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Stern's new reports warn for urgent action on climate change

Emma Alberici reported this story on Wednesday, December 2, 2009 12:21:00

ELEANOR HALL: Britain's leading climate change economist Nicholas Stern has released two new
research papers that he says he'll take to Copenhagen to help convince world leaders to take
action.

At the launch of his reports, Lord Stern took a swipe at global warming deniers, calling them
muddled and confused and he said that Australia should be leading the world in cutting back its
carbon emissions.

Europe correspondent Emma Alberici spoke to Nicholas Stern at the launch.

EMMA ALBERICI: Nicholas Stern, how important is it that an emissions trading scheme form part of
Australia's reaction to climate change?

NICHOLAS STERN: Australia is a rich country. Australia has very high emissions per capita, similar
to United States and Canada. People will look to Australia to take strong action. What Australia
does really matters. Now that means that the first and most important thing is to have a clear,
strong program for cutting emissions.

I think that an emissions trading scheme would be a vital part of such a program. Carbon tax is OK
too and many countries will use the two in combination. But what we do need is strong targets for
cutting emissions in the rich countries of the world, including Australia, and clear ways of
implementing that, be it emissions trading or carbon tax or in all likelihood a combination.

EMMA ALBERICI: Isn't the whole objective of an emissions trading scheme or indeed a carbon tax to
change behaviour and in doing so putting up the price of carbon to the extent that it makes it
unviable to use carbon to fuel your economy? And by virtue of that, doesn't it mean you decimate an
entire industry, and in Australia's case, one that we rely on?

NICHOLAS STERN: It is exactly right that we want to discourage, as a world, because it's extremely
dangerous, the emissions of greenhouse gases and putting a price on greenhouse gasses. Trading
scheme or taxation discourages the use of activities and energy sources that release carbon. That's
the point.

But what we should recognise is that there are very strong alternatives and that Australia is well
endowed in those alternatives. The world is moving quickly to low or zero carbon energy. Solar,
wind, nuclear, waves, there's a whole range of things and Australia is probably pretty well suited.
Carbon capture and storage, Australia has a lot of holes in the ground to put things in. Australia
has comparative advantage in carbon capture and storage.

So we will be setting off down a road, indeed we've already set off. China, Korea is looking very
closely at these technologies. Down a road which is low carbon. And Australia actually risks real
economic problems if it turns itself into one of the dirty economies in the world. Because they
won't be seen favourably in international action and it's going to damage the economy by not going
down that route.

EMMA ALBERICI: At Copenhagen and beyond, what happens to countries that don't live up to their
obligations? Is there any penalty regime? Is there a stick that comes with the carrot?

NICHOLAS STERN: Look, there's no Martian with a great stick that's going to swoop down and start
beating people over the head if they don't perform. But it will be international competitiveness,
we'll see great competition to be clean, we'll see countries developing new technologies.

So the first force is competition and what people expect, but the second force is the force of
public opinion and I believe that people in countries around the world, thinking about their future
and the future of their children and grandchildren, will demand that their governments behave
responsibly.

So it'll be the forces of competition, those who stay dirty will start to be marginalised and it
will be the force of public opinion, that's what really counts.

ELEANOR HALL: That's British climate change economist Sir Nicholas Stern speaking to the ABC's
Europe correspondent Emma Alberici.