The long awaited Productivity Commission report detailing what other nations are doing to reduce national greenhouse emissions was released yesterday, and it managed to provide comfort to all sides of the climate change argument, while completely ignoring the single policy measure adopted in Australia that has had most impact in reducing national emissions.

The Productivity Commission report concluded that (a) most nations had some policies in place to reduce emissions, (b) no nations had economy-wide policies such as an ETS, (c) Australia was neither lagging behind or ahead of the pack when it comes to comparing efforts to reduce emissions, and (d) any comparison between different national policies is fraught with uncertainty, and in fact it is almost impossible to make any real comparisons.

Despite the uncertainty and the qualifications, politicians made of it what they required. Treasurer Wayne Swan said it proved that "Australia risks falling behind the rest of the world if we fail to put a price on pollution."

Tony Abbott saw it somewhat differently. In an interview during a visit to a coal mine he stated "We’ve also seen today the Productivity Commission report which confirms what the Coalition has been saying: there is no other comparable country which is imposing an economy wide carbon tax on itself. There’s no other comparable country which is imposing an emissions trading scheme on itself. What that means is that any move towards a carbon tax or emissions trading scheme would be an economic own goal. It would be an act of economic self-harm by Australia."

Key Independent politician Tony Windsor had another interpretation. In an interview on ABC TV he stated that he didn't think the results of the research were a 'game changer". He continued "But it does answer two substantive questions that I raised probably six months ago now; one being is the rest of the world doing something, or is it doing nothing? I think the answer is yes, the rest of the world is moving in a direction. The second one I think has been obvious to anybody in recent months, is that if you are going to address this issue, a carbon pricing mechanism is the way to address it."

Interviewer Tony Jones did point out the obvious - namely that if Australia was already in the middle of nations in terms of actions to reduce emissions, wouldn't a carbon tax or ETS put Australia ahead of the pack and reduce national competitiveness. In response, Windsor pointed to recent UK announcements about more ambitious targets (although as even climate change campaigner George Monbiot has pointed out, the recently announced UK initiatives basically amount to getting other nations to produce the emissions associated with things that UK consumers use).

Perhaps the most significant part of Windsor's interview came when he was asked about the Oppositions "Direct Action" proposal, which involves paying farmers to plant trees or sequester soil carbon. In response Windsor stated;

TONY WINDSOR: Well I don't think you achieve the level of change in behaviour or emissions reduction through those sorts of schemes. I'm not suggesting they shouldn't happen. In fact I'm an advocate that we should look at soil science and some of the biodiversity issues, because they have a lot of other positive benefits. Some of the soil science issues, for instance, may or may not eventually get into some sort of market mechanism. To me, as a farmer, I don't think it matters if they don't get into a market mechanism. Some of the technologies that are out there are very good for productivity, and if we can use some of the revenue stream from an emissions trading scheme or a carbon tax or whatever it happens to be to go towards research and development in some of the landscape issues, I think it'd be very positive.

This seems to be a hint that a promise of a large amount of carbon tax revenue devoted to soil carbon research might be enough for Windsor to agree with the Government's proposed carbon tax.

The curious part about the whole Productivity Commission report was that there was not one single mention of the single most significant policy that Australia has adopted to reduce emissions. That is the bans that were imposed on tree clearing on farms by the NSW and Queensland Governments (at the behest of the Commonwealth Government) in the late 1990s and early 200s. The resulting reduction in national emissions is the only reason Australia's current emissions are at about 108% of 1990 emissions, rather than 140%, and well in excess of the national Kyoto Protocol target.

The Productivity Commission carried out a major review of land clearing policies in 2004, so it is curious that the policy measure fails to get any mention in its report. ABARES also carried out several research projects examining the cost of the policies on farmers, so there was plenty of information available about the costs and impacts. Perhaps the Productivity Commission has lost some corporate memory, or perhaps it just 'didn't want to go there' an risk highlighting that were it not for these policies, Australia's emission performance would look much worse than it is!



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