"Carbon pricing will not, by itself, lead to the ... innovation we will need" ... Andrew Charlton.

"Carbon pricing will not, by itself, lead to the ... innovation we will need" ... Andrew Charlton.

CARBON pricing can deliver incremental reductions in rich countries' greenhouse emissions but will not drive the discovery of cheap sources of clean power that are the only hope of stopping dangerous climate change, a former senior adviser to Kevin Rudd says in a new essay.

Andrew Charlton, who was so close to the former prime minister that some colleagues called him "the muse", says the world needs to admit that efforts to reach a legally binding global climate change treaty have failed.

As environment and climate ministers once again head off to an annual United Nations meeting, this time in Durban, which again has no chance of clinching an international agreement, Dr Charlton says the world needs to shift to a "plan B", focusing on research to find cheap clean power that all countries will want to use.

He now sees carbon pricing, which helped cost his former boss the prime ministership, as a way to "deliver incremental reductions in rich countries' emissions over time".

"Carbon pricing will not, by itself, lead to the infrastructure investment and technological innovation we will need to reach our long-term targets. But this is not to say that such a scheme doesn't have benefits,'' he writes in his Quarterly Essay entitled ''Man Made World''.

''By increasing the cost of fossil fuels (especially coal-generated electricity), the carbon price encourages energy efficiency … It also tilts the balance away from coal and towards 'near commercial' technologies such as gas-fired power stations.

"For two decades our solutions to climate change have focused on a global treaty to enforce emissions cuts and a global framework to increase the cost of fossil fuels. In Copenhagen, both of these policies failed. Poor countries would not sign a binding treaty which may compromise their ability to find a path out of poverty. And they would not accept any scheme which increases the cost of energy for their citizens … If Copenhagen taught us anything, it is that we need a new approach.''

Dr Charlton accuses the Greens of misleading their supporters when they claim Australia can source 100 per cent of its energy from renewable sources within decades, because renewable energy technology is not at present good enough to tackle climate change at a reasonable cost.

He says the environmental movement is misguided in its opposition to clean coal and nuclear power.

"Green campaigners who insist that deep near-term emissions cuts can be achieved with a mix of conservation, wind and solar are wrong. They haven't done the maths … Renewables will not, by themselves, be enough. We will need to mobilise every clean-energy technology we have. In some countries that will include nuclear. And it will include clean coal," he says, citing International Energy Agency findings that without clean coal, the overall cost of tackling climate change increases by 70 per cent.

He takes an apparent swipe at the Gillard government's "Clean Energy Future" slogan.

"The conventional wisdom asserts that pricing carbon through 'market mechanisms' is the best and lowest-cost way to reduce greenhouse gases. This view is backed by a tide of political rhetoric about the ability of such pricing to 'unlock' investment in new technologies and deliver a 'clean-energy future'.

"Unfortunately, both the political rhetoric and the conventional wisdom are wrong. Emissions trading schemes will find the most efficient way to reduce emissions from existing technology, but they are not particularly effective in bringing forward the technologies of the future," he says.

The Gillard government's plan does include big investments in new energy infrastructure and research funding, which Dr Charlton says is the way forward.

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