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Carbon tax better than ETS, professor says

Professor says governments should look at carbon taxes instead of emissions trading due to uncertainty surrounding climate change projections

By Brad Gardner | September 29, 2010

The Federal Government should implement a carbon tax instead of an emission trading scheme to deal with climate change, according to a university professor.

With Prime Minister Julia Gillard establishing a climate change committee to advise her on carbon pricing, University of Tasmania Professor Aynsley Kellow says a tax is the ideal policy to reduce emissions.

Kellow, who specialises in environmental policy, told ABC Radio’s Counterpoint program there is too much uncertainty in future projections about the effect of climate change for emissions trading to be effective.

“I think there’s so much uncertainty in the forward projections of climate change that a cap and trade system is inappropriate,” he says.

“To have a decent cap and trade approach you have to know what size of the cap should be. Too high a cap you get no effect, too low a cap the economic costs of mitigating are too high.”

If we accept we should be taking action we probably shouldn’t be thinking in terms of cap and trade. We should be thinking in terms of carbon taxes as a way of putting tax on carbon.”

A review of the United Nations Intergovernmental Panel on Climate Change (IPCC) cited examples of the group making statements for which were was little evidence.

“For example, authors reported high confidence in statements for which there is little evidence, such as the widely-quoted statement that agricultural yields in Africa might decline by up to 50 percent by 2020,” the review says.

The InterAcademy Council, which conducted the review, says the IPCC should only try and quantify the likelihood of an event if there is enough evidence to do so.

“The evolving nature of climate science, the long timescales involved, and the difficulties of predicting human impacts on and responses to climate change mean that many of the results presented in IPCC reports have inherently uncertain components,” the report says.

Kellow’s support for a carbon tax follows comments made yesterday by Climate Change Minister Greg Combet on putting a price on carbon emissions.

He told radio station MTR the Government could introduce a hybrid scheme of carbon taxes and emissions trading. He says the Government is still committed to reducing emissions by five percent by 2020.

Last week, Combet told the ABC’s 7:30 Report the Government would consider all carbon pricing options despite its belief emissions trading is the most efficient option.

The Australian Trucking Association says any scheme to reduce emissions must be simple and nationally consistent.

It supported the proposed Carbon Pollution Reduction Scheme (CPRS), which was defeated earlier this year.

The trucking industry was exempted from buying and trading permits under the CPRS, with the onus falling on fuel retailers. The costs would have been passed down in the form of higher fuel prices.

If passed, the scheme would have given trucking operators a one-year reprieve from higher prices. The fuel excise would have been cut by one cent for every cent increase in the price of fuel from the CPRS.

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