AIIA: Australia on the Road to COP26 – A Pathway of Inaction

Australian Institute for International Affairs
ACT Branch 2021 Annual Dinner
Canberra, 12 May 2021

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It is a great pleasure to be back at the Australian Institute of International Affairs.

I was asked to speak tonight about the changing global political, security and economic order and the role of middle order powers such as Australia.

If there is one challenge that sits at the centre of all this it is the global fight against climate change.

In March 2007, as Leader of the Opposition, I first called climate change the greatest moral challenge of our generation.

I meant it then, and I mean it now. I can think of no greater ethical challenge.

But I also said back in the same address in 2007 that climate change is not just an environmental challenge; climate change is an economic challenge, a social challenge, as well as a deep challenge on the overall question of national security.

All of this remains the case today.

Australians innately understand the need to act on climate change.

As Dorothea Mackellar’s poem reminds us, we are a sunburnt country.

And one of droughts and flooding rains. But also now one of such climatic extremes that the poet would now see our country as increasingly different to that commemorated in our national poem.

That is why last year’s bushfires left such a searing imprint on our national consciousness and a deep desire to see our country do more.

With the arrival of the corona crisis, it was perhaps easy for the government to forget that:

• 46 million acres were burnt in the great summer inferno of 2019-20;
• Almost 6,000 buildings were destroyed, including about 3,000 homes;
• At least 34 people were killed;
• A billion animals were wiped out; and
• The damage bill was over $100 billion.

The only reason the government has been able to get away with doing nothing on climate change for seven years — as evidenced again by last night’s Budget — is because of the toxic mix of far-right politics, the Murdoch media and vested interests of the hydrocarbon lobby over more than a decade have halted any effective action on climate change.

So exactly six months to the day from when the COP26 Climate Change Conference in Glasgow is due to wrap up this November, it is right to take stock on the following:

• Just how isolated Australia has become in the global fight against climate change as a result of this toxic domestic mix;
• Just how damaging this is for us geopolitically, economically, socially and reputationally;
• What exactly the diplomatic and political expectations from the rest of the world will be for Australia for COP26; and
• How we might actually be able to do more.

 

The road to Glasgow

To the casual observer, UN Conferences of the Parties on the Framework Convention on Climate Change come and go at the end of each year and headlines of continued Australian intransigence, obstruction and obfuscation under the conservatives are quickly replaced by stories of Christmas cheer.

But it is important at the outset to understand why the Glasgow summit this year is different.

And why it is the most important COP since Paris back in 2015, or Copenhagen before that back in 2009.

As John Kerry has said, COP26 is the world’s “last best chance the world has to avoid the climate crisis”.

That is because the science tells us that if we do not effectively halve global emissions by the end of this decade, it will be impossible to keep average global temperature increases within 1.5 degrees of pre-industrialised levels — the level that the global scientific consensus considers safe for human civilisation.

And it is because of the framework established by the 2015 Paris Agreement, the world — including Australia — agreed that COP26 in 2020 would be the moment countries came back to the table to reassess their own levels of ambition for greenhouse gas reductions this decade, over our agreed Paris goals.

If we miss this chance, there is unlikely to be as significant an opportunity for diplomatic mobilisation for another five years – the next agreed quintennial review.

By then, however, it may be too late — especially for many of our nearest neighbours in the Pacific who stand on the precipice of the worsening climate crisis barrelling towards us – because we cannot aspire to mid-century carbon neutrality unless we all act decisively to cut emissions further this decade, otherwise the adjustment trajectory just becomes too steep.

 

From climate leader to climate laggard

Six months out from Glasgow, Australia is hopelessly isolated when it comes to the global fight against climate change.

But it need not have been this way.

The fact that my government’s first act in office was to ratify the Kyoto Protocol at COP13 in Bali in late 2007 shows that in the space of just 14 years we have gone from a climate leader to a climate laggard on the world stage.

The conservatives may like to proclaim they will “meet and beat” our Paris target for 2030, just as we did our Kyoto target for 2020, but the reality is that both were not exactly hard to achieve.

Our Kyoto target — to reduce emissions by 5% on 2000 levels by 2020 — was amongst the lowest in the developed world by the time the Kyoto commitment period eventually expired.

That is why my government in 2009 proposed to increase our national target five-fold in the event of a global agreement such as the one we saw in Paris.

Unfortunately, this government’s Paris target — to reduce emissions by 26 to 28% on 2005 levels by 2030 — is woefully inadequate when measured against practically all other advanced economies.

The fact that this now represents effectively half of the carbon reduction target set by the Americans, and effectively a third of that of the United Kingdom says it all.

No amount of Morrison spin changes this.

Nor does it hide the reality that in large part the only reason the conservatives have been able to make any reductions at all is because of the actions our government took a decade ago.

Beyond ratifying Kyoto, there were three big policy measures our government took that bear reflection.

The first was our government’s increasing of the Mandatory Renewable Energy Target to 20 percent of total electricity supply by 2020.

When we did so, renewables in Australia represented just 4 percent of total supply. Today, it is around 28 per cent. That’s real progress in response to progressive legislation.

Not only have we reached the goal we set, but for the first time the renewables industry in our country actually has scale. That is why we did it – to create an industry with critical mass which could then compete with hydrocarbons once a carbon price kicked in.

To illustrate the impact of this policy in practical terms, in 2014 alone — the year after we left office — about 2.2. million small-scale renewable systems were installed as a result of the RET, and emissions reductions from this scheme alone represents about a third of our total abatement effort today.

The second big policy measure was our government’s introduction of the Energy Efficient Homes Package.

1.2 million homes – or 20 percent of our national housing stock — benefitted from the installation of insulation and a further 73,000 homes received a rebate for solar hot water systems.

Yes, there were problems with its implementation including four tragic deaths for which shoddy contractors were properly held accountable under OH&S laws.

With 40 percent of Australian household energy going towards heating and cooling, it is estimated this scheme alone produced savings of approximately 20,000 gigawatt hours of electricity, or roughly 19.5 million tonnes of carbon dioxide through to today.

The third big policy measure was our government’s introduction of a price on carbon.

Not only did this cause an almost immediate 8 percent drop in electricity emissions, but 2013 saw the largest drop in our overall emissions in almost 24 years of monitoring.

These were big reforms. Until the Australian carbon lobby made up of Murdoch, Morrison and the MCA killed it in 2014 with the single most retrograde act on climate change in this country.

And that is why, when taken together, these measures have made up the bulk of the emissions reductions Australia has been able to make over the last decade plus.

But the fact that our political leadership have not sustained this level of ambition has therefore meant that the lack of accompanying policy measures have now left us well behind the rest of the world.

 

The impact of Australia’s inaction

Some in Australia would lament that at just 1.3 percent of global emissions, no amount of Australian action will make a sizeable dent in global efforts.

This is as nationally misleading as it is nationally and internationally reckless.

Misleading because Australia is not only the 14th largest polluter in the world, but we emit more than 40 other countries with larger populations than we have.

We also have the highest per capita emissions of any advanced economy and three times the G20 average.

Not to mention we are the third largest exporter of fossil fuels in the world which, under the carbon accounting rules, are not counted under our carbon budget but under the carbon budgets of importing countries.

It is reckless because it ignores the economic imperative for action in Australia, including to ensure our industries and workers are not left stranded as the rest of the world transitions to a low-emissions, climate-resilient global economy.

The fact is that countries representing more than 73 percent of global emissions now plan to reach net zero emissions by 2050, with China making up most of the remaining gap with their plan to reach carbon neutrality by 2060.

Yes, China needs to do a lot more in the immediate term — especially in terms of their domestic use of coal and the promotion of it abroad, as I argued recently in the pages of the “South China Morning Post” — but we should not underestimate China’s political resolve for net zero for its own domestic economic and environmental reasons, and the Communist Party’s propensity for steady, long-term policy planning.

Taken together, this means that more than two-thirds of Australia’s two-way trade is now with countries that are actively working towards decarbonising their economies.

For an exporting country like Australia, heavily dependent on the mining and trading of fossil fuels, this has profound implications for our economic future, but we have instead buried our heads in the sand.

This includes finding ourselves on the wrong side of Carbon Border Adjustment policies being actively implemented by the European Union and mooted elsewhere, such as by the Biden administration in the United States.

It just doesn’t make economic sense for Australia to continue to bury its head in the sand..

For every $10 million invested in renewable energy in Australia, it would create 75 jobs, according to modelling by the think tank Beyond Zero Emissions.

But for every $10 million invested in fossil fuels, it would only create 27 jobs.

In other words, renewable energy investment creates three times more jobs.

Deloitte Access Economics says reaching net zero by 2050 could add $680 billion and grow the economy by an additional 2.6 percent by the time we get to 2070, adding more than 250,000 jobs in the process.

The longer we deny this new climate reality, the harder and costlier the transition will be.

Thankfully, beyond trade and economic policy, we also know from history that Australian climate leadership and Australian climate diplomacy can make an impact on the approach of other countries too.

Under the Hawke and Keating governments, Australia secured an international ban on mining in Antartica.

We also became one of the first countries to propose a quantifiable emissions reduction target before this became the norm through the UN Framework Convention.

And while the Howard Government may have done everything they could to stall, exploit and then ultimately reject the Kyoto Protocol, ironically their demands that agriculture be included in the regime they never signed up to has been essential for ensuring the land sector — which represents 20 percent of global emissions — is not excluded from global efforts today.

Even though Copenhagen is often remembered for what it didn’t deliver, the fact remains that Australia as “a friend of the chair” was essential for what was able to be agreed later at the Paris Conference.

The concept born there – of countries’ climate targets being set individually from the bottom up, rather than from the top down based on our relative contribution or economic capacity – was an Australian idea.

So, too, in part was the concept of a global 2-degree temperature limit being the ultimate guardrail for our global efforts, which Australia tabled with the Maldives.

The fact that six years later, in Paris, Greg Hunt played a role in then ensuring the calls of island nations to bring this guardrail down to 1.5 degrees were not ignored also deserves credit – while noting that the Copenhagen formula was that temperature increases had to be kept under 2-degrees centigrade under a formula once again disregarded by Australia.

And while Australia was then shut out of progressive diplomatic groupings, including the High Ambition Coalition, there were other coalitions we originally helped form, such as the Cartagena Dialogue for Progressive Action, only to be forced, embarrassingly, to step away during the comprehensively embarrassing Abbott era.

The other good news is that if given the chance, Australia’s diplomats are primed to once again make a difference in the global fight against climate change.

Although the diabolical decision to further cut Australian aid in yesterday’s budget trashes our credentials in the international community and among the developing world, particularly where the failure of developed countries to give effect to a global $100 billion climate fund for the poorest countries agreed to in Paris in 2015.

 

The case for courage

All this brings us to the question of what the world is actually looking for from Australia by the time we get to COP26.

The answer to that is three-fold.

First, to finally embrace a clear and unequivocal goal to reach net zero emissions by 2050.

Not “preferably by 2050” as the government likes to say as it executes the world’s most inelegant crabwalk, but “by 2050” as the science demands.

All Australian state and territory governments have made this commitment and they are central to the nation’s energy sector.

So too have our peak industry, business and union groups, plus the National Farmers Federation, our national airline, our largest mining company, and our national telecommunications company.

All this means there is a rare social compact in Australia for the government to embrace such a goal. This didn’t exist in 2010. It does now.

Even the Murdoch media may be showing signs of creating the political space for the government to now embrace net zero, leaving only the hard right of the Liberal National Party isolated on this question.

What this means is that we should expect the government to crab walk away from their intransigence on this question by the time they get to COP26 in November.

Just as they eventually crab walked away from their insistence on using dodgy accounting tricks to meet their targets last year – the so-called Kyoto carryover credits rort.

I believe this announcement could come as soon as next month when the Prime Minister attends the G7 as a special guest and where Australia will be the only developed country in the room that as of now refuses to embrace net zero.

Morrison will expect to be applauded for this. He shouldn’t be, and he won’t be – other than in the pages of “The Australian”.

Whether the government sides with farmers to include agriculture – or appeases the economic illiterates of the National Party by carving agriculture out – remains to be seen.

The direction of the global economy is now clear. The Australian government won’t be able to continue swimming upstream. The economic costs will become too high.

The second thing the world is looking for Australia to do by COP26 — and by far the most important — is for us to increase our existing 2030 emissions target.

As I mentioned earlier, the Paris Agreement was designed with a “five-year ratchet” mechanism in mind.

In other words, governments agreed to come back to the table collectively every five years to see what more they could do as the science became more alarming, the politics more compelling, and with the cost of renewables plummeting.

The fact the Australian government believes it can get a leave pass for doing nothing violates both the spirit and the letter of the Paris Agreement.

It means that the slogan I used for our recent UN Security Council membership campaign — “We do what we say” — no longer applies.

A more appropriate slogan for the current Australian government is: we bullshit all the way.

And the fact that Australia chose to formally notify the UN of its intention to do nothing with its 2030 target on New Year’s Eve as the gaze of the nation and the world was elsewhere, shows the government knew it was skirting its responsibilities and clearly sheepish about doing so.

To be fair, Australia is not the only country that has not yet committed to increase its 2030 target.

But we are isolated amongst the developed world in lacking both a long-term plan to decarbonise our economy and in delivering additional short-term carbon reduction ambition on the way through.

Other middle powers like Japan and Canada which six months ago also looked set to avoid revising their own 2030 targets have now done an about face, including as a result of pressure from the Biden administration as evidenced at their recent summit.

And while we can expect the Biden administration to continue to prioritise working with Australia publicly over China, this does not mean that their private representations will be any less measured. Biden’s treatment of Morrison at the recent climate summit is a case in point.

In order for Australia to do “our fair share”, and to measure up against the Biden administration and the rest of the developed world, we’d need to also realistically table a target in the order of a 50 percent cut to greenhouse gas emissions by 2030 – or at least a 45 percent cut as the independent Climate Change Authority setup by my government recommended back in 2015.

The good news is that Australia actually has capacity to do more.

In large part thanks to the measures I referred to earlier, the Australian Energy Market Operator has made clear that with the right investments and policy framework, Australia could rapidly increase the share of renewable energy in our eastern seaboard grid to around 75 percent by 2025.That is nationally game-changing.

With coal currently making up around 60 percent of that same electricity market, this is indeed a very big deal.

To be fair, it is in part also due to efforts by the Turnbull Government through the ‘Snowy Hydro 2.0’ scheme which has provided storage and therefore stability in the form of pumped hydro.

To do as the Australian Energy Market Operator recommends, however, would nevertheless also require the kind of investments in the electricity grid that the Australian Labor Party has proposed, as well as a system of community batteries – also proposed by Labor – to help us collectively harness what has now become the largest penetration of rooftop solar in the world.

But as ClimateWorks Australia has modelled, if our country is to reach net zero emissions economy-wide by 2050, this will mean decarbonising our energy system by 2035 — just as Joe Biden plans to do in the United States.

And as modelling done by Beyond Zero Emissions has shown, a large-scale renewables plan for Australia would create, in the next two years alone, more than 100,000 jobs that wouldn’t otherwise exist – more than 70 per cent of which would be in regional Australia.

Plus, within three years, such a plan would increase real wages by 1 per cent nationally at a time when real wages are currently lower than they were a decade ago.

That’s why in my latest book, The Case for Courage, I’ve also argued we need to go a step further and embed solar panels into the National Building Code, and prioritise the retrofitting of community and social housing, this would alsoimmediately bring down electricity prices for those that need our help most.

Instead, the Australian government is hell bent on unleashing a so-called “gas-fired recovery” from COVID-19 which risks actually increasing emissions over time, by seeing it as a replacement for coal – not simply a transition fuel where it has an important part to play.

Even groundbreaking projects such as the Asian Renewable Energy Hub which plans to use wind and solar to produce green hydrogen in the Pilbara and to export it to the region have struggled to secure robust federal government support.

A third area where the international community will be looking for Australian action is to do with the Green Climate Fund.

With Joe Biden’s election, Australia is now effectively isolated amongst western donor nations in refusing to provide climate finance through the GCF — an institution once led by an Australia diplomat and chaired by another, in part an attempt by Julie Bishop to forestall an Abbott withdrawal.

Australia’s refusal to be part of the GCF has caused chaos in the Pacific, forcing governments with limited capacity to spend their time applying to bilateral funds rather than through a central agency as it was envisaged when the idea was first born in the negotiating room in Copenhagen, where China was already competing with us for influence.

While nothing will make up for the conservatives’ gutting of the aid budget to the lowest level in real terms in our history, no amount of climate finance announcements will also make up for the government’s refusal to simply rejoin the Green Climate Fund and put our shoulder to the wheel with other governments.

Action on this won’t make up for the lack of an embrace of net zero, or of an enhanced 2030 target, but it is nevertheless a wrong that the government should put right.

 

Conclusion

Climate change remains the greatest moral challenge of our generation.

But as I have made clear tonight, it also remains the greatest environmental, economic, political and security challenge of our generation.

Australia’s inaction on climate change is not only threatening our environment, it is economically reckless, and turning us step by step into some sort of pariah state.

COP26 therefore serves as a litmus test for the government on all of these fronts.

This government’s position on climate change is but one of many problematic positions it has adopted internationally which damage the good name of Australia – which many of you in this room have spent a lifetime building.

We’ve all contributed to Australia’s international political and diplomatic capital – as a creative middle power, loyal to our allies, comprehensively engaged in Asia, and playing our part in building and sustaining the fabric of the international rules-based order.

But with first Abbott and now Morrison, and the cumulative investment over generations, we now have chest-thumping, increasingly xenophobic, domestically driven political opportunists who make Conan the Barbarian look like a respectable global citizen.

Not only does our international standing suffer.

So too does the Australian economy- and the jobs, and the living standards of working Australians.

Australia deserves better.

Ends