The possibility of success at Copengaen will, IMHO, depend primarily on negotiators' confidence of the treaty being both :
efficient in cutting global GHGs fast enough to avoid more than two degrees of warming;
and demonstrably equitable in allocating responsibilities for it to be politically durable within and between nations.

Garnaut plainly sees this, and is helping to build that vital confidence via the report's statements on the treaty's potential framework of "Contraction & Convergence."

Excerpt from the report :

"It is unlikely that any allocation of a global trajectory for emissions
entitlements will be seen as being fair if it is not based on the idea
that, sooner or later, there will be equal per capita rights to use the
atmosphere's limited capacity to absorb more greenhouse gases.

To be seen as being practical, it will need to allow some time to move
from the currently highly unequal assumption of emissions rights across
countries, to equal per capita rights.

The basis thought to be most likely to be successful is what has become
known as `contraction and convergence', modified to allow faster growth
in emissions from fast-growing developing countries for a transition
period.

This approach addresses the central international equity issue simply
and transparently. Slower convergence (a later date at which per capita
emissions entitlements are equalised) favours emitters that are above
the global per capita average at the starting point. Faster convergence
gives more emissions rights to low per capita emitters. The convergence
date is the main equity lever in such a scheme."
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Under this C&C framework, national allocations of emission rights will shift increasingly to developing nations, allowing them to trade surplus  permits to industrialized states in need of them.

The degree to which nations can buy permits from abroad, rather than verifiably reducing actual emissions,
and the degree to which permit-sales' revenues are verifiably ring-fenced to emissions reduction investments,
are two critical areas of negotiation if the resulting treaty is to be efficient in its operation.

That said, it is surely very good news indeed that Garnaut, (mentor to Premier Rudd, who has fluent Cantonese) has come out clearly with this very public endorsement of Contraction & Convergence as the treaty's preferred framework.

Regards,

Billhook

Garnaut assumes that reaching international agreement to stabilise carbon emissions at 450ppm or less is virtually impossible, and that the only internationally politically feasible target will be 550ppm, despite the fact that (as he acknowledges) this virtually guarantees the loss of priceless national assets such as the Great Barrier Reef, and runs the considerable risk of truly catastrophic outcomes. His report therefore describes the most economically prudent path through that particular world. The carbon reduction target he presents is the one Australia would likely be required to adopt under that 550ppm regime. He also says that stabilising at 450ppm would be very much more preferable and would cost only 1% of GDP more than 550ppm, but regards this as a moot point as this lower target is politically unattainable anyway.

A carbon reduction scheme is coming, and the question for business now is who is going to get the most free money under the scheme in order to 'soften the blow of transition'. Every industry group has therefore produced its own report describing its special vulnerability to carbon trading, forecasting catastrophe for that sector if special concessions are not made. If you listen to them all at once, you'd think the Australian economy itself won't survive the introduction of the legislation, but their modelling was never intended to be taken seriously anyway, and Garnaut's own just-published figures offer a much better estimate of the economic effects.

Garnaut is deeply, deeply pessimistic. He believes that the 550ppm target entails catastrophe, with the only question being how much catastrophe how soon. His report adopts this target anyway only because no other target is politically feasible in his view. When politicians refer to his report they naturally leave out this reasoning and talk only about his numbers, which they then describe as economically prudent, ignoring the dismal logic behind them. Garnaut's low expectations of the political process seem to be becoming a self-fulfilling prophecy.

A critical demerit of the option of auctioning emission permits is being demonstrated in the EU.
The proposal of an EU-wide GHG cut of a mere 20% by 2020 is being blocked by eastern states ostensibly because of the impractical inequity of energy usage rights going to the highest bidder.

Quote:

"Under the EU's voting rules, some decisions may be blocked by a certain number of member states representing enough voting power.

The EC's proposal sets full auctioning of the CO2 emission permits as of 2013. The six states want to delay this, arguing their power plants will not have enough cash to compete with giants like the Germany's E.ON on the free-market auctions.

At present, industry gets some permits for free and companies have to buy additional ones only if they exceed their granted quotas."
______________

This dynamic implies that sufficient permits must be auctioned within each state's suppliers to meet its central needs, for the auction route to be both feasible and durable in operation.

Notably, allocation of the permits per capita, harnessing the local interest in trading them to ensure local energy supply,
and to an extent to encourage sustainable energy projects,
would further nullify this obstacle.

Regards,

Billhook