A fair dinkum carbon tax debate will show why Tony Abbott is no idiot

I was an interested spectator at a recent Canberra public lecture (March 24) by Lord Deben, a former UK Secretary of State for the Environment (under Thatcher) who also helped draw up Britain's recent Climate Change Act with only three of 646 MPs voting against it.

In agreement with Lord Deben, we should do much more to lower greenhouse gas emissions. After all, as the world's population grows and more industry output results, it makes sense for all societies to encourage greater efficiency and innovation in terms of energy use.

But Lord Deben's optimistic speech proved another intellectual disappointment, and hardly any more meritorious than the anti-carbon tax tally (March 24) which he questioned in terms of the size of the crowd and its motivation.

As I shall argue, there is much evidence to support Abbott's call for a carbon tax debate until the next election as such a policy option may indeed do little to reduce global greenhouse emissions.

Lord Deben's speech, while rightfully noting the UK's can do approach and the right of poorer nations to pursue a better standard of living, mentioned nothing about what is really happening in terms of global greenhouse gas emissions. No surprise here as most people claiming win-win policy solutions are not really interested in data that may complicate their claims, despite the reality of a complex and competitive world.

The truth is that UK efforts to reduce its own greenhouse gas emissions have been tempered by its own contribution to global levels through the promotion of freer trade. Although the UK reduced its greenhouse gas emissions by about 18 per cent since 1990, this achievement does not account for domestic consumption of energy-intensive manufacturing goods produced in developing nations. Hence, while the UK saved 148 million tonnes of carbon dioxide for the period 1992-2004, total emissions related to UK consumption grew by 217 million tonnes for the same period.

The EU (27 countries) may have reduced emissions by more than 17 per cent from 1990 to the end of 2009, yet it is estimated that more than 30 per cent of consumption-based emissions were already being imported in countries including the UK, France, Sweden, Switzerland and Austria by 2004. The inclusion of net imports adds 4 tonnes to "the annual carbon footprint of the average European (currently 11 tonnes a year) and 2.4 tonnes to that of the average American (currently 20 tonnes)".

It also indicated that about one third of China's carbon emissions in 2008 relate to the production of goods for export.

In other words, with the ongoing expansion of the international economy, Western nations have benefited from the import of cheaper manufacturing goods produced in developing nations, yet global greenhouse gas emissions from human activity increased by 70 per cent between 1970 and 2004 (carbon dioxide emissions by about 80 per cent).

Now I will not pretend that the answers are easy. Indeed the struggle to more adequately balance economic and environmental considerations remains an illusive goal, as suggested by Abbott's stance, although I hope that human innovation and common sense meets the challenge.

In fact, in contrast to the beliefs of so-called progressives now jumping on the carbon tax bandwagon, there are very few government employees willing to be truly honest about recent efforts to reduce rising global greenhouse gas emissions. After all, economic growth remains the dominant paradigm and the easiest option for policy-makers.

Take Ross Garnaut, the Gillard government's adviser on climate change. Should we really take him seriously just because he expresses concern that global carbon emissions will double between 2005 and 2030 if nothing is done given that China's rise is even more rapid than forecast in 2008.

After all, it was Garnaut, a longstanding promoter of free trade and the economic opportunities provided by a booming Asia, who hardly saw the writing on the wall about rising greenhouse gas emissions with his past policy ideas and analysis.

While I too support economic liberalism (within reason), which means that we cannot deny the right of countries to enhance their economic prosperity, one would be naïve to suggest that a carbon tax was going to make that much difference in terms of reducing greenhouse gas emissions.

In addition to the above evidence that shows how domestic consumption magnifies the developed world's carbon footprint, Australia seeks to maintain its high standard of living by making the most of coal exports to the world, particularly to Asia.

So why do I have more faith in Tony Abbott than say Ross Garnaut?

First, Ross Garnaut offers a flawed faith in free trade with little regard to the loss of industry from the developed to the developing world. Hence, he still rejects calls from the manufacturing sector for carbon tariffs to help local industry, and argues that government should spend around 10 per cent of revenue raised from a carbon tax to boost spending on low-emission technologies.

Second, while Abbott is hardly opposed to freer trade or further measures to ensure that the Australian economy remains competitive, he does express interest in various concerns about the national interest when relevant evidence emerges.

One has only to note recent concern by Abbott and the Coalition that Australia may need to amend its anti-dumping regime to help ensure that our markets are not distorted by goods subsidised by foreign governments, a stance which reaffirms my belief that he is no fool driven entirely by a blind faith to ideology.

With Abbott astute enough to take account of various concerns, including by Liberal and National members about the extent of foreign ownership of agricultural land, he is likely to listen to evidence that shows that the loss of energy-intensive Australian industry offshore may indeed increase global greenhouse gas emissions.

And there is a lot of evidence to show why the new obsession with a carbon tax may be less important than keeping industry here and adopting other reforms to reduce our own greenhouse gas emissions.

During February 2010, a Chinese report (a two-year study involving 570,000 people) found that agriculture is responsible for 43.7 per cent of China's chemical oxygen demand (the main measure of organic compounds in water), 67 per cent of phosphorus and 57 per cent of nitrogen discharges. While fertilisers and pesticides have played an important role in enhancing China's productivity, a Greenpeace report indicates how its overuse of nitrogen fertilizer was adding to water pollution and greenhouse gas emissions. With China producing 24 per cent of the world's total grain output, it did so using 35 per cent of the world's nitrogen fertilizer.

China, by 2007, was also responsible for 51 per cent of all steelmaking carbon emissions with the International Iron and Steel Institute indicating how that nation emits more greenhouse gases in steelmaking because it uses less scrap and burns more coal. It was also noted that the steel industry is the world's third biggest polluter in terms of greenhouse gases after the chemical and cement industries, and that only 39 per cent of the world's steel output was in countries that signed the Kyoto protocol cutting emissions.

And with the World Bank observing that Chinese industries use 20 to 100 per cent more energy per unit of output than their US, Japanese and other counterparts, China's government in 2010 ordered that more than 2,000 highly polluting, unsafe or energy inefficient plants to shut down within two months. The notice from China's ministry of industry and information technology covered 18 industries including steel, paper, cement and dyeing.

So with China overtaking the US as the world's biggest consumer of energy in 2010, can Westerners really kid themselves that we can rely on such a mercantile nation to make the necessary reforms while developed nations have a smaller impact on global greenhouse gas emissions through their own national cuts?

After all, it is the non-OECD Asia region that is expected to account for nearly 90 per cent of the total world increase in coal use from 2006 to 2030 with China's installed coal-fired generating capacity projected to nearly triple from 2006 to 2030.

Prime Minister Gillard and others may delude themselves that Australia's carbon tax will make an important difference. Just days ago, Gillard bragged how the ACTU stole the march on the anti-tax protesters on March 24 by delivering a petition singed by about 10,000 "working Australians" to the Climate Change Minister Greg Combet supporting action to reduce emissions. Further, the Labor backbencher Nick Champion declared those attending the anti-tax rally as "extremists".

To conclude, while the Department of Climate Change argues that Australia's greenhouse gas levels will rise 24 per cent by 2020 (on 2000 levels) if no carbon price is introduced, the evidence justifies the Coalition's bid to offer an alternative policy strategy that both upholds the national interest and helps reduce greenhouse gas emissions. Such facts should be brought to the attention of the Australian people, and the fate of the carbon tax should be decided at the next election.