Why not reduce Australia’s 2020 CO2 emissions goal?  In an
earlier post, Judith mentioned the Institute of Chartered
Accountants and its policy paper which urged the new Government
to keep to the 2020 CO2 emissions reduction target whatever the
cost.  The government must also provide a clear and unambiguous
commitment to reaching the 2020 emissions target to reduce
carbon emissions by five percent on 2000 levels – without a
caveat on costs.  This is clearly ridiculous*. No sensible
government would ignore costs when attempting to meet a target.
Should Australia keep to the target if it costs one year’s GDP?
Or ten year’s GDP? Or all the wealth of the earth?  This is
effectively what an emissions trading scheme would achieve,
where the target is exogenous and the permit price endogenous.
But I can’t imagine a government just allowing permit prices to
rise inexorably to levels which lead to riots and threats of
revolution. No ETS,  therefore, would allow permit prices to
approach infinity. Long before then the