THE US has vaulted ahead of Australia in tackling climate change despite its emissions trading plan having stalled, in part by blocking new coal-fired power stations, government climate adviser Ross Garnaut has warned.
In a wide-ranging interview, his first outlining the advice he will give to Julia Gillard's multi-party climate committee, Professor Garnaut flagged a campaign over the next year to educate Australians that most developed countries and China were doing far more to reduce emissions than most people realised.
Evidence that Australia was in no danger of leading the world on carbon policy will be used to argue that businesses should not be offered a ''free kick'' through unwarranted levels of compensation when the government prepares to introduce carbon price legislation next year.
Advertisement: Story continues below Professor Garnaut said national and state regulations had made it ''extremely difficult'' to open a new coal plant in the US despite emissions trading legislation having been blocked in its Senate. Carbon trading was operating in the north-east, and many states had taken steps to regulate energy use and the emissions intensity of power plants.
''We would kid ourselves if we pretended quite a lot wasn't happening in the United States,'' the senior economist told The Age.
''Astute observers are saying there may be no more coal-based power investment in the US, and through the Environment Protection Authority and local action there is very strong pressure to close down a lot of coal-based generation.''
Professor Garnaut said the US had been more ''rational and realistic'' than Australia in realising new, high-emitting power plants would be shut down early as the world moved to cleaner energy. He said there was also a ''striking ignorance'' in Australia about how much China had accelerated its climate policies over the past year.
''We have to do a lot more than we are doing now to just be an average performer compared to other developed countries and China,'' he said.
Professor Garnaut has been asked to release an update of his 2008 report on the economics of climate change by May - before the Greens take the balance of power in the Senate in July.
A comparison released this week by the Climate Institute found most of Australia's trading partners were doing more to factor in the cost of emissions. The equivalent carbon price on the power industry was eight times higher than Australia in China, and three times higher in the US.
The Climate Institute analysis was ''a very good first step'' that probably underplayed how far Australia was behind China and the US, Professor Garnaut said. He also noted that:
o The case for industry compensation may have weakened since 2008. There was no need to compensate an industry unless it was paying a higher carbon price than its international competitors.
o He was hopeful the carbon debate would be based on rational economic analysis, not a repeat of the "political pushing and shoving" over Kevin Rudd's discarded emissions scheme.
o Carbon capture and storage was likely to be economically viable, but not everywhere. It was more likely to work where energy costs were low and sites for burying emissions were close."
