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Productivity Commission's input should be heavily discounted.



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Christine Milne

Australian Senate Australian Greens Senator for Tasmania

media release

Productivity Commission's input should be heavily discounted

Hobart, Friday, 25 January 2008 Australian Greens Climate Change Spokesperson, Senator Christine Milne, said today that the Productivity Commission's attempt to influence the Garnaut Review was morally and ethically bankrupt and should be heavily discounted.

Senator Milne said "The Productivity Commission's clear attempt this morning to influence the outcome of the Garnaut Review may be written in detached and academic language, but its purpose, to postpone serious greenhouse gas emission reductions, is political.

"The Commission's characterisation of the Stern Review as advocacy rather analysis can be equally applied to this morning's Staff Paper and much of what has been published by the so-called politically neutral and independent body over many years.

"In climate circles, the Productivity Commission is remembered for a 2005 paper which got energy efficiency completely wrong. Hopefully the new Government will not take today's paper to heart the way their predecessors adopted the 2005 paper.

“Much of the critique in today's Productivity Commission Staff Paper lies in the application of a discount rate to the value of human life, and the Commission is quite right to say that this is an ethical and moral question. But surely the basic assumption, as Stern concluded, must be that a life today is equivalent to a life tomorrow, and there should be a zero discount rate applied.

"Anyone putting forward models that value a human life in 50 years time as a tiny fraction of its current worth, as would be the case if a discount rate typically applied in a conventional cost-benefit analysis (around 6%) was used , is putting forward a position so divergent from cultural norms that it is surely more advocacy than analysis. While the Productivity Commission is not advocating one value rather than another in today's paper, their suggestion that the discount rate should be higher rather than lower is clearly part of their ongoing advocacy campaign to undermine climate action.

"If the Productivity Commission staff bothered to follow climate science, they would realise that Stern's choice of the IPCC's upper band of warming is now being proven to be conservative. Climate impacts are shooting ahead of the projections, leaving policy way behind. Now is not the time for more rearguard action to delay emissions cuts.

"Of all the analyses of Stern, I find the conclusions of the UK Conservative Party most telling. They state: 'we believe that Stern was actually too complacent, both in terms of the high emissions target he recommended as acceptable and his calculations of the likely cost of climate change impacts.' "

Contact: Tim Hollo on 0437 587 562