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Accept climate science, economists told

29 Jun, 2010 01:00 AM
Economists must trust predictions from climate scientists and stop tinkering around the edges of the climate change debate, a top federal bureaucrat said last night.

The secretary of the Department of Climate Change and Energy Efficiency, Martin Parkinson, used the 2010 Sir Leslie Melville lecture to argue economists had not been adding enough to the national carbon pricing conversation. ''Despite 15 years of thinking on this issue, there are few Australian economists who could discuss any of the emissions trading scheme's design concepts, choices and trade-offs in detail,'' Dr Parkinson said.

The lecture at the Australian National University in Canberra was the ninth of its kind to honour Sir Leslie Melville, the late executive director for Australia at the International Monetary Fund and World Bank.

Dr Parkinson said foresight of the kind Sir Leslie had would be needed to introduce an emissions trading scheme.

Economists Ross Garnaut and Warwick McKibbin were, in Dr Parkinson's words, two rarities who had the in-depth knowledge of abatement schemes needed to lower carbon use. Dr Parkinson, an economist and former Australian Treasury deputy secretary, said the economic community needed to embrace a gradual transition to greenhouse gas reduction.

''Economists prefer to be pure in their proposed solutions to problems and are suspicious of politically negotiated outcomes and transitional assistance,'' he said.

There have been unsuccessful attempts to introduce a carbon price for 15 years.

Dr Parkinson said this should not be considered failed economic reform.

The GST was an example of a policy discussed and attempted 15 years before being brought in.

''Tariff reform was formally proposed by the Tariff Board in the mid-1960s ... and debate has continued over the 40-plus years since the Tariff Board's original proposals.

''Stiff opposition was a regular occurrence in relation to proposals to reform indirect taxation, the labour market and tariffs.

''For example, the gold industry was adamant that it would cease if gold's tax exempt status were removed.''

Lack of serious engagement from economists about climate change had deprived the public of important information. He put forward the argument that economists should believe in climate change because of the evidence provided by the scientific community.

''It is probably reasonable that economists without expertise in the relevant scientific disciplines should let scientists be the professional experts in this area,'' he said.

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Martin Parkinson says debate is being stifled by lack of engagement by economists.
Martin Parkinson says debate is being stifled by lack of engagement by economists.

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