Cutting greenhouse gases costly but vital, APEC forum told

An APEC energy forum in Darwin has heard grave warnings about the economic cost of reducing greenhouse gas emissions drastically.

The Prime Minister is due to receive a report from his task force this week on the need for a carbon trading scheme.

John Howard has already warned an overreaction to climate change could cost jobs and hurt the economy.

One of the industry representatives working on the task force report, Australian Industry Greenhouse Network's John Daley, has told the forum cutting greenhouse gas emissions will be costly.

"Curtailing greenhouse emissions is a task that must be done," Mr Daley said.

"I expect the cost to be very much higher than the optimists tell us, especially if we have to effect change in sectors like agriculture and transport and it will be less costly if market instruments are used."

Federal Labor has pledged to cut emissions by 60 per cent by 2050.

Mr Daley says severe emission cuts could have severe economic consequences.

"One of ABARE's scenarios, and admittedly it's an extreme one, with Australia setting itself tougher targets than our competitors, going to 50 per cent below 1990 levels by 2050, the economic impacts are very adverse for Australia with no less than 10.7 per cent reduction in GDP by 2050," he said.

Trading

Meanwhile the former head of British Airways, Sir Rod Eddington, has warned the aviation industry it will become an international pariah if it does not accept the need for an emissions trading scheme.

Last week the Australia Institute warned that Australians will need to fly less if the country has any hope of meeting future greenhouse gas reduction targets.

He says the industry can no longer avoid committing to carbon trading.

"I'm clear that unless aviation actually is able to put itself in a position where it meets its environmental obligations then it will find itself increasingly something of a pariah in the communities it serves," Sir Eddington said.

One of Australia's leading physicists says nuclear energy will only become viable if the Government puts a price tag of more than $15 a tonne on carbon.

Professor George Dracoulis from the Australian National University was on the task force that reviewed the prospects for an Australian nuclear power industry.

He has told the energy forum that comparative cost is critical in assessing the future of green power.

"If you put a price on carbon, $15 to $40 per tonne, then coal will go up, gas will go up and nuclear and wind will be comparable in price," he said.