Australia 3000 preview, C02 - thinking of next generation to survive

Australia's desert is largely gone. Computer studies suggest that even with our low CO2 levels, Aussie climate has two stable states, one dry, one with monsoon rains, and it'd take very little to bring the forest back. Even in our time, there are plans to replant the desert and tip the balance over. As the bumper sticker says, "trees cause rain..."

RESERVE Bank board member Warwick McKibbin has warned the proposed carbon trading scheme will make Australia's economy more vulnerable to global economic shocks.

The respected ANU economist, who has been advocating a hybrid tax and permit trading scheme to provide price certainty and flexibility in reducing greenhouse emissions, warns today the Garnaut model is likely to cause unexpected problems if operating during future financial shocks. He also warns future global shocks will have a wider impact and spread faster under a global cap and trade emissions trading scheme.

“We found that a global cap and trade regime would be extremely vulnerable to shocks in any single economy. They would change the way that growth shocks would otherwise be transmitted between region,” Professor McKibbin says in research released today.

“Price-based approaches, such as a global carbon tax levied at a national level or our Hybrid model provide stronger firewalls to prevent adverse events in one carbon market causing a collapse of the global system.”