Endorsing flawed report ensures pyrrhic victory LAST Friday, Ross Garnaut, the Prime Minister's principal climate change adviser, admitted: "Only a global agreement has any prospect of reducing risks of dangerous climate change to acceptable levels." This week, he said: "Even the whole of the developed world getting its act together and reducing emissions won't solve the problem." Remember, too, that when the Clinton administration signed the Kyoto Protocol, it was then vice-president Al Gore who warned that the US could only ratify the agreement once "key developing nations participate". This is not a controversial point; it's merely a self-evident truth that has always defined Coalition policy. Of course, it is prudent to reduce our carbon footprint, but we should do so in a way that is practical and responsible, not economically ruinous and socially destructive. Because of Australia's natural abundance of fossil fuels, our prosperity is threatened if the Rudd Government hastily embarks on a misguided approach to climate change. It is the job of a responsible Opposition to help the Government move in the right direction. Yes, climate change is real and human activity is contributing to it. And yes, practical steps to reduce carbon emissions are imperative. In the past week, however, the Coalition has been criticised for failing to give bipartisan support to the Prime Minister's plans to introduce an emissions trading scheme by 2010. But why should we make an unconditional commitment to what amounts to an unprecedented imposition on the Australian economy when the details of the Rudd Government's response to last week's Garnaut report, and the demands on the nation it might involve, are still not clear? To unconditionally support the Government's position, before it is known and without examining what it would cost or how it would work without a global agreement to cut carbon emissions and in such a short timeframe, might win applause from those who claim moral superiority in this debate. But as the alternative government, we have a duty to subject the Government's agenda to extensive scrutiny. When we released our climate change policy in July 2007, the Coalition stated that we would aim to introduce an ETS by no later than 2012. But we made other equally crucial statements in that document. We said: "We cannot solve global climate change alone. Australia must not forsake its competitive advantage for no significant impact on global emissions. Our greenhouse gas emissions represent just 1.5 per cent of global emissions. Domestic action to reduce emissions, while important, will have little meaningful impact if not part of wider international action." And this: "An effective international framework must include all major emitters." In this respect, we are simply sticking to our 2007 policy. In taking action against climate change, the Coalition will be guided by Australia's national interest. So we will proceed cautiously and responsibly, and in a way that does not undermine our international competitiveness and economic prosperity for no net environmental benefit. The Australian people expect nothing less. After all, the nation is on the verge of undertaking the most significant economic and social transformation in more than a generation. And if the Prime Minister can botch something as simple as the means test for solar panels on roofs, throwing that industry into an unprecedented downturn, he needs to be very careful about implementing an environmentally credible and economically responsible scheme that will shape future generations. Under our watch in government, Australia was one of a very small number of nations to be on track to meet its global emissions targets. We have long believed that the best way to combat climate change is to cut carbon emissions while encouraging clean technologies for an energy hungry world. And we strongly support an ETS. But a poorly designed scheme would harm Australia's economy. And it is not clear whether the Government's preferred model - the Garnaut cap-and-trade model - is flawless. We agree that the Government should set a limit on emissions. However, as we stated in our policy document last year, trade-exposed, emissions-intensive industries require policies to ameliorate the onerous impact of an ETS. Garnaut appears to back away from this commitment and we simply have no idea what the Government's position is. The Rudd Government's approach to an ETS has all the hallmarks of a giant revenue grab and centralist redistribution. In contrast, we believe Australian motorists should be protected with no new net taxes on petrol. When asked whether further increases in the price of petrol should be offset, Garnaut said: "I don't see any good reason to do it." Yet with petrol now at $1.70 a litre, Australians have already received a significant price signal on petrol. The Government appears to be placing all its faith in the Garnaut model. But there are multiple models out there that should be debated. The Australian people ought to know precisely what is the economic price of compliance with an ETS before any commitments are made. Kevin Rudd insists we have no alternative but to lead the world, but the fact is no international consensus exists. The biggest economies in the world are the US, China, Japan and the European Union. Given six minutes to address the G8 and representing less than 1.5 per cent of global emissions, Rudd should not assume that the major emitters will rally behind Australia's "lead". Japan does not have an ETS. While the Japanese Government stated barely five weeks ago it would introduce one, they - and we - have no idea what shape it will take or when it will be introduced. In the US last month, a law to create an ETS was overwhelmingly rejected in the Congress. True, both Republican and Democrat presidential candidates support an ETS. But it is not clear what form it would take and when it would be introduced. For example, every US president since the war has supported free trade but that has rarely been translated into meaningful action in the reduction of agricultural trade barriers (ditto for Japan and Europe). Most of Europe has failed to meet its mandatory carbon targets under the Kyoto Protocol, despite already having introduced an ETS. China is putting up a new coal-fired plant nearly every week, raising emissions that would overwhelm whatever reductions Australia makes. And India considers poverty a greater threat to its people than climate change. There are risks for Australia if we implement an emissions trading scheme before the rest of the world signs up to a new post-2012 global agreement in Copenhagen late next year. Design implementation in such circumstances is critical. We would need to start with a low carbon price and a near flat trajectory. Unless the nations responsible for the biggest emissions commit to effective plans to reduce them, Australian unilateral action would inflict collateral damage on the wider economy in lower growth and higher prices up and down the energy chain. It would lead to the export of our energy-intensive jobs to those nations that do not take action to reduce carbon emissions, thus worsening the emissions problem. And it would reduce the competitiveness of Australia industry and lead to lower living standards. Even the deepest greenhouse gas cuts by Australia would have a meaningless impact on global carbon emissions if the world's major emitters don't participate. The Coalition supports the implementation of an ETS. But if the Rudd Government introduces a flawed, rushed scheme it risks a community backlash that will put back the cause of responding to climate change by years. That must be avoided. Brendan Nelson is the federal Opposition Leader.