On 30 April 2007 the state and territory governments of Australia, at the request of Kevin Rudd, then leader of the Australian Labor Party and Leader of the Opposition, appointed Garnaut to examine the impacts of climate change on the Australian economy and recommend medium to long-term policies and policy frameworks to improve the prospects for sustainable prosperity.

Notable positions include Principal Economic Adviser to Prime Minister Bob Hawke (1983–1985); Australian Ambassador to China (1985–1988); First Assistant Secretary (Head of the Division of General Financial and Economic Policy), Papua New Guinea Department of Finance in the years straddling independence in 1975; and Member of the Advisory Council to the Australian Minister for Foreign Affairs (1997–2002).

The final report was released on 30 September 2008[18] and recommended that Australia should indicate at an early date its preparedness to play its full, proportionate part in an effective global agreement that 'adds up' to either a 450 or a 550 emissions concentrations scenario, or to a corresponding point between.

The report was criticised by the Australian Chamber of Commerce & Industry for the economic impact that reducing greenhouse gas emissions would have.

Australian Greens leader Bob Brown showed that the report demonstrated that reducing greenhouse gas emissions would not come at the expense of Australia's economic growth.

[27] Eight papers were released in February and March 2011[28] and the final report of the Garnaut Climate Change Review Update 2011 was presented to the Government on 31 May 2011.

[29] The committee will explore options for the implementation of a carbon price and will help to build consensus on how Australia will tackle the challenge of climate change.

"[30] His position on the matter was countered by Ziggy Switkowski, leader of the 2006 UMPNER Review, and an advocate for nuclear power in Australia.

As such, he supports nuclear power as part of global efforts to reduce greenhouse gas emissions especially given rising energy consumption in Asia.