In November last year I wrote an article titled The Truth About Carbon Emissions Targets, raising the possibility that countries that fail to adopt strong emissions reduction programmes would face trade penalties from countries that do.
Last week, 11 February 2021, the European Parliament voted to introduce a carbon levy on imports into the European Union (EU) from countries with insipid carbon emissions reduction programs.
The EU announced that they would no longer tolerate freeloaders like Australia—countries that fail to genuinely do their part to reduce emissions. Lip service is no longer an option in the climate change stakes.
The EU launched its emissions trading scheme (ETS) in 2005 and is now the world’s largest GHG trading programme, operating across 31 countries.
Its decision to implement a carbon levy on freeloaders means Australian exporters to Europe will face millions of dollars in new tariffs.
Regulators will impose a tariff equal to the emissions fees local manufacturers pay to produce the same product. And coincidently, the EU and Australia are currently negotiating a multibillion-dollar free trade agreement, so the timing is impeccable.
I mean, in the race to sign free-trade agreements, when a globalised approach is required to tackle climate change, you can’t seriously expect to get away with freeloading on the efforts of other countries forever.
Have we totally abandoned our green credentials?
Pascal Canfin, elected chair on the European Parliament’s Environment Committee, reiterated that compliance with the Paris Agreement on climate change mitigation was “non-negotiable”, declaring that “we will not ratify a trade deal if there is no concrete additional climate action from Australia”.
Naturally, Australia will be given the opportunity to get “serious” about genuine emissions reduction and cease with the disingenuous claims about its programme of direct action.
Despite the substantial efforts of our political leaders to convince the Australian public and our trading partners otherwise, Australia is viewed as a notorious producer and exporter of carbon emissions.
In 2018, the Global Green Economy Index (GGEI) ranked Australia 100out of 130 countries—just below Mozambique and Djibouti—on the KPIs of “leadership and climate change, efficiency sectors, markets and investment, and environment”. An utter demolition of our faded green credentials!
Whoops!
In short: if you want to participate in global trade, which Australia does, and the production, distribution, and consumption cycle is responsible for a growing share of total anthropogenic CO2 emissions, then you have to play by the rules that the majority of your trading partners set.
So it’s ironic that our PM Scott Morison would resort to chest beating and repeatedly declare “that our policies on GHG emissions won’t be set in any part of the world other than here”. Which, in a globalised economy, sounds awfully like naivety, or narrow-minded nationalism, or political hubris, or all of the above.
But let’s take a step back, say, a decade or so
In 2008, the well-respected Professor of Economics, Ross Garnaut, submitted a report commissioned by Australia’s federal, state, and territory governments titled The Garnaut Climate Change Review.
The brief for this report was to conduct an independent study on the impact of climate change on Australia’s economy. Garnaut reported that Australia had fallen well behind other developed countries in reducing greenhouse gas emissions.
He recommended that Australia introduce an emissions trading scheme (ETS) (a system of tradable permits in which the market sets the price and a predetermined cap on the amount of emissions is specified) to at least regain some credibility from a tarnished international reputation. Similar in effect to the EU’s ETS.
Based on this recommendation and a consensus of supporting research, the Australian Labor government introduced a carbon tax in 2012—which was successfully reducing emissions—and planned to introduce an ETS in 2015.
But upon winning office in the 2013 federal election, the Liberal Coalition government—in a continuation of the bitter climate wars dating from the 1960s—introduced legislation to repeal the carbon tax in favour of direct action (also referred to as direct regulation).
After two unsuccessful attempts this legislation was passed by the Senate in July 2014. Both the carbon tax and the proposed ETS were subsequently abolished.
Direct action: an insipid response to a larger-than-life problem
Central to the Liberal Coalition’s direct action policy was a reverse auction (which we currently have) in which polluters bid for government funding by making an upfront contractual promise to reduce X number of tonnes of greenhouse gas emissions.
In effect, the government pays polluters with taxpayer’s funds to reduce their pollution.
Garnaut released a follow-up to his initial review in 2011, titled The Garnaut Review, in which he slammed “direct action” as having “some rationale if we [Australia] wanted to pretend to take action against climate change but not do much”. Which aptly describes what we’re doing today.
He further defined direct action as something that would depend on the ideas of a small group of politicians and their advisors and confidants that was kept alive on taxpayer’s money in the hope that something might eventuate.
We need to get on with the business of genuine carbon emissions reduction
In his 2011 follow-up review, Garnaut strongly reiterated his original position that Australia was too far behind to be a leader in reducing greenhouse gas emissions and was indeed one of the principal culprits thwarting global mitigation efforts.
He further declared that it was only fortunate for humanity that other developed countries were not following Australia’s lead and “behaving like lemmings”.
But the travesty of Australia’s arrogance and condescending attitude toward climate change action couldn’t be more serious: Australia is more vulnerable to climate change than any other country in the developed world—meaning that for us, the adverse effects of climate change will be significantly amplified.
Perhaps the EU’s decision is our political leaders’ moment of truth on climate change. The end of the deceit and indifference, at least on this issue, and the categorical denial of a denialist country that markets itself as a responsible global citizen but what is in fact a global pariah in the context of meaningful climate change action.
If we want to remain a member of the global community and thus continue to benefit from global trade, we need to get on with the business of legitimate and meaningful carbon emissions reduction.
Oh the irony of hindsight for those with little foresight!
Dr Stephen Dark has a PhD in Climate Change Policy and Science, and has lectured at Bond University in the Faculty of Society & Design teaching Sustainable Development and Sustainability Economics. He is a member of the Urban Development Institute of Australia and the author of the book Contemplating Climate Change: Mental Models and Human Reasoning.