How to lower living standards and perpetuate poverty

There is a widely accepted proposition that explains the logic of this. Before environmental standards rise, a certain level of prosperity needs to be established. This reflects common sense. It costs money to protect the environment. This explains why the greatest despoilment of the environment occurs in poor countries.

These countries need first to generate the economic growth to create the wealth required to ameliorate the environmental pollution, which fosters disease and reduces life spans. This is the impact of polluted water and air and the accretion of solid waste. In this case, clearly, economic growth needs to precede management of the environment.

Even after that stage of economic development is reached, developing countries still cannot afford policies that subordinate economic growth to the protection of the environment. They will not be able raise living standards or reduce poverty, professed goals of the Greens' policy itself.

The policies do not state the Greens are anti-free trade, but the effect of them would constrain competition and deny the benefits of free trade. This is also demonstrated by the effect of implementing the Greens' party manufacturing policy.

The policy criticises exports of minimally transformed goods and commodities from Victoria. It contends that buyers in other markets derive more employment, research and development by developing these basic products than Victorians. The implication is that government policy should promote value-adding industries to correct this.

The policy also calls for restructuring of the manufacturing and energy sectors and investment in, and commercialisation of, the technology to enable the transition to the low carbon economy. Implicit here is recognition that the desired technologies either do not yet exist or are not commercially viable.

The policy accordingly recommends development of a new raft of higher value-added products, with the emphasis on sustainable products, utilising these as yet unproven or non- existent technologies.

These policies show the Greens have not heeded the lessons of manufacturing and trade policy over the last three decades in Australia. The model proposed in the Greens' policy has been tried. High tariffs and subsidies were used by governments for several decades to implement measures to induce development of value-added industries and to foster development of enterprises, which were inherently commercially unviable.

These subsidies and tariffs had to be scrapped in the 1980s when it become clear they were supporting uncompetitive industries and sapping national wealth. After that Australia enjoyed a record period of high prosperity.

The manufacturing policy also stipulates that manufacturers should use only ecologically sustainable inputs, avoid toxic dyes, use reprocessed inputs, reduce climate change emissions and use power from renewable resources.

All these measures would increase the cost of manufactured products and reduce the export competitiveness of Australian industry. These policies would undermine comparative advantage in any economy.

When economies produce and trade what they produce best, everybody benefits. China gets cheaper coal from Australia, which Australia produces better than most and Australia in turn buys cheaper garments, which china produces best.