ANU TREVOR SWAN DISTINGUISHED LECTURES IN ECONOMICS CHARTING THE COURSE TOWARDS A LOW CARBON ECONOMY Dr Martin Parkinson Secretary, Department of Climate Change 27 November 2008

Australia’s emissions reductions under four scenarios and corresponding GNP per capita

Agriculture, Forestry and Fishing (not covered prior to 2015), 24% Buildings and construction (upstream coverage), 21% Transport (coverage at point of sale), 15% Industry and mining (coverage at point of emissions), 40% Australian emissions by major sector, 2006

Australian emissions 2006 and 2020

Agriculture, Forestry and Fishing (not covered prior to 2015), 24% Buildings and construction (upstream coverage), 21% Transport (coverage at point of sale), 15% Industry and mining (coverage at point of emissions), 40% Australian emissions by major sector, 2006

Pollution Climate damage Information Bounded rationality Investment Split incentives Infrastructure Economies of scale Innovation Industry and mining Buildings and construction Transport Agriculture Potential market failures relevant to emissions reduction policy

Pollution Climate damage Information Bounded rationality Investment Split incentives Infrastructure Economies of scale Innovation Industry and mining Buildings and construction Transport Agriculture Likelihood of market failure types by sector

Global emissions allocationsGross world product per capita Note: In the CPRS scenarios, global emissions are not restricted until Before 2025, global emission allocations are the sum of the allocations to participants and the reference scenario emissions of non-participants. Source: Treasury estimates from GTEM. Note: Values are US$ trillion, 2005 PPP weights Source: Treasury estimates from GTEM Global emissions allocations and corresponding GWP per capita

Per capita emissions allocations in selected countries under the CPRS–15 scenario

Per capita income in selected countries under the CPRS–15 scenario