Nation must prepare to deal with Glasgow summit

As the Glasgow climate change summit approaches, there is a growing sense among organisers of the limits to what realistically can be achieved. Sharp differences between the world’s biggest emitter, China, and the US on a range of issues are making co-operation on climate change action more difficult. Without China, which produces 27 per cent of the world’s emissions, achieving the desired reductions will be impossible. The danger is a longstanding divide between the developed and developing world on the issue will become more entrenched. Unfortunately for Scott Morrison, this does not mean that Australia can expect to sit on the sidelines and be left alone. The areas where agreement is likely in Glasgow, a net-zero target for 2050 and phasing out of coalmining in developed countries, are both difficult issues in domestic politics that will not be going away. As we have noted previously, the Prime Minister has been largely successful in resetting the climate change debate and steering it towards the centre. In response, the ALP has rediscovered blue-collar workers in coalmining communities that were alienated at the 2019 federal election. Labor has adopted a target of net zero by 2050 but the Morrison government has reserved its position. Under its technology-first approach, the federal government wants Australia to be carbon neutral preferably before 2050. Australia’s existing target under the Paris Agreement is for this to happen sometime in the second half of the century. As we noted in December last year, the issue of a net-zero 2050 target “will continue to dog the Morrison government in the way not ratifying the Kyoto Protocol was an ongoing distraction for the Howard administration”. Not declaring a 2050 target leaves an easy mark for the opposition, just as John Howard’s refusal to ratify Kyoto did for Kevin Rudd. The government must weigh the political costs of not declaring a net-zero target against its principled stand that promises made must be kept.

Repeated studies have shown that, unlike Australia, most countries have fallen short of meeting their promises on climate action. Collectively, the world is a long way from meeting targets set in the Paris Agreement. Put simply, despite all the claims of the financial opportunity that climate change action presents, the pathway and cost of getting to net zero are far from clear. Nor does declaring a net-zero target for 2050 deal with demands that more be done by 2030. What is clear is that the transition costs of meeting global demands for decarbonisation will be high for Australia relative to less carbon-intensive economies. This is particularly so given a likely outcome from the Glasgow meeting is support for a UN call to ban coal in developed countries within a decade. This ambition was highlighted by UN Assistant Secretary-General Selwin Hart at an ANU conference on Monday. The UN has set a timetable for coal to be phased out by 2030 for OECD countries and 2040 for all others. Under what it calls a “just transition”, workers displaced by closing coal operations must be found jobs elsewhere in the economy.

Mr Hart said, if adopted, the UN timetable would “leave nearly a decade for Australia to ensure a just transition for its coal workers and others affected”. Mr Hart chose the past tense to describe the role that coal and other fossil fuels had played in Australia’s economy and said mining accounted for a small fraction – around 2 per cent – of overall jobs. What he did not say was that coalmining was worth about $33.8bn to the national economy in 2019-20 and directly employed nearly 40,000 Australians. About 80 per cent of coal mined in Australia is exported. Closing the coal industry in Australia but allowing it to continue in other countries such as China, South Africa, Indonesia, Russia and Vietnam will most likely result in the development of lesser-quality coal deposits elsewhere. If successful, the push against coal can be expected to be applied to Australia’s other major energy export, gas.

It is now clear that demands for climate action are being actively policed by major financial funds and institutions. And it is likely that trade sanctions soon may be applied to nations that do not take action considered sufficient by the EU and possibly the US. Australia must think clearly about how it intends to respond. The nation’s best interests will always be served by insisting on a rules-based system in which every nation is treated equally. We also must be realistic. This includes continuing to invest in research and development of new technologies that can help to reduce greenhouse gas emissions and produce the minerals and fuels that will power the world of the future.