One of the better aspects of the carbon price package revealed yesterday is its governance arrangements. Ross Garnaut, in his statement welcoming the package, correctly singled them out as key mechanisms to introduce economic discipline into future decision-making.

The establishment of a independent Climate Change Authority to advise the Government on the operation of the carbon pricing scheme and, most critically, Australia’s emissions abatement targets, reflects similar — though more rigorous — arrangements in the UK. The requirement for the Productivity Commission to review levels of industry assistance under the scheme by 2013-14 (or earlier, hopefully) with a bias toward reducing assistance if the Commission recommends it, will enable the extraordinarily generous handouts to big polluters to be scrutinised. In both cases, resourcing has been provided under the package.

This establishes two potent, independent sources of rigorous advice on the two most critical elements of the scheme — how fast we reduce our emissions, and how hard we make it by giving incentives to big polluters to continue business as usual. Both sources of advice have the potential to embarrass future governments — indeed, that is their essential purpose. On this basis, it would not be surprising if the Coalition goes to the next election promising to scrap the Climate Change Authority, not so much to save a few million dollars a year, as to avoid an independent, authoritative body pointing out how useless its own climate change policies are.

These arrangements achieve the right balance in public policy: it must always be the role of elected officials, not bureaucrats or experts, to be the key decision makers on issues of national importance, no matter how inept politicians may be. But expert bodies, taking an independent and rigorous approach to those issues, also play a critical role in shaming reform-shy politicians into adopting better policies or at least having to justify why they refuse to.

In a debate as complex as climate change, in which many Australian newspapers are engaged in a campaign of deliberate deception about both the need for action on climate change and the benefits of a carbon price, and in an era when economic reformists are thin on the ground in federal parliament, the need for high-profile, independent expertise is greater than ever.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey