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Are we helping others increase global emissions?

By Geoff Carmody - posted Tuesday, 30 August 2022

Is Australia helping increase global greenhouse gas emissions? Yes. Not by continuing our coal and gas exports. By stopping them.

Current European responses show if supply of energy from one source is blocked, buyers turn to others. EU policy was for more renewables. They'd shut down EU coal and nuclear base-load power plants, punting on Russian piped gas as a transition fuel.

Ukraine interrupted this strategy. Without enough renewables, European fossil fuel and nuclear plant closures are in reverse. These, and other gas sources (Canada?), are now sought for winter. Their prices have risen a lot as Russia turns off its gas pipeline.


If Australian policies make our fossil fuel exports internationally uncompetitive, or effectively bans them, importers will go elsewhere, too. If they buy from countries with less 'clean' fossil fuel supplies, net global emissions will probably increase. Australian policy own-goal?

Human emissions have many causes. Some Australia controls. Others we don't.

We don't control overseas energy supply blockages (eg, Russia/Ukraine). These cut world supplies and increase world prices.

Australian responses to them can increase global emissions. An Australia-wide gas reservation policy would mean less Australian gas on world markets. World gas prices rise. Global emissions might increase, depending on substitute energy sources.

Blocking development of Australian gas and other fossil fuel reserves is an own-goal too. 'Bad-mouthing' fossil fuels and power plants, whether new developments or maintenance of existing ones, kills investment in both. Financing refusals by banks and others likewise.

Compensation to Australians for energy price increases is zero-sum local income redistribution. If done, better via income transfers than price caps freezing market responses. We pay for all compensation by tax increases or on the Australian credit card.


Global emissions policy effectively induces many countries to increase theirs. Australia supports this policy.

Over 30 years ago we learned a uniform global policy of reducing national emissions production could not be agreed. COP negotiations had to rely on individual country promises. Still do. We've learned talk is cheap, too.

This model hasn't worked. It won't in future. A better way?

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About the Author

Geoff Carmody is Director, Geoff Carmody & Associates, a former co-founder of Access Economics, and before that was a senior officer in the Commonwealth Treasury. He favours a national consumption-based climate policy, preferably using a carbon tax to put a price on carbon. He has prepared papers entitled Effective climate change policy: the seven Cs. Paper #1: Some design principles for evaluating greenhouse gas abatement policies. Paper #2: Implementing design principles for effective climate change policy. Paper #3: ETS or carbon tax?

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