob Carter for that. Or if you want to, you can go to NASA or you can go the National Oceanic Administration or the Met office in the UK. All those records are available on the web and you can see for yourself what those trends are. I do not know what data he has shown you in that particular case. He made a comment today—I happened to be here just before the end—about the sensitivity of the temperature to increasing amounts of CO2 This is as if people do not understand the effect of increasing concentration on the absorption of energy. That has been known since the 1850s.

Of course, that is included in the calculations that are made by the climate scientists into the future. It is not linear. It does depend on how much you have, but in fact it is nowhere near as sensitive as he tried to make out in his presentation.

Mr Macintosh —I will make one presumably last point. An argument often made by Professor Carter, Professor Franks and their colleagues concerning climate change is that temperature rises in the geological record and the ice core record have been observed to happen before CO2 rises occur, and therefore that proves that carbon dioxide responds to temperature, rather than the other way round. Can I just ask whether this was argument made?

CHAIR —Yes. This argument was put to us.

Mr Macintosh —The answer to the argument is that temperature and carbon dioxide in the atmosphere form a coupled system; each affects the other. That means that if temperature is pushed, as happened in the last million years through orbital fluctuations and orbital variations of the earth around the sun, then the system responds, and CO2 responds in its turn. If at the moment CO2 is being pushed, the temperature naturally follows along. To say that that observation demonstrates that temperature causes CO2rise misses completely the fact that this is a coupled system.

Senator FEENEY —On that very point, have there been examples in the historical record of where carbon has come before or has driven the rise in temperature rather than the other way round?

Mr Macintosh —What happens is that you cannot explain the whole of the temperature rise that you see by the rather weak orbital variations purely on the basis of the change in the sun’s radiation falling on the earth. That is the direct temperature effect. You have to invoke other factors. One of those factors is carbon dioxide, and another very important one is ice.

Prof. Steffen —An example in the more distant past is called the PETM, paleocene thermal maximum, where the best explanation of a very sharp spike in temperature was the fact that the earth burped, so to speak. There was a huge outburst of methane from natural causes, which led to the spike in temperature. As you probably well know, methane is a very strong greenhouse gas. There are examples in the past where greenhouse gases led the temperature increase. You find both. As Dr Raupach said, it is a coupled system. We understand that quite well.

Senator CAMERON —I asked both Professor Franks and Professor Carter whether they had received any grants or funding from polluting industries. I gave a commitment that I would ask a similar question here as to whether there are any grants or funding from green groups.

Prof. Karoly —What polluting industries?

Senator CAMERON —I do not know what he means by green groups, but I did indicate that I would ask the question.

Prof. Karoly —I have received significant funding from the oil industry. I held a Shell scholarship from the Shell Company that funded my graduate degree in the UK, and I held a position in the United States funded by the Williams Corporation, which was endowed chair of the University of Oklahoma. I do not think they influenced my views in terms of my scientific research. I have received no funding directly or indirectly for research from any green groups.

Senator CAMERON —I am happy for you to take that on notice, if the Chair is happy.

CHAIR —I think, to save us time, that is a good move.

Mr Macintosh —I would like to add one other point in response to Senator Cameron’s first question. Professor Carter held up a graph that showed the relationship between PBM levels and temperature with logarithmic, and he made a lot of them. That is somewhat of a fallacy in that the relationship is not smoothly logarithmic, as Professor Pearman was hinting at. Also another important point is that the relationship between emissions and temperature response is not smoothly logarithmic; nor is the relationship between emissions and impact. That is what we are really interested in. That logarithmic argument comes up again and again. It is important that people understand that it is not that smooth logarithmic relationship and the key point that the impacts are not smoothly logarithmic.

Senator MILNE —I would like to go to your submission where you say that present Australian targets will not achieve even the limited degree of climate protection conferred by 450 parts per million CO2 equivalent stabilisation, let alone get us to a safe climate when you consider the global differentiation, if you accept the argument of developed and developing countries having different contributions. I would like ask each of you to tell me what you think Australia’s target should be for 2020, if we accept two degrees, which I think that is probably too high but let us assume two degrees is it, in terms of a fixed goal beyond which we do not wish to transgress. What should be Australia’s target to for 2020 and 2050?

Mr Macintosh —Did you say 1990?

Senator MILNE —Below 1990.

Mr Macintosh —If you want keep below two degrees, and you want to have a likely outcome of that, there is a 66 per cent probability of achieving that. The false assessment report states quite plainly that you must keep PPM levels below 400 parts per million CO2. In order to get that, global cuts will have to be very sharp. Professor Raupach in his submission said five to 10 per cent by 2020 and 70 to 80 per cent by 2050 for the globe for the 450 outcomes. So for 400 globally, you are talking below that, and for Australia, I think the fairest way to do it would be along a contraction and convergence scenario where you converge at around 2030.

I think 2050 is the sort of thing that the developing world is not going to accept. On that basis, you are talking cuts in the order of 35 to 40 per cent for 2020. I can see many people probably baulking at and even scoffing at that as completely and utterly unachievable from a clinical perspective. I can accept that, but if you want pure maths, that is the pure mathematical outcome. If you are not willing to go there, then people need to start to say, ‘We’re not going to meet those targets.’

Senator FIELDING —So you would argue that it is not worth really doing anything unless you meet those targets. Is that it?

Mr Macintosh —No, not at all.

Senator FIELDING —I am just trying to work out where you go with this, that is all.

Mr Macintosh —No. There are scales of catastrophe. If we are going to miss 400 and miss 450, then we have to clear about what we can achieve. A 450, 500, 550 outcome is better than a 650 or 700 outcome.

Dr Pearman —Each of those possibilities is raised in the document that I prepared for the Treasury. My view is that it is 350 parts per million, and we need least a 30 per cent reduction by 2020 that reflects both the urgency of the issue and the investment in the fact that we might have to go harder. We might have to go higher than that because we have not fully appreciated how serious it is. In other words, it is a payoff. Investing early in a new energy regime will be in the national economic interest and not just in the interests of the climate change issue. We are a relatively wealthy country and we cannot sit back and expect all countries to take an equal share in this. All of that together says to me that we should have a 30 per cent reduction by 2020.

Senator BOSWELL —When you modelled the site—

CHAIR —Let the witnesses go through these questions first and we will then come back to you, Senator Boswell.

Prof. Steffen —Let me give you a more reflective answer that does not have numbers attached to it. It comes from some discussions over the years with humanity scholars and people who understand the psychology of human behaviour and so on. One of the big concerns about setting targets from a practical sense that are too high too soon is that they will fracture the whole process and we will walk away from Copenhagen with no agreement whatsoever, which will put us even further behind the eight ball. As a scientist my most pressing goal watching this process is to ensure that the trends we see in emissions get turned around as fast as possible. However that is achieved, whether it is a five per cent reduction by 2020, or a 30 per cent reduction, is less important than getting them turned around pretty quickly.

Once we get those trends turned around and people see that the sky will not fall down either economically or socially by going vigorously towards new energy systems and so on, we can start achieving some of the more ambitious targets that my colleagues have talked about. My number one concern is getting those trends turned around as fast as we possibly can. I am less fussed about what the target is in 2050 or 2020. We cannot even envisage the world in 2050 because it will be very different but I can envisage the world in the next five or 10 years. If we have not started turning around the trends by then I think we will be in real trouble. That is the number one target, if you like, without putting a number on it. I want to see the trends turned and pretty bloody quickly.

CHAIR —Professor Karoly?

Prof. Karoly —I should not divert from our submission which states that global emissions needed to peak between 2000 and 2015. We might have already missed the boat because the stabilisation is 450 parts per million. In 2020 emission reductions for developed countries should be between 25 per cent and 40 per cent.

CHAIR —Mr Cosier?

Mr Cosier —Senator, I would be a brave man to disagree with that. However, let me put a slightly different perspective on it. Again, that is a policy question where you rely on science for one half and on economics for the other half. If the economics were different to what they are you might get different answers from a public policy perspective. But if our Treasury states that we can achieve a target of 450 parts per million effectively with no noticeable long-term economic impact on the Australian economy, why on earth would you not aim for a target of 450 parts per million? If you aim for a target of 450 parts per million, as we said in our submission that would require at least a 25 per cent 2020 target for Australia.

CHAIR —Dr Raupach?

Dr Raupach ——I would like to pursue a line similar to the one that Professor Steffen used to provide a number or two. The number I would like to provide is based on this idea that the world as a whole can emit about 1,200 billion tonnes of carbon dioxide between now and forever. That is our finite resource of emission into the atmosphere. Let me refer to Australia’s contribution to that. If we emit at our current per capita rate of emissions our contribution would be about 180 billion tonnes. It will be much less than that so let us talk about a lesser number of the order of 60, which still leaves us emitting over the period at about twice the per capita rate. In other words, we have not gone to full contract and converge. If we emit that 60 gigatonnes it would leave us with of the order of 10 to 20 years of emissions. That means we have to reduce emissions very rapidly.

Senator BOSWELL —What happens then?

Dr Raupach —After that we will have exceeded our quota and we would be going into the territory of dangerous climate change.

Senator BOSWELL —What will happen?

Dr Raupach —The implication is that if we exceed our quota and the rest of the world exceeds the quota in the same way, temperatures will rise and we will have a choice between continuing to emit and accepting the climate change that is coming our way.

Senator FEENEY —I would like you to give me the worst case scenario.

CHAIR —Senator Feeney, you have a very bad habit. Senator Milne has the call.

Senator MILNE —Thank you for those comments. My concern is that several scientists in specific fields are talking about tipping points and threshold points from which there is no recovery. Recently one of those was the CRC for ecosystems and climate based in Hobart. They were saying that on the point of ocean acidification 450 parts per million is the tipping point. Once we go beyond that we will see the collapse of the marine food chain and so on. Professor Karoly, you are saying that we are already beyond 450 parts per million. Obviously we are not quite on the same wavelength here. I am interested to know—and this is the urgency question or the tipping points question—about the ability of the natural systems to come back. There has been a lot of discussion about overshoot—that somehow we will come back and we will drag it down. However, at some point it is irreversible. I wondered whether you and Dr Raupach would comment on that issue.

Prof. Karoly —I think the Antarctic CRC was commenting on the concentrations of carbon dioxide.

Senator MILNE —Yes.

Prof. Karoly —Not a carbon dioxide equivalent.

Senator MILNE —Yes, that is true.

Prof. Karoly —The 450 parts per million carbon dioxide equivalent that we have exceeded includes both the effects of other long-lived greenhouse gases such as methane, nitrous oxide and CFCs. At present carbon dioxide concentration is 380 parts per million.

Senator MILNE —That is right.

Prof. Karoly —That is why we have to be careful about whether we are talking about CO2 or CO2 equivalent. I think that probably explains the difference.

Senator MILNE —Yes.

Prof. Karoly —Referring to irreversible changes or to long-lived changes and tipping points, unfortunately we do not know—we probably will not know when we have gone past important tipping points until we have gone past them—and then it will be almost too late. However, one thing is very clear, that is, that there are long-term removal processes associated with carbon dioxide. When it is injected into the atmosphere a significant fraction of the amount of CO2 stays in the atmosphere for 1,000 years or longer. I refer to temperature response and to a recent analysis that we did not talk about in our submission. A paper by Susan Solomon, one of the co-chairs of the IPCC, pointed out that a large part of the warming due to the CO2 increases alone is irreversible on time scales of 1,000 years. The temperature will rise and the level of warming will stay essentially the same for nearly 1,000 years due only to the CO2. We can remove, or natural processes can remove methane and nitrous oxide rather quickly, but there is a long-term response for carbon dioxide. If we minimise increases in carbon dioxide through reducing emissions quickly that will give us a greater chance of avoiding any tipping points.

Dr Raupach —My response would be that to keep the risks of tipping points below a low number—of the order of 10 per cent—I agree with Professor Pearman and James Hanson and go with the target of 350 parts per million CO2. In fact, 350 parts per million CO2 is not available to us at the moment. In order to keep the risks below the next danger point of two degrees, 450 parts per million CO2 equivalent is the essential that we have to meet and that requires keeping emissions to the sorts of numbers we have been talking about. My figure would be an emissions reduction for Australia of the order of 90 per cent by 2050. How we get there matters much less than the fact that it is very low by 2050.

Senator MILNE —Given what you said, the timeframe in which we start to turn this around is critical. I am concerned about your reference to the fact that as long as we get it there by 2050 that will be all right. The urgency is such that we cannot take out our response at such a low measure. That is why I come back to the five per cent to 15 per cent. If we locked in five per cent to 15 per cent reductions in Australia to 2020 with no change until after 2020, is that the worst case scenario, given that the science is getting worse by the minute and there is no flexibility about changing those targets in that timeframe?

Dr Raupach —Do you mean a worst case scenario in relation to what should be achieved?

Senator MILNE —Yes.

Dr Raupach —I think the answer to that has to be given in several parts. From a scientific point of view the trajectory we follow between now and 2050 matters less than the total amount that is emitted underneath that trajectory. That is a scientific fact. However, you have already alluded to an important economic and social fact, that is, that we can only change emissions so rapidly. Because we have a constraint on how fast we can change our energy generation systems or our emissions, profiled as a nation, we need intermediate targets. Those targets have to be strong. In my view the targets need to be applied not to the basket of gases that this country emits, including all the mechanisms by which we trade gases internationally. In particular, we need to have a target for CO2 because that is the hardest one to change.

If we could turn our CO2 emissions from their present two per cent growth per year, which has been steady for the past 20 odd years, to a decrease of two per cent per year before 2020, we will be on the right track. That fact would see us arrive at about the right place by 2050, it would result in a massive reduction in emissions between now and 2020, but it would make the reduction below the 2000 level only of the order of five per cent to 10 per cent because we have gone up so much in the meantime. In other words, we have a big debt to pay off. My priority is to see the emissions going down at the right rate.

Senator MILNE —There has been a lot of discussion about burden sharing and what would be a fair thing for Australia, given the scientific imperative and given that the only point in an economic tool is to achieve a scientific objective. A lot of the time that seems to be forgotten around here. I ask Mr Macintosh whether he would like to start. Referring to the differential nature of the per capita arguments, what is your response? Essentially Australia is saying that we should have a more generous allocation because we have an increasing population.

Mr Macintosh —I think the starting point for this discussion is the UNFCCC. The UNFCCC sets out the principles on which countries are meant to act in relation to climate policy. It states quite clearly that the first one is a common but differentiated responsibility, which translates roughly into which countries move first and developing countries follow. The second point is that our responses should be based on the precautionary principle. A rough interpretation of that is when you are faced with serious environmental risks and irreversibility you should avoid thresholds and natural systems unless the costs of doing so are prohibitive.

Using those two basic principles the first one ties into discussions we have been having about PPM levels and the second one refers to common but differentiated responsibility. The big thing is that we are a wealthy and a strong economic nation. On a per capita basis we are also a high emitting nation. I think our emissions per capita are around 28 tonnes per person verses places like India which is down to about two tonnes and if I am not mistaken China is down to about five tonnes.

We have to take that into consideration. As a result I think we need to make sharper cuts than what the government has put forward if we want to meet the sorts of targets that have been talked about. That is the point I was emphasising in my opening statement. The idea is that we can lean on the rest of the world on the basis that we are big emitters and get away with it. I do not think that the rest of the world and the rest of the developed world will accept that argument.

Senator MILNE —Would anyone else like to comment?

Prof. Karoly —I think it is important to bear in mind that because Australian emissions are so high any equitable approach based on many measures of equity and fairness would be that Australia’s emissions should be reduced to a level consistent with other developed countries. Therefore, if Australia wants to achieve a consistent international target—consistent with other developed countries—it needs to reduce its emissions more than other developed countries because it has a higher emission. In a converge and contract approach, Australia should be having greater emission reductions rather than lesser emission reductions because at present its contribution per person is greater than other developed countries.

Mr Macintosh —Let me add to that. A key point there relates to where you converge. If you use contraction and convergence and you draw it out to 2050 you will end up with a far larger part of the emissions rights pie than pretty much anyone because you start at such a high point. When you draw a straight line across you end up with a far larger proportion of emissions. That is why I say a convergence at 2050 is unlikely to be acceptable to the developing world. If we want to convince them to adopt strong targets and to pursue strong PPM outcomes, I would argue that we would have to bring that convergence date forward to somewhere around 2030.

Senator BOSWELL —Mr Chairman—

CHAIR —You are on the list, Senator Boswell. Senator Xenophon, do you want to ask any questions?

Senator XENOPHON —I refer to what Senator Milne was asking earlier. You are saying that the tipping point is 450 parts per million. You are saying that that is the aim. Is that the general consensus of the panel?

Mr Cosier —Just about everyone on the panel has been saying that achieving a 450 stabilisation by 2050 will give us a 50 per cent probability of keeping within two degrees of dangerous climate change. As Professor Karoly said, it gives us a five per cent probability of exceeding four degrees in global warming. Numbers are easy to throw around but let us look at probability and risk. Would you go for a swim at Bondi Beach if there was a five per cent probability of being eaten by a shark? That is the sort of discussion that these numbers entail in the real world.

Senator XENOPHON —A book was recently published by Professor Ian Plimer in which he said that there is no anthropogenic climate change. We have heard from witnesses such as Professor Carter and Professor Franks. What is your general response to their approach that this is something that does not have substance in the context of framed policy?

Prof. Karoly —Ian Plimer was professor and head of the School of Earth Sciences where I am based now at the University of Melbourne. I have had numerous discussions with Ian Plimer over a long time. He is a geologist and he is discussing in his book primarily geological variations over hundreds and thousands of millions of year timescales. It is certainly true that on those timescales carbon dioxide levels and temperatures have been warmer in the past. He uses that argument to state that, therefore, all we are seeing now is a natural variation.

Many climate scientists would argue that he is mistaken. I have also argued that at length but, as I said earlier in response to a question from Senator Colbeck, all academies of science in major developed countries around the world and all governments around the world accept the conclusions of the Intergovernmental Panel on Climate Change. If Professor Plimer is correct he will win the Nobel Prize for proving that climate change is not happening due to increasing greenhouse gases. I think the chances of that are much lower than the chances of anyone else on this panel winning the Nobel Prize.

Senator XENOPHON —From your point of view it is a risk management issue?

Prof. Karoly —It is very much a risk management issue. But climate science has already demonstrated that natural variability cannot explain the observed magnitude and patterns of warming over the twentieth century and that increasing greenhouse gases not only are the best explanation but also explain the vast majority of the warming that we have observed. There is no other factor like volcanoes or changes in solar irradiance or natural climate variability that can explain the warming over the past 50 years in global average temperature, both in patterns and in the magnitude of the warming.

Senator XENOPHON —Finally, I think it would be fair to say that either or both Professor Carter and Professor Franks had the view that even if there were a doubling in CO2 that would not cause any problems. What is the view of the panel if there were, say a doubling of CO2? What would be the impact on the environment?

Prof. Karoly —The best estimate of the global average temperature response for a doubling of carbon dioxide concentrations is that there is a 95 per cent chance of a warming greater than 1.5 degrees and a five per cent chance of a warming greater than six degrees in the global average temperature. We have already said that a warming of greater than two degrees is likely to contribute to dangerous anthropogenic climate change. So a doubling of carbon dioxide would give you a greater than 50 per cent risk of dangerous anthropogenic climate change. The numbers and the estimates that Professor Carter provided are not consistent with any peer reviewed published scientific literature.

Senator XENOPHON —Thank you.

Senator BOSWELL —I do not know whether we achieve a great deal when one group of scientists puts the boot into another group of scientists. I do not know who is right and I do not know who is wrong and I do not believe we will ever find out. What I do understand—

Prof. Steffen —The point about science is that it is not just one group of scientists putting the boot into another group of scientists. Science is not like politics or religion. It is not what you believe and you debate that; it is an observation and evidence-based activity in which we are constantly challenging each other. Members of the panel challenge each other.

Senator BOSWELL —That is good. Obviously they are challenging you and you are challenging them. I do not know who is right and who is wrong. However, I know the figures that you are throwing around. Professors such as you are probably earning $200,000 a year. A lot of people in the community will be in serious trouble if that figure of 97 per cent to which Professor Karoly referred is correct. We have to be practical. You might be right or you might be wrong but if you are right one thing that is beyond doubt is that the unemployment figure will go through the roof.

I accept that you do not have to worry about that because you are scientists. However, politicians have to balance some of the statements that you have been making. We represent various people whose jobs are on the line. We have already heard overwhelming evidence from some of the biggest manufacturers in town that if certain things occurred a number of jobs would be lost. You are telling us about the science but I wonder whether you should take a more balanced view. You probably cannot because you are scientists but what will happen if we go it alone? Today I read an article that referred to America putting legislation through the Senate. The article said, ‘We will do all these things as long as it does not hurt anyone.’ I am not convinced that you intend to do anything by including an escape clause in the legislation that states, ‘We will do all these things as long as it does not hurt anyone.’ China, India and a number of other countries are not coming forward. An article that appeared in today’s Australian referred to a meeting in Germany yesterday or the day before at which delegates said, ‘We will not get there. There will not be any global response.’ My question to you is: What will happen scientifically if we do all these things on our own? I want only your scientific views. I do not want you to say that we should do it because we are rich, or we should do it for some other reason. What would happen if we were the only country in the world that did this? Would we make a difference?

Mr Macintosh —The response is no. If Australia acts completely and utterly alone, the difference will be marginal if detectable at all. But that is not really the issue. As I was saying before, the decision rules to which we signed up under the UNFCCC clearly state that the developed countries should go first.

Senator BOSWELL —The white paper was never modelled. The green paper was modelled on the assumption that everyone would join us. That is what is said in the green paper.

Mr Macintosh —I will get to that. We are not acting alone. The developed world is moving on this issue. The United States is now taking steps to introduce emission trading schemes. Japan and New Zealand are doing so and Europe already has one.

Senator BOSWELL —America said, ‘We will do all these things as long as it does not hurt anyone’ but I do not think that is an indication that it will do anything. Will it do so as long as it does not hurt any one and as long as it does not cost a job or put someone out of business? Will we not do it if it results in all those things? It is not a great criteria for countries to state in a gung-ho fashion, ‘We will do this.’ I asked all of you a question and you did not say much in your answer. If we go it alone on this what will happen to the world’s climate?

Mr Macintosh —Is that not the response that I gave? If we act completely alone there will not be much of a response. The government states quite clearly in the white paper—or it hints at it—that if there is no agreement it probably will not pursue a five per cent cut in national emissions. It will be a moot point because it looks like the developed countries are moving, so we will not be acting alone. The agreement to which we signed up required the developed countries to move first.

Dr Pearman —Let me respond directly to you. If you go to the Senate paper to which I referred earlier you will find that one of the scenarios we modelled was business as usual. That is what would happen if Australia went it alone. It would be business as usual. Read that paper and you will see that the consequences for the world—not just for us but for everyone—are clearly laid out. Scientists do not want to go there because it is so serious that you do not want to contemplate those sorts of outcomes. We are debating the lower levels—the 350 or 450 parts per million because we hope that those are within the realms of possibilities or capabilities. No-one on this side of the desk wants the Australian economy hurt by this and we to do not want people to lose their jobs. However, we want a set of policies to come out of the legislation that simultaneously treats all the other things that parliaments have to do and that treats this problem.

Senator BOSWELL —But we do not live in a Pollyanna world.

Prof. Steffen —Senator Boswell, you raised an important point that I would like to address, that is, the issue of perceptions that irreparable or unacceptable damage to economies, jobs and so on are associated with any of the sorts of things we have been talking about. That is a misconception that we have to get around.

Senator BOSWELL —You cannot take it. Presumably you have never been in business.

Prof. Steffen —Can I finish?

Senator BOSWELL —No, you cannot because you are a scientist. You can only tell me about science. You cannot tell me about the economics of it.

CHAIR —Senator Boswell, you asked a question. Let Professor Steffen give us the answer. You asked the question and we would like to hear the answer.

Senator BOSWELL —He is not an economist.

Prof. Steffen —No I am not, but I would like to offer two comments. First, you cannot compare experiences in other parts of the world, which is what my colleagues who our economists do. Let me give you one example, that is, the Scandinavian country of Sweden which has now gone to 40 per cent of renewables. They have more than met their Kyoto targets and their economy has grown by 60 per cent to 70 per cent over a 20-year period. They have not lost any jobs. They have been damaged more by the global financial crisis than they have by going up to those sorts of targets that they have tried to meet. I think clever countries can do that. I think there are models out there that show that we can. The second point is that countries are different. Sweden has a very different mix to ours so obviously we cannot make that simple comparison. Nevertheless, they are a high-tech, highly educated and relatively small population country and in that regard they are similar to us.

The next point that I want to make is to reiterate something to which I referred earlier. When people hear about massive cuts of 20 per cent, 50 per cent and so on, obviously it is quite frightening. You articulated that fear. That is why it is important to go for indicators that are more constant than 2020. Let us take the two per cent increase per year. If we knocked that down to 1.7 per cent, 1.6 per cent, or 1.3 per cent over the next few years we need to track it annually.

We need to show that by investing in efficiency and in quick return responses we will start turning that curve. We will not lose jobs. We will probably even help the economy. British petroleum, a company that is bigger than several countries decided voluntarily to meet the Kyoto protocol target when it was introduced in 1997. They allowed their subdivisions to trade permits. They found that they met that target faster than they thought and they increased profitability by £500 billion a year. There are models we can use to do this but we have to start.

Senator BOSWELL —I do not believe that will happen.

Prof. Steffen —We have to start.

Senator BOSWELL —I accept your explanation as a scientist, as that is your expertise. However, you cannot tell me what will happen in Sweden, Lapland, Australia or anywhere else because that is not your expertise. You might think you know. You do not understand the economy of this country; you are outside it. I would like you to confine your remarks to your expertise.

Senator MILNE —Is there a question?

CHAIR —Senator Boswell, do you want to hear the responses from the witness?

Senator BOSWELL —No. I can have thoughts as good about the economy as has Professor Steffen.

Senator PRATT —Do you want to ask a question, Senator Boswell?

Senator BOSWELL —He has no more expertise on the economy than I have.

Senator PRATT —Why did you ask the question?

Senator BOSWELL —I asked a question on science, not on the economy.

Senator PRATT —Brain dead.

Prof. Karoly —Can I make a quick response on the science?

CHAIR —We did ask the question of everybody.

Senator BOSWELL —But the question was on the science.

Senator PRATT —I hear you.

CHAIR —I think there are three still to go. Let us continue hearing from witnesses along the table. Professor Karoly?

Prof. Karoly —First of all, in terms of the science, there is clear evidence already that climate change is increasing the risk of death in Australia due to heatwaves and bushfires. So climate change is already causing major adverse impacts in Australia. I would have said that loss of jobs is really important, but loss of life is even more important. It is difficult to weigh up one against the other. I cannot do that—you are correct. In terms of the future impacts of climate change, it is clear that there will be greater loss of jobs due to climate change impacts in Australia than loss of jobs due to responses to mitigation schemes based on evidence in a number of different economic assessments, particularly by Garnaut and the Treasury.

I am not an expert in that—I agree—but I can tell you that the climate change impacts in Australia will be substantial. The best estimate of the business as usual carbon dioxide and greenhouse gas levels in the atmosphere in 2100 is 1,600 parts per million CO2 equivalent.

CHAIR —Mr Cosier?

Mr Cosier —Senator, today’s discussion, as I understand it, has been about Australia’s contribution to a global reduction level of 450 parts per million, and we were asked the question what our advice for a 2020 target for Australia would be in that context. In that context, I and many others here said at least 25 per cent as a contribution to a global reduction target. That is the discussion I have been having. To answer your question, though, I am not an economist either, but we do know that there is no doubt that such a massive transition will have a major impact on the global economic system. Jobs will go in some industries and jobs will be created in others. As I said, I am not an economist, so with your agreement, Senator, I would like to read into Hansard three small quotes from the Treasury report that address specifically Senator Boswell’s question:

Large reductions in emissions do not require reductions in economic activity, because the economy restructures in response to emission pricing.

               …             …             …

Demand shifts from emission-intensive products such as coal, aluminium, beef and road transport towards lower-emission products such as renewable energy, wood products ... and rail transport.

The report also states:

Delaying mitigation action in the global economy will increase climate change risks, lock in more emission-intensive industry and infrastructure, and defer cost reductions in low-emission technologies. This will increase the cost of achieving any given environmental goal.

The third comment is on the same page:

In a sensitivity analysis where global mitigation action is delayed by seven years, the short-term benefits of delay are quickly outweighed by the additional costs, as greater emission reductions are required in a shorter time to achieve the same environmental outcome.

Senator BOSWELL —Thanks, Mr Cosier, but I would expect that the Treasury would support the government’s view on this. Reading out something from the Treasury would indicate to me only that they are towing the government line, and I expect them to do that.

Senator PRATT —Chair!

CHAIR —Senator Boswell, you will get the opportunity to deal with Treasury later. We will come to Senator Milne in a moment. We are still to hear from Mr Raupach. Senator Boswell, do you have any other questions?

Senator BOSWELL —The question I asked was: What happens if we go it alone? We have had all statements on the economy, but I think Mr Macintosh answered it—we would achieve very little. That is what I was asking, and that is it.

Dr Raupach —Can I add one point to that supporting what Mr Macintosh has said? We will achieve very little. Let us look at the implications of achieving very little. Three areas of impact for climate change in Australia include the Great Barrier Reef. Under the sorts of scenarios that Professor Karoly has outlined—business as usual—death of the Great Barrier Reef is as close to a certainty as you can get. Second, the decline in rainfall in southern Australia, including the Murray-Darling Basin and south-west Australia, is perhaps not quite as high a certainty but it has a very high probability of 20 per cent declines in rainfall and 60 per cent declines in run-off. The third area is that sea level will rise. There will be massive increases in sea level which will take out significant coastal communities around the country.

Senator BOSWELL —In Australia?

Dr Raupach —Sea level rises in the order of one to 1.5 metres under the sorts of scenarios that we were looking at.

Senator BOSWELL —Has that sea level started to rise? Is there a rise in sea level?

Dr Raupach —Yes, it is starting to rise. It is going up at over three millimetres per year at the moment. The point is that these areas have economic implications. I am also not an economist but I cannot imagine that any of those three or other climate change impacts that we are talking about would be free of economic implications. It is not the economy versus the climate.

CHAIR —Thanks. Senator Pratt?

Senator PRATT —Thank you. As climate change scientists, you would be aware that there is a lot of debate around at the moment about the model by which we choose to reduce our emissions. I am sure you all do not much care which way we do that, provided we get on with doing it and reduce our emissions. But at the moment there is an increasing call to change our methodology and abandon the Carbon Pollution Reduction Scheme and look and look at a carbon tax. Based on your knowledge of how long it takes to get people in to sign up to something, what do you think the implications are of having to start from scratch and have another three, four or five years of consultation and getting a new model up? What would be the implications for trying to set a target and getting on with meeting our carbon reduction ambitions?

CHAIR —Professor Karoly?

Prof. Karoly —I will quote from something that the Will Steffen and his group wrote at the Copenhagen conference, which is, ‘Delay in initiating effective mitigation actions increases significantly the long-term social and economic costs of both adaptation’, because of greater climate change impacts, ‘and mitigation.’ So any delay will increase the costs.

Prof. Steffen —And increase the risks, of course, as we have already outlined.

Senator PRATT —While we might be talking about finding a more efficient way of doing it, there is an inefficiency in delay in any case?

Mr Cosier —Senator, I think the debate about the design of the CPRS is a legitimate debate. It is important that we have that debate, but I would reiterate what the scientists on this panel have said, which is, ‘Let’s get on with it.’ We have had 40 years to reach or to get back to a 450 target. If we delay it a year, we have 39. If we delay one more year, we have 38. In 1990, which is 19 years ago, we agreed to deal with this issue, so if we wait another 19 years we have lost 19 more years to get on with it. So given what our Treasury is saying about the minor economic impact in the long term with early action, get on with it.

Senator PRATT —So the key issue for all of you would be not the model, but the target?

Dr Pearman —I think it is a little bit more than that. I am also of the same view that delaying would actually send some very bad signals internationally as well as nationally. I do not think the community would actually like it at all. But it is also crucial that we get on with addressing the problem. My understanding of the CPRS at the moment is that there are a couple of things that need to be addressed. One is the degree of targets because of the urgency. The other one is making sure that you do not lock in any of the agreements for too long because the uncertainty exists and we will solve some of those problems and will understand them better in another year’s time. At that point in time you do not want to be locked in for 20 years in terms of how you respond.

As I said before, I understand that businesses need a degree of certainty, but that has to be weighed against the fact that there is this uncertainty about how quickly we need to respond. That will be addressed as we go forward in time. The third thing is that you do not want to lock in a situation in which inadvertently some parts of the community, maybe the domestic part of the community, actually reduce their emissions through different terms, which offsets the transition to a lower carbon economy.

At the moment, the CPRS could lead to that, I think. So the additionality issue around making sure that you really are encouraging the reafforestation options that are not yet traded in a carbon and not setting them back by counting those and not changing the underpinning energy cycle that we actually have. There are some changes that need to be there, but I think it would be quite disastrous if we went back and tried to restart it, and then spend another four or five years trying to do that.

Senator XENOPHON —Chair, could I ask a supplementary question to the question asked by Senator Pratt?

CHAIR —Sure.

Senator XENOPHON —You have Richard Denniss form the Australia Institute who is saying that we should wait for Copenhagen because if Copenhagen comes up with a higher or tougher target, there will be a huge exposure to taxpayers to make up for that in terms of additional permits. Also Professor Garnaut said recently that the global economic downturn has actually brought us a little bit of breathing space in the context of lower emissions as a result of the downturn. Does the panel have any views in relation to that?

Dr Pearman —With respect to the latter point, it may be true. It is very likely that our emissions will not grow as fas as they were growing with the economic downturn. This is an opportunity to now actually move forward with a reduction process that wins us some years rather than wasting it as we go forward until we get through this recession. We all believe that the recession will be relatively short lived—certainly relatively short lived with regard to the climate change issue which, as has been pointed out, is of hundreds or thousands of years in its time scale.

Senator XENOPHON —And Copenhagen—Richard Denniss’s point?

Dr Pearman —I have to say I am not really familiar enough with the discussion, so I would not want to comment. Going to Copenhagen with a strong Australian position, despite the fact, as Senator Boswell has pointed out, that we are a small player in the total emissions would have an enormous impact on Copenhagen. It would have an impact on our status in the world economies and that is important as well. But that really is a non-scientific matter that has to be weighed up by the government.

CHAIR —I just want to ask a quick question of Mr Cosier. You spoke about the opportunities particularly in terrestrial carbon and in forestry, and you said that your submission is based on the modelling on the ABARE study for forestry, which again is based on some directions given by Treasury. My concern with that is that it appears we may have a series of compounding errors, if you like, that come out of that. I have real concerns about the realities of the ABARE study. If I look at my home state, which I know relatively well, the area that is proposed for forestry in that is unrealistic, in my view. It is just not going to happen. It is too great and it is based on available area rather than what the probabilities of reality might be.

In the context of some of the progress that could be made in respect of forestry and soil carbon, I am just concerned to get some good information, not something that comes through a series of compounded errors based on assumption that is put into the calculation at the first point and that might be wrong. It might have a completely legitimate basis for being put there, but in the context of developing things further down the track you end up getting completely unrealistic projections and calculations of what might be possible.

Mr Cosier —Certainly, Senator. I will be also attending tomorrow’s green panel and I was proposing to spend more time on that issue tomorrow but just to clarify some of your points: Treasury commissioned ABARE and an international economist from the Lawrence Berkeley National Laboratory to look at the global forestry issue to give advice to Treasury on what carbon prices would likely do in economic terms to the forestry sector. They took the ABARE advice and put that into their modelling, so it was simply a commissioning by Treasury to get ABARE.

CHAIR —Yes.

Mr Cosier —I am aware of other work that is being done at the moment which suggests that those figures, while they are a first-cut economic analysis, are certainly within the ballpark of the figures we are talking about with McKinsey in terms of the 20 per cent. But the thing I would just briefly mention, without taking too much time up today on this question, is that the ABARE report discusses forestry in two sectors. There is the forest industry, the forest product sector, and what they call environmental plantings. It is the environmental plantings with the higher carbon prices where you get your massive carbon sequestration because that carbon stays in that landscape and hence that is where most of the investment will go.

The advantages of carbon sequestration through environmental plantings is that it can go into areas that do not require large scale forestry soil types or rainfall patterns and it can be on a much smaller scale. In degraded landscapes, such as in the Murray-Darling Basin, every farmer, for example, could probably revegetate 10 per cent of their property with almost no economic loss, but massive environmental gain as well as a carbon sink gain. If you look at it from a forest industry plantation perspective, yes, there are serious finite physical limits on where you can have forestry plantations. But in terms of environmental plantings in degraded landscapes in southern Australia, I think it is an open book, and I think the opportunity is there in the work I am aware of and that will be released soon that is quite staggering and, to be honest, very exciting.

CHAIR —Just to go to that, it is something about which I have spoken to some private forest growers about because they have a real interest in this in respect of their whole-of-farm business.

Mr Cosier —Yes.

CHAIR —Particularly in respect of the environmental plantings being a permanent planting and then correlating that against some of the CSIRO work that says that if you cycle some of those plantings over a period, you will sequester more carbon by managing the plantings over a period rather than just planting them and leaving them. They are really interested in getting into the overall green carbon economy.

Mr Cosier —Yes.

CHAIR —But being able to manage their forests is a critical part of their plan in respect of that.

Mr Cosier —There is no one bullet here. As Professor Garnaut did in his list, there are about 12 options available. One of them of the ones you are referring to is biofuels. If you had environmental plantings and left the trees there, you get a certain average carbon outcome on that property. If you cycled those plantings through biodiesel plants, you would lower the net carbon but you would also be offsetting fossil fuel emissions, so there is another equation there. Quite complex resource economics is involved in this.

CHAIR —I understand.

Mr Cosier —The overall message is that a range of options is available to a range of people, but the bottom line is the profoundly large income stream into rural Australia that does not currently exist and profound opportunities for multiple environmental benefits. One physical example is that if in 1788 we knew what we now know, we would not have cleared the vegetation on our river systems. We would have left corridors of native vegetation along the river systems. A carbon price gives us the opportunity to put back those corridors of native vegetation.

Most farmers that I know of would be delighted for someone to pay them just to plant a strip of vegetation along their rivers to improve the water quality in the river system. The impact on production would be quite minimal, but the overall land scale benefits for the Murray-Darling Basin are quite profound.

CHAIR —Okay.

Dr Pearman —Senator, can I respond just very briefly: I think your observation is extremely accurate. There are uncertainties about the opportunities that exist there. This is the point that I made right at the very beginning. Those uncertainties apply to geosequestration, to geothermal, to wind power and to all the other options that we have in this process. The advantage is that if we invest in doing some of these things, we will find out as we go down the track, but we are maximising our resilience by having all those options open. The big difficulty is that we are not going to be able to trade that. Because of those uncertainties, you cannot trade that carbon at least at the moment within the standard trading system.

CHAIR —Because of the limitations of the scheme.

Dr Pearman —That is right.

CHAIR —The rules, as they are currently stated, place real limitations around that.

Dr Pearman —That is right.

CHAIR —That is the next point I was going to make. That is effectively looking back to rules that have been put into place under the Kyoto Protocol rather than necessarily looking to what the opportunities might be out of Copenhagen.

Dr Pearman —That is right.

CHAIR —I suppose that looks at the flexibilities that you have been talking about in your evidence today. Whatever scheme we end up putting in place in Australia should be able to take account of those things. Rather than having a scheme that is designed looking backwards at Kyoto, we are looking at something that is designed for your forward looking at Copenhagen and the outcome of that process.

Dr Pearman —I think that is right, although I would suggest, with due respect, that in the short term, and that is the term of the CPRS, we are not going to have those capabilities of including those systems immediately. That is why I think the concept of still supporting them in some way within the framework of the overall policy response of government is important so that we can build the capabilities of that sector that eventually should be incorporated into the total trading system when it is ready. But it is not likely to happen immediately, I do not think.

CHAIR —But surely one of the leadership roles that we should be taking is actually working towards those design parameters so that they can be included as part of the process rather than going in with something that is fixed and not flexible to allow us to move forward.

Dr Pearman —Agreed.

CHAIR —Surely that is one of the key leadership roles that we ought to be taking as part of this process, including some of these other opportunities that are there and that are not possible as part of the current design parameters.

Senator MILNE —I have a question that is supplementary to that. I am frustrated again about hearing the potential to build carbon, if you like, through plantings but nobody is talking about the fact that we are still clearing native vegetation in Australia and we are still cutting down primary forests in Australia. So, Dr Raupach, Mr Cosier or Professor Karoly—whoever, at what point are we going to link carbon, biodiversity and building resilience in natural systems as a way of mitigating and adapting to the climate? Yes, we certainly want to revegetate riverbanks, but in Tasmania, right now, we are logging them.

It is all very well to say, ‘Go out and replant the Murray-Darling along the riparian zone’, go and see what they are doing by removing massive carbon stores. Dr Raupach, I would like to know what your view is about the policy settings in relation to protecting carbon stores in Australia, the terrestrial carbon stores, and how important that is if we are to achieve stabilisation and deep cuts. We have to separate ground carbon and biocarbon, I would have thought, and how we account for those to maximise our chances.

Dr Raupach —I fully support the thrust your question, Senator. We are still logging native vegetation at a rate, from memory, of something like 60 million tonnes of carbon a year—I must check that figure to get it accurate—but the requirement in our whole terrestrial carbon sector, including both the deforestation that continues, almost uniquely in Australia as a developed country, and the kinds of options both in managed forestry and in environmental planting that Mr Cosier has put forward, is to become a net sink for carbon. Clearly reduction in rates of deforestation is an important contribution to that.

Prof. Steffen —I just want to add to that that there is some interesting research that shows that natural ecosystems, as a general rule of thumb, maximise carbon storage compared to any human planted system. That is a general rule of thumb. That is the way nature works. So by removing an old growth forest, you have removed a very rich carbon store. Even by replanting with trees, you will not get back the carbon you had in the original ecosystem. That is true in savannahs and it is true in grasslands as well, although they put the carbon in different parts of the ecosystem. A very good rule of thumb is that natural ecosystems have maximised storage for that particular type of climate and soil.

Senator MILNE —So is it not the case that we need to change the accounting systems so that we get full carbon accounting and separate the uptake from the emissions and the stores. Otherwise, if you get the Kyoto rules, we are just going to see this outcome continuing. Does anyone want to respond to that?

Prof. Steffen —One of the things that the scientific community has said since 1998 or even earlier, and we have published a lot of papers on this, is that you have to have full carbon accounting to really understand the effects of any changes by humans on the carbon cycle, particularly the terrestrial carbon cycle. That includes full carbon accounting through time, through rotation cycles and through disturbance regimes and so on, as well as full carbon accounting in space. When you do that, you find that natural old growth ecosystems have maximised carbon storage. So losing them means that you meet a net loss of carbon, no matter what you use the land for afterwards.

Mr Macintosh —I want to add there in relation to full carbon accounting that I heard almost everyone say that they are supportive of the concept, and I think that most people are. The issue though is that it will take us quite a long time to arrive at a point at which we can implement that in Australia and under the international rules. It will take several years until the measurement and accounting issues are sorted out, and then it will take several years in negotiations in international fora until we have those rules. That is why I think it is crucially important now to concentrate on deforestation. It is already covered.

Under the existing rules, we have 60 to 70 million tonnes worth CO2 and, where that is emitted from deforestation, it is the equivalent of 400,000 hectares a year. We can move on that very quickly and get very cheap abatement in that sector. At the moment though in the white paper, that issue is left blank. The government says it is looking at issues, but we have not seen anything yet, and I think it is one issue that it would be fantastic to see some movement on.

CHAIR —Mr Cosier, do you have something to add?

Mr Cosier —Yes. Harking back to your comment, Senator, first of all the CPRS is designed under the Kyoto rules so I have sympathy for why the CPRS is built that way, and hence I would agree with you on differentiating this in two ways. What you can do under Kyoto, and what should be part of the CPRS or other government responses or both, and also what Australia should argue for in Copenhagen is full carbon accounting. It is very simple: Kyoto said, ‘You can’t do this unless you can prove that.’ If we could reverse the onus of proof at Copenhagen and say, ‘With full carbon accounting, you can do this once you have passed that standard’, you will unleash a wave of innovation that I think would rapidly accelerate the processes that Andrew is talking about.

I will just pick up the point that if we are still emitting 60 million tonnes a year from deforestation of Australia, at a $40 carbon price, if my maths is right, that is around $24 billion to the Australian economy. We might find that if you brought avoided deforestation into the CPRS or into some other government policy framework, immediately you would fundamentally change those economics. It may well, for example, be in Tasmania’s self-interest to stop the logging of the old growth forests and use the money from the carbon currency or the carbon economy to invest in other productive sectors of the economy.

CHAIR —Dr Raupach?

Dr Raupach —Thank you, Mr Chairman. We need a full carbon account. It is very important in constructing that full carbon account, which has to be global because the carbon is globally shared, it is very important to distinguish the processes and the exchanges of carbon between the earth’s surface and the atmosphere, which we are managing, as humans, and those which we are not. The reason for that is that if we do not make that distinction, then there is an enormous temptation to, as it were, socialise some of the losses and to count processes which are occurring or would have occurred anyway as mitigation. This is essentially the additionality point. It is very important for that temptation to be avoided.

Therefore we certainly need full carbon accounts. We have to distinguish in those full carbon accounts which parts of the process are occurring naturally and which parts are being directly managed. An example of a massive process which is occurring naturally is ocean carbon uptake, which at the moment accounts for about a quarter of all emissions.

Mr Cosier —Could I correct the record and prove that I am not an economist? At $40 a tonne for 60 million tonnes, it is $2.4 billion, not $24 billion.

CHAIR —I just want to go back to the forestry topic because it is something in which I take a specific interest. I referred to the CSIRO research that talked about a managed native forest over 180 years that is harvested on a 60-year cycle will sequester 30 per cent more carbon than a forest that is just grown and left. It is an issue that is a point of discussion, particularly in those areas that have a forest industry, and the research talks of native forest. I just wanted to ask about that.

With respect to deforestation, my understanding is that under the current Kyoto rules, the assumption is that once you harvest a forest, it effectively emits all its carbon. That comes back to the point that we have been making about accounting because there is not an effective method at this point for accounting what carbon is stored. Effectively, that skews the argument with respect to that particular issue.

Mr Cosier —On the latter question, I would agree with you that that is one of the areas in which more work could be done through the Copenhagen process. On the former, I do not have the answer, but perhaps Professor Pearman may have better information.

Dr Pearman —The only information that you can get for those figures is that it depends on what you do with the carbon when you harvest it.

CHAIR —Absolutely. That is clear.

Dr Pearman —If you there and then put it straight back into the atmosphere, that cannot be right.

CHAIR —Yes.

Dr Pearman —But if you are storing it for long periods in furniture or whatever it might be, then you can get those additionalities.

CHAIR —That comes back to the accounting issue. The studies that have been done make assumptions or make an accounting for solid timber, paper and all those sorts of things. I suppose it is the beginnings of that accounting process that allows for some consideration of that cycle as part of the forestry process, rather than the Kyoto rules which, as I said, effectively assume that when you cut a tree down it emits all its carbon. For certain uses, you could not argue that that was not the case, unless it was used for biofuels or something like that. I just want to get some discussion of that particular point.

Mr Macintosh —There is a distinction between deforestation and forestry management or the forestry issues. For 60 million or 70 million tonnes, we are talking about deforestation and almost all of it is for agricultural purposes. It is ploughed down and trees are ploughed up.

CHAIR —It is a big operation.

Mr Macintosh —The trees are then either burnt off or allowed to degrade. The assumption is that there is an immediate release of carbon and then there is a tail that either is burnt or it degrades.

CHAIR —Yes.

Mr Macintosh —In terms of the forest products, it is forest management in accounting terms and it is in the forestry category, and then you get into that separate issue. It is just important to have that in mind.

CHAIR —I think that is very important distinction.

Mr Cosier —Could I just add something?

CHAIR —Certainly.

Mr Cosier —Even though the current rules do not provide a credit, if you like, for storing that carbon in, say, houses or furniture, timber products are going to be major, major winners in any carbon price scenario simply because they displace energy intensive products, such as aluminium, steel and brick manufacture and cement, which are all high greenhouse-emitting products. Even with the current Kyoto rules, the forest product sector, or the timber plantation sector, would be a major beneficiary from the high price of carbon.

CHAIR —We need to change some of our local rules with respect to construction methods and standards that at this point in time have a distinct bias towards some of those energy-intensive materials, particularly some of the perceptions towards eco-housing, for example, that talks specifically about mass rather than some of the other elements, such as timber which can actually store carbon and make a contribution in that way. We have some local issues that we need to deal with. I will be exploring that as the inquiry progresses.

Mr Cosier —There are some good tools and good science around on that and the sunk carbon in the building of the house versus the carbon emitted in keeping it warm and cool in winter and summer. But you never know—we might bring back the Queenslander as part of our emissions trading scheme.

CHAIR —Dr Raupach?

Dr Raupach —I am not familiar with the particular study that you cited on the 30 per cent figure. This just gives me one opportunity to state for the record that I am appearing in a personal capacity for this inquiry, not as a CSIRO scientist. But the implication of that figure is that we are going to be increasing our stock of the various stores of carbon, including timber, paper and whatever else is being produced from the forest into the future. We are carbon-based life forms. We have a finite life time—so do trees, and so does wood.

CHAIR —I accept that understanding the life cycle is a very important part of that accounting process.

Dr Raupach —Exactly, yes. So a good assessment of the residence times of these carbon pools before the inevitable and eventual release of this carbon back to the atmosphere occurs is a critical part of this process.

CHAIR —Absolutely, yes.

Prof. Steffen —I just have one final comment. We need to take care not to isolate the climate change carbon issue from other values that forests provide for society and for nature. There is a lot of concern, for example, in the biodiversity conservation community that ill-conceived carbon schemes that involve forests and indeed other ecosystems could give you disbenefits for biodiversity. There is clear feeling that we need to think broadly and carefully with a whole-systems approach, not just full carbon accounting. We need that, but we need more than that. We need to look at the other benefits that natural ecosystems provide.

CHAIR —Does anyone have anything further? We are surprisingly close to our completion time. Gentlemen, I thank you very much for your time this afternoon. It has been very enlightening, if not at times challenging, which is part of this process. I declare the sitting of the committee suspended until 8.30 tomorrow morning. Gentlemen, thank you very much. It has been very interesting.

Committee adjourned at 5.37 pm