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It is in our national interest to play its proportionate part in the world meeting what is now a goal that has been agreed by the international community: reducing global emissions to an extent that holds temperature increases to below 2 degrees Celsius. Australia has more to lose than any other developed country if this goal is not achieved. Australia has naturally a highly emissions-intensive economy, currently with far higher emissions per capita than any other developed country. Most other developed countries now have falling or steady emissions but, largely as a result of the contemporary resources boom, our emissions continue to increase rapidly. The naturally high emissions intensity of Australian production would not be a particular issue if there were deep international trade in entitlements generating comparable carbon prices over much of the global economy: unavoidable emissions costs would be embedded in international product prices, and Australia may be a large exporter of emissions-intensive products, and a large number of entitlements to emit greenhouse gasses.

It is in our national interest to play its proportionate part in the world meeting what is now a goal that has been agreed by the international community: reducing global emissions to an extent that holds temperature increases to below 2 degrees Celsius. Australia has more to lose than any other developed country if this goal is not achieved. Australia has naturally a highly emissions-intensive economy, currently with far higher emissions per capita than any other developed country. Most other developed countries now have falling or steady emissions but, largely as a result of the contemporary resources boom, our emissions continue to increase rapidly. The naturally high emissions intensity of Australian production would not be a particular issue if there were deep international trade in entitlements generating comparable carbon prices over much of the global economy: unavoidable emissions costs would be embedded in international product prices, and Australia may be a large exporter of emissions-intensive products, and a large number of entitlements to emit greenhouse gasses.

It is in our national interest to play its proportionate part in the world meeting what is now a goal that has been agreed by the international community: reducing global emissions to an extent that holds temperature increases to below 2 degrees Celsius. Australia has more to lose than any other developed country if this goal is not achieved. Australia has naturally a highly emissions-intensive economy, currently with far higher emissions per capita than any other developed country. Most other developed countries now have falling or steady emissions but, largely as a result of the contemporary resources boom, our emissions continue to increase rapidly. The naturally high emissions intensity of Australian production would not be a particular issue if there were deep international trade in entitlements generating comparable carbon prices over much of the global economy: unavoidable emissions costs would be embedded in international product prices, and Australia may be a large exporter of emissions-intensive products, and a large number of entitlements to emit greenhouse gasses.

I have been deeply immersed in many dimensions of the climate change question for almost four years, since I was commissioned in April 2007 by all of the State and Territory Governments and then by the Commonwealth Government as well to the undertake 2008 Garnaut Climate Change Review. At the commencement of the Review, I faced the question that confronts all who are not climate scientists and who are required for one reason or another to take a position on the climate science: how do we know if propositions put forward by some climate scientists are right? I began with some general awareness of the issues (derived in part from my association with the International Food Policy Research Institute in Washington, which was undertaking research on the effects of climate change and its mitigation on global food security), but with no strong view and no more than a common knowledge of climate change science. I did not know how strongly the main propositions of climate change science were held in the mainstream science community. I was aware of sceptical views and set out to understand them.

This is the first of eight update papers that will focus on new developments and consider whether the case for the conclusions drawn in 2008 has been strengthened or weakened. Individual papers will examine progress on: international mitigation efforts; global emissions trends; the climate science; opportunities for abatement in the land sector and biosequestration; proposals for reducing emissions, including different carbon price instruments; technology developments and innovation policy; and the electricity sector.

The threat of climate change to prosperity in one country cannot be removed by the actions of that country alone. Effective action to moderate the risks of human-induced climate change requires large contributions to reductions in emissions from all major countries, and substantial contributions from the rest of the world as well.

This update paper re-examines likely trends in global emissions in the absence of effective mitigation and in the absence of major feedbacks from climate change to economic growth. It analyses changes in the variables affecting emissions growth (namely population, economic output, energy demand, and the economic and technological factors affecting the choice among sources of energy) in major countries and regions. It explores the implications of the Great Crash of 2008, which lowered the long-term growth trajectory of developed countries, but did not slow the immense growth momentum of the largest developing countries, nor end the higher growth of the early twenty first century in other developing countries.

Australia has always been a country of climate extremes. The health of Australian farming will continue to depend on effective management of weather and climate uncertainty. It is increasingly clear that the world is moving towards more rapid and severe climate change. The science is telling us that climate change will be associated with significant warming, which will change optimal planting and harvesting times and the crops, cultivars and animal types that do well in each region. It will reduce water run-off even if there is no general effect on rainfall, and so reduce water available from rivers and streams for irrigation. It is likely to increase the intensity of extreme events: heatwaves and associated bushfires; cyclones in tropical regions; episodes of exceptionally high rainfall; and drough. The impacts of accelerating climate change will intensify the climatic challenge to rural Australia. The scientific evidence is considered in Update Paper five.

The Garnaut Climate Change Review was commissioned by the Commonwealth, state and territory governments in 2007 to conduct independent study of the impacts of climate change on the Australian economy. I presented the Garnaut Climate Change Review: Final Report to the Australian Prime Minister, Premiers and Chief Ministers in September 2008 in which I examined how Australia was likely to be affected by climate change, and suggested policy responses. In November 2010, I was commissioned by the Australian Government to provide an updated to the 2008 review. In particular, I was asked to examine whether significant changes had occurred that would affect the analysis and recommendations from 2008.