Sunday, July 06, 2008

Garnaut's Otherwise Dismal Report

Economics is called ‘the dismal science’. Ross Garnaut is an economist. And all the news seems bad because Professor Garnaut often presents the worst case scenario. Even though he also presents more optimistic outcomes, readers and journalists are naturally focussed on the bad news. He should use the words “If nothing is done to stop it happening” after each worst case statement:

• By 2100, production in the Murray-Darling Basin will have fallen by 92%. (If nothing is done to stop it happening.)

Professors can hold more than one thought in their mind at a time. But the rest of us are less flexible. If people remember only the bad news, they will lose heart. There is a short distance between awareness and despair in the climate change issue.

• “Growth in emissions is expected to have a severe and costly impact on agriculture, infrastructure, biodiversity and ecosystems in Australia.”

• “The emissions trading scheme and associated mitigation policies will contribute to large structural change throughout the Australian economy. The changes will be most profound in the sectors in which emissions are most important… energy… transport, and agriculture….”

• “Crop production is likely to be affected directly by changes in … rainfall and temperatures… Livestock industries will be influenced by the changes in the quantity and quality of available pasture...”

• “The hot, dry extreme case has devastating consequences for the Australian wheat industry, leading to complete abandonment of production for most regions.”

• “Australia will not be immune from the consequences of climate-induced migration in Asia and the Pacific… significant population displacement caused by sea-level rise, declining agricultural production, flooding, severe weather and step changes in the climate system are all distinct possibilities.”

• “The key Australian export markets in China, India, Indonesia and elsewhere in Asia are projected to have significantly lower economic activity as a result of climate change. A slowdown… would be associated with a decline in international demand for Australia’s mineral and energy resources and agricultural products.”

• Export volumes: “Agriculture is the most affected sector in the economy, reflecting the very large productivity losses in the sector [because] increased temperatures and reduced rainfall are likely to cause substantial reductions in agricultural output.”

• “Mitigation has costs; and no degree of mitigation commenced in 2008 or 2010 will avoid all of the costs of climate change.”

The news was not all bad.

• “The modifying impact of adaptation is exemplified by Australian agriculture. Better and earlier knowledge will allow farmers to make timely decisions on whether new money should continue to be invested in locations that seem to be severely damaged by climate change, or whether it is better to find new livelihoods in less challenging locations. Investment in plant and animal genetics may be able to diminish the loss of productivity associated with higher temperatures and changing rainfall patterns. Investment in water retention or storage will sometimes be an economically sensible response to more variable rainfall.”

• “Under the no-mitigation case and through adaptive management much of Australia could experience an increase in wheat production by 2030. This is attributable to the farm-scale (autonomous) adaptive management considered(that is, moving planting times in response to warming and selection of optimal production cultivars) and increases in growth and water-use efficiency resulting from higher carbon dioxide concentrations.”

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