I don’t usually respond to posts on Catallaxy, but I will try on this occasion to fix up what I hope is simply a misinterpretation. Responding to the recent proposal by the Climate Change Authority (of which I am a member) for an emissions reduction target of 30 per cent, relative to 2000 levels, to be achieved by 2025, Sinclair Davidson picks out the following sentence
As noted earlier, the Authority is not in a position to prepare meaningful estimates of the costs of meeting its recommended target, primarily because many of these costs will depend on the policies adopted.
Wow. Really wow. Let’s adopt a policy even though we have absolutely no idea how much it will cost.
This is a serious misreading. As the report says, there a variety of ways in which this target might be reached. There are the methods favored by economists, involving a major role for carbon prices. Costs of achieving emissions reductions using these methods have been estimated on many occasions. The invariable finding is that carbon prices can achieve large-scale reduction si emissions very cheaply.- typical estimates are for a reduction in the rate of economic growth of around 0.1 percentage points. Or, there are much more expensive methods, such as a massive expansion of the current government’s Emissions Reduction Fund (on which more later, I hope).
Since we don’t know what policy this, or a future government, might adopt, we can’t estimate the cost. So, to rephrase Davidson “Let’s propose a target even though we don’t know how the government, should they adopt it, will choose to achieve it”. That is, of course, exactly what the government asked the CCA to do in this report.