The Australian Treasury document Australia's Low Pollution Future is a major study of the economics of greenhouse gas emission control for Australia. It deserves a careful reading. In the main it argues that Australia gains some 'first mover advantages' from dealing promptly with climate change on the assumption that all countries will eventually control their emissions. Thus it is optimistic about the implications of carbon leakages.
Most emphatically it endorses the use of markets to help sort out the race to secure non-polluting new energy technologies.
I approve of the Labor Party's move to proceed with an emissions trading scheme in 2010 and oppose the Coalition move to delay introduction of the ETS on the grounds of the current financial crisis. The costs of early action in controlling greenhouse gas emissions will be low if markets come to anticipate eventual cooperative global controls. The Treasury paper shows that the costs will be relatively minor and that there are positives in acting early.