Prof Garnaut Lecture Series - Lecture 2: The Complex International and Domestic Economics of Climate Change
Prof Ross Garnaut will deliver a six-part seminar series on the challenges and opportunities of energy transition in Australia. The seminars, which will also be available by webinar, will build the case for the energy transition calling on knowledge of climate science and studies of the economic benefits of mitigation.
A sectoral analysis - covering in particular the electricity sector, transport and industry, and agriculture - will draw out the economics of technological innovation, the falling costs of renewable energy, and the capacity for sequestration in the land, with insight into the role of the mineral sector in strengthening Australia's position in a low-carbon economy.
Lecture 2: The Complex International and Domestic Economics of Climate Change
Climate change represents an unusually complex economic policy challenge, as there are a range of distributional effects of the costs of climate change and its mitigation across countries and generations. How do we value the living standards of people living now against those living in future? How do we value the costs of climate change and its mitigation in rich countries against those in poor countries? Further, a range of policy instruments can be applied to mitigation, and numerous factors inform under which circumstances carbon pricing and regulatory measures are more effective.
This lecture begins with a discussion on measuring the costs and benefits of action to reduce damage from climate change and acknowledges some of the questions raised concerning the economic value of mitigation, in particular, what level of temperature rise compared with pre-industrial levels is economically justified. The discussion considers the case for international trade in emissions entitlements and examines the economics of technological innovation and its relevance to the transition to a low carbon economy. It also discusses the role of public institutions such as ARENA and the Clean Energy Finance Corporation. Finally, the lecture discusses how the historic twenty first century fall in the cost of capital favours renewable energy sources over fossil fuels, which in turn supports the transformation of land use and more generally favours action to secure the interests of future generations.
Thank you to event hosts the University of Melbourne, in particular, the Department of Economics in the Faculty of Business and Economics, the Melbourne Energy Institute, the Energy Transition Hub, and the Melbourne Sustainable Society Institute.
Ross Garnaut is an economist whose career has been built around the analysis of and practice of policy connected to development, economic policy and international relations in Australia, Asia and the Pacific. He was Distinguished Professor of Economics at The Australian National University and currently holds a part-time research position as Professorial Fellow in Economics at the University of Melbourne. He is the author of many influential economics books and papers.
Ross held positions as Chairman of the Boards of large Australian and international companies continuously from 1988 to 2013, including Lihir Gold Limited, from its foundation in 1995 to its sale to Newcrest in 2010 for $10 billion (listed on stock exchanges in Australia, Canada and the United States), the Bank of Western Australia, the Primary Industry Bank of Australia, Aluminium Smelters of Victoria, Lonely Planet Publications, the Papua New Guinea Sustainable Development Program Limited and its subsidiary Ok Tedi Mining Limited.
He has held a number of senior Government positions, including as head of the Financial and Economic Policy Division of the Papua New Guinea Department of Finance in the years straddling Independence in 1975; principal economic adviser to Australian Prime Minister Bob Hawke; Australian Ambassador to China (1985-88). He has led many high-level Government Reviews and Commissions, including the preparation of the Report to the Australian Prime Minister and Foreign Minister ‘Australia and the Northeast Asian Ascendency’ (1989); the Review of the Wool Industry (1993); the Review of Commonwealth-State Funding (2002); and the Garnaut Climate Change Reviews (2008 and 2011). He was Chairman of the Australian Centre for International Agricultural Research 1995-2002 and Trustee and Chairman of the International Food Policy Research Institute 2003-10.