I haven't had the time to look at Garnaut's report but this...

I haven't had the time to look at Garnaut's report but this snippet from an artlicle looks promising:

"He called on the government to spend A$2.7 billion on developing low-emission technologies such as solar and wave power and clean coal, funded from the sale of permits."


CANBERRA, Sept 30 (Reuters) - Australia's economy, powered by coal-fired generators, can afford to cut greenhouse gas emissions by five to 10 percent by 2020 through an emissions-trading scheme starting in 2010, said the nation's chief climate adviser.

In his final report on the planned emissions scheme, Ross Garnaut said if Australia cut emissions by 10 percent by 2020, it would only cost 0.1-0.2 percent of annual GDP growth to 2020.

He said the emissions-trading scheme would not be inflationary if permit revenue was used to offset increased costs, but recommended the government inject A$1 billion ($800 million) into the power industry to help it adjust to the scheme.

He also stood firm on a recommendation in an earlier report that no free trading permits be issued to industry.

Garnaut handed his final emissions trading report to Prime Minister Kevin Rudd on Tuesday. The government will make a final decision on the scheme by the end of 2008 or early 2009.

Rudd has promised to recast Australia's $1 trillion economy to lower its carbon output through one of the world's most inclusive carbon-trading schemes.

Garnaut has already recommended Australia should aim to cut emissions by at least 10 percent by 2020, or by up to 25 percent if the government opts for a tougher target.

He has said carbon should be sold for an initial A$20 ($15) a tonne from 2010, with only marginal increases for the first two years to help business adjust.

"The overall cost to the Australian economy from tackling climate change is manageable...," Garnaut said in the report.

"Australia can readily afford to make unconditional and conditional policy commitments of reducing emissions by 5 percent and 10 percent in 2020 from 2000 levels," he said.

Labor prime minister Rudd has made tackling climate change and rising carbon emissions a top priority of his government, which came to power last November. Rudd signed documents to ratify the Kyoto Protocol on December 3, 2007, as his first official act after being sworn into power.

KING COAL

Australia is the world's biggest coal exporter, with coal used to generate about 77 percent of Australia's electricity.

While the country's net emissions total 576 million tonnes of carbon dioxide equivalent, or only about 1.5 percent of world emissions, Australia emits 28.1 tonnes of carbon per person, one of the highest per capita level in the developed world.

Transport and Energy account for 69.6 percent of emissions.

Australia's top industry group has said emissions trading could be a "company killer", driving big polluting power generators and cement manufacturers out of business or offshore to bases in Asia unburdened by an emissions regime.

But Garnaut said he did not envisage unemployment problems in Australia's coal mining regions in the early years of the emissions-trading scheme and said increased costs of energy could be offset using 50 percent of permit revenue.

He said Australia was well positioned to change its energy base, with good reserves of not only fossil fuels but also cleaner energy. He called on the government to spend A$2.7 billion on developing low-emission technologies such as solar and wave power and clean coal, funded from the sale of permits.

"Australia is exceptionally well endowed with energy options, across the range of fossil fuel and low-emissions technologies," Garnaut said.

"The interaction of the emissions-trading scheme with support for research...will lead to successful transition to a near-zero emissions energy sector by mid-century." For related graphics, click on:

https://customers.reuters.com/d/graphics/AU_CRBNFT0908.gif

https://customers.reuters.com/d/graphics/AU_CRBGDP0908.gif