Worldwide tax on carbon unlikely, says forecaster


THERE IS little chance the world would agree to a uniform carbon tax to stabilise greenhouse gases in the atmosphere but without it the cost of addressing climate change would be sharply higher, according to the nation's top forecaster.
If all countries agreed to cut their forecasted 2050 emissions by 40 per cent and to impose a carbon tax, the consequences would include an estimated reduction in global economic output of up to 3.4 per cent below what it would otherwise have been, said the executive director of the Australian Bureau of Agricultural and Resource Economics, Dr Brian Fisher.
"However, the political feasibility of all countries agreeing to a harmonised carbon tax to achieve this outcome is highly questionable," he said.
A bureau report looked at how the world economy would have to change to make major cuts in greenhouse emissions. If Australia reduced its emissions 50 per cent below 1990 levels by 2050, gross domestic product was projected to be 10.7 per cent lower.
"Output from key energy-intensive industries is projected to fall between 50 and 75 per cent and the agricultural sector would also experience a 44 per cent decline in output relative to what would otherwise have occurred at 2050," Dr Fisher said.
The Prime Minister, John Howard, yesterday referred to the report to back up his rejection of a carbon tax as a way of addressing rising greenhouse gases. However, green groups criticised the report for failing to take account of the economic costs of not addressing climate change.
"ABARE's report is yet another piece of government scaremongering on why Australia cannot afford significant cuts in greenhouse pollution," said a Greenpeace energy campaigner, Catherine Fitzpatrick.