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The long awaited “Draft Report” into climate change by Ross Garnaut was released yesterday. I’m not among the few who have read it (537 pages) so any comments are based on newspaper and internet reporting and analysis.

It seems to be conveying the same general message as the Stern report: the science says climate change is inevitable unless drastic CO2 emission reductions are achieved. Devastation to the Great Barrier Reef, Kakadu flooded and further damage to the Murray Darling basin are all envisaged. Since Stern, science is coming to the view that change is happening more rapidly therefore the costs of inaction have also increased.

 Garnaut (an economist like Stern) has proposed an emission trading scheme (ETS, another TLA we will all become familiar with). Stern seemed to say that emission reductions could be made with little economic pain, but Garnaut is less optimistic here. He discusses the need to compensate those parts of the community which will be most affected. 

The report was commissioned when the Labor Party was not in power and was to be the blueprint for future actions if Labor achieved government. Now that Kevin Rudd is Prime Minister,  the report is “just one input into the Prime Minister’s thinking”. Garnaut’s response that “he’s just one input into mine” highlights that the Government has moved from full commitment. The political challenges in implementing any of the recommendations are formidable, especially for Rudd who shows a disinclination to make any decisions that might upset any group. The opposition party is still expressing caution and pushing the line that as a small nation we should not take risks that might hurt our trade. The recent drastic rises in petrol prices have made clear that our energy spending is an important part of the household budget.  

The report envisages the ETS beginning in 2010: I am not optimistic that anything will happen so quickly. If it wasn’t so important, I’d enjoy watching the politicians squirm as they try to reconcile effective action and getting re-elected.

Garnaut has recommended spending on renewable energy research including a major effort in “clean coal” technology - another area I’m less than confident about.

I recently speculated that the 2008 Australian budget would announce increased funding for green initiatives. Now that the budget has been tabled, the solar panel industry is reeling from the decision to reduce the upper limit of family income for eligibility for the rebate - it was $150,000 and now is $100,000. Even with rebates, solar panels have a long economic pay back period but without rebates few people will ever see a positive financial return.

My home state of Victoria had weeks earlier reduced its feed-in tariff for people generating solar electricity. The combined effects of these decisions has seen a large number of cancellations of orders.

Both these decisions point to the reality that governments are willing to promise to achieve carbon dioxide savings by, say, 2020 but are much less willing to do something with impacts in 2009. The signals being sent are not promising. 

The title of the post is copied from an article onThe Oil Drum blog. The two main points made are that Europe is heavily reliant on natural gas, and that the production from the European fields is either declining now, or will start to decline soon.

Natural gas provides 29% of Europe’s primary fossil fuel. Demand has increased by a factor of 19 over the last 40 years.

A supply shortfall is predicted to occur around 2013. Even the massive Russian fields are no longer increasing production, and with internal demand increasing, exports to other European countries are likely to lessen.

European demand peaks in the Northern winter, putting pressure on supplies world-wide. Even in Australia LPG prices as an automotive fuel rise in our summer because local fuel prices are set according to the Saudi contract price. Australian gas does not appear to reach Europe, but is exported mainly to Japan and China.