Australian Economists argue over the economic effects of carbon constraints

ABARE says they will SLASH GDP

Meanwhile -- The Allen Consulting Group says effects will be minimal "Greenhouse Report 'No Disadvantage'

and the Feds say 'Australia will not impose significant new economy-wide costs, such as emissions trading, in its greenhouse response at this stage.

Greenhouse gas cuts 'could slash GDP'

Achieving deep cuts to Australia's greenhouse gas emissions would slash the nation's GDP and require massive reductions in industry output, a new report suggests.
The scenario is among six options for cutting global emissions explored in a report by the federal government's commodities analyst, the Australian Bureau of Agricultural and Resource Economics (ABARE).
One model would see Australia moving ahead of other nations, reducing its emissions to 50 per cent below its 1990 levels by 2050.
But the ABARE report said that would shave 10.7 per cent off Australia's GDP by 2050.
Output from key energy-intensive industries including oil and gas were projected to fall between 50 and 75 per cent, while output from the agricultural sector would drop 44 per cent compared with what would otherwise have occurred by 2050, the study found.
All the scenarios presented in the ABARE report work from a reference case that assumes global greenhouse gas emissions increase by about 144 per cent between 2001 and 2050.
Developing nations including China and India would account for a big share of that growth.
The models aim to stabilise atmospheric carbon dioxide levels at 575 parts per million by the year 2100.
That would mean achieving a 40 per cent cut to the current global projections for greenhouse emissions by 2050 - a task ABARE acknowledged was a big ask.
"If all countries were to agree to reduce their emissions and to impose a tax on carbon, the consequences of achieving such an emission abatement outcome include an estimated reduction in global economic output of 2.6 to 3.4 per cent below what it would otherwise have been in 2050," ABARE executive director Brian Fisher said.
"However, the political feasibility of all countries agreeing to a harmonised carbon tax to achieve this outcome is highly questionable."
The scenario in which Australia chases the biggest cut to its emissions also assumes the country has a single nuclear power plant operating by 2020.
But another model, in which Australia has no access to nuclear power and does not begin major efforts to reduce emissions for another 20 years, would deliver the smallest cut to GDP - just 1.75 per cent by 2050, the report said.
This scenario represents the implementation of a hypothetical worldwide policy to reduce greenhouse gas emissions, beginning in 2030.
The model assumes Australia and the rest of the world have, by this time, gained access to all potential emissions abatement technologies, including options for capturing and storing carbon emissions.
Dr Fisher said it would be difficult to achieve big reductions in greenhouse gases where a large number of developing countries failed to constrain the growth in their emissions.
Technology, he said, would play a key role through collaborations such as the Asia Pacific Partnership on Clean Development and Climate, of which Australia is a member.