Political uncertainty causing economic losses

Continuing political uncertainty around the solution to climate change is causing economic losses and the major political parties must work together to solve the problem, according to a leading climate change expert.

Professor Warwick McKibbon, director of the Reserve Bank of Australia and executive director of the Australian National University College of Business and Economics, has warned that the Labor and Liberal parties must come together to ensure Australia’s response to the climate change issue isn’t decided by minor parties in the Senate, stating that the major parties’ policies on climate change are closer than many would realise.

“It’s critical for the Government to strike the right balance between environmental gains and economic costs,” McKibbon said.

“We’re not looking for the best policy, we’re looking for the policy that doesn’t screw the economy by mistake.”

Speaking at the Investment and Financial Services Association national conference on the Gold Coast, McKibbon said Australia’s “fixation with targets and timetables is taking the world in the wrong direction”, and that focusing on a ‘concentration’ target rather than a ‘flow’ target when it comes to carbon emissions is more relevant.

The professor argued that when it comes to climate change, science cannot provide answers or limits, only guidance. McKibbon also said different climate change management systems would emerge in different countries, stating that there would never be a global market for carbon permits because they rely on the promise of a government, the value of which differs from country to country.

McKibbon reminded delegates that whatever the outcome, the climate change issue would change the fundamental structure of the world for decades to come.