Trade policies are likely to become more aligned with tackling climate change and the lack of a legislated target could become a handicap for Australia’s trade and international relations, limiting our scope to do deals and in the worst-case scenario, exposing us to sanctions or tariffs. These are some signals that Australia cannot ignore:
Europe is likely to impose a carbon border, putting a carbon price on imported goods as an extension of the EU’s carbon price policy as a necessary step to ensure a level playing field between EU industries and foreign competitors.
- The UK is showing interest in joining the ACCTS (Agreement on Climate Change, Trade and Sustainability) which plans to cut barriers to trade in environmental goods and services, phase out fossil fuel subsidies and encourage the promotion and application of voluntary eco-labelling programs and mechanisms, supporting reform of trade rules prioritising the environment.
- President Biden also supports “carbon adjustment fees against countries that are failing to meet their climate and environmental obligations at the US border”.
- As for China, although it disagrees with environmental protectionism, it seems to be getting ready for its trade implications. For example, it has already set up a carbon pricing framework establishing a system of pollution permits for those power generators who over pollute.
We’ve got the power
We don’t expect Australia to be dancing to other nations’ tunes, but we need to syncronise our climate policies with those of our allies, keeping up with the pace and rhythm expected from a developed economy of our calibre.
Setting a target would enhance Australia’s soft power, allowing us to join like-minded nations that have committed to a net-zero and that are crucial to Australia’s trade and regional prosperity like Japan, South Korea, the Pacific Islands, the US and most European countries.
Our government is committed to playing its vital role in decarbonising and supporting the Pacific, improving energy security, supporting climate action to prevent sea level rise, and to help ensure their military protection. Setting a target will invigorate our global standing in the Pacific region.
Rage against the machine
If our conservative governments do not deal with climate challenges, we run the risk of the young generations resorting to more extreme solutions.
While interviewing former EU Commissioner for Climate Action, Connie Hedegaard, on Sunday at our Coalition for Conservation event on climate resilience, she said: “For those in favour of capitalism, we must show that we can handle this crisis, or we might be faced with the young generations calling for more radical reform like a total change of system”.
This is by far one of the most serious predicaments our conservative governments are facing if we don’t show we are concerned and prove we are taking steps towards net-zero goals.
More ‘Men at Work’
The most elementary examination of Australia’s employment data makes one very clear conclusion: fossil fuel-reliant jobs are few and at-risk, while jobs in renewables are growing at a higher rate.
The ABS data reveals that between 2017 to 2018, employment in renewables grew by 27 per cent to 26,850 jobs. The most recent Clean Energy Council report has found that the sector could potentially employ 44,000 Australians by 2025, with the majority of these jobs in regional areas.
The EY Report ‘Australian Renewable Export COVID-19 Recovery Package’ released in 2020 estimated that every $1 million spent on renewable energy and exports creates 4.8 full-time jobs in renewable infrastructure or 4.95 jobs in energy efficiency. By comparison, $1 million on fossil fuel projects has been found to create 1.7 full-time jobs.
A target would assist in speeding the various pipeline projects that can place Australia in the pole position.
A net-zero target would provide the necessary signal to the market to begin those job transitions, avoiding the mass structural unemployment that would arise otherwise.
One thing leads to another
Setting a target would signal that we are serious about walking the talk to reach our Paris Agreement commitments, bringing a desirable level of certainty, conveying a semblance of confidence to corporates and investors and cementing our space as leaders in technologies and renewables internationally, rather than camouflaging our potential behind a lack of policy.
A target would assist in speeding the various pipeline projects that can place Australia in the pole position, bring the returns to superannuation firms free from exposure to stranded assets and position Australia as a clean energy exporter.
How soon is now
For those who feel that setting a target could either be a bake-off without ingredients or a promise we cannot fulfil, I would argue that Australia is one of the most reliable countries to achieve this goal. At federal level, the Coalition government with Minister Angus Taylor has set the pathway to achieve emissions reduction through the Technology Roadmap, and our states have set ambitious targets accompanied by sensible policies supporting clean technologies.
Australia’s renewable energy capacity is growing at a per capita rate 10 times faster than the world average, and nearly three times faster than the next fastest country, Germany. Between 2017 and 2020, more than $30 billion was invested in renewables, one of the highest per capita investments worldwide.
Progress can only come with change and we should set up a target now. If there’s no reasonable cause not to do it, let’s support our Prime Minister, so it’s done while it is still a choice, not an ultimatum.
Cristina Talacko is chair of the Coalition for Conservation and the director of the Export Council of Australia.