Harper and Abbott: Two fossils fooling no one

Tony Abbott and Canadian Prime Minister Stephen Harper have stood together declaring their joint dislike of putting a price on carbon pollution, while at the same time suggesting that they genuinely want to do something to address global warming.

Abbott added to his vocabulary of hyperbole, by saying he wanted to act to reduce emissions but was not prepared to “clobber the economy” and therefore was opposed to a carbon tax or emissions trading scheme.

Prime Minister Harper got in on the act by giving Abbott a pat on the back for repealing what Harper described as a “job-killing” carbon tax.

According to Harper: “It’s not that we don’t seek to deal with climate change. We seek to deal with it in a way to protect and enhance our ability to create jobs and growth – not destroy jobs and growth in our countries."

In reality both Abbott and Harper are united not so much in their concern for preventing dangerous global warming, nor strong economic evidence that carbon pricing would seriously undermine global economic development. What unites them is a concern to protect one of their biggest export industries – fossil fuels.

Below is a chart of Canada’s top 10 export sectors on the left and Australia’s on the right. For Canada, largely thanks to their tar sand oil deposits in Alberta, fossil fuels represent more than a quarter of its export income. In Australia, fossil fuels – mainly coal, but with rapidly growing liquefied natural gas – represent nearly a fifth of export value. In addition Australia’s No.1 export of iron ore also require extensive use of coking coal to convert it into the desired final product of steel.

Sources: Canadian statistics drawn from Asia Pacific Foundation of Canada, Australian statistics from Department of Foreign Affairs and Trade.

Both politicians are playing a bit of a game with their respective electorates, who for the most part are worried about global warming. They feign concern for reducing carbon emissions but then engage in fanciful arguments about the perils of using a price signal to discourage those emissions. It’s like all the virtues Abbott and Harper extol about free markets seem to somehow not apply to fossil fuel use when it relates to global warming. 

Tony Abbott typified this fanciful interpretation of policy in stating: ''I am encouraged that President Obama is taking what I would regard as direct action measure to reduce emissions, this is very similar to the action my government proposes in Australia.''

In fact what Obama has done has been specifically avoided so far in the Government’s Emission Reduction Fund White Paper. Obama’s regulations will set mandated emission intensity targets for power generation by state. Whereas the ERF White Paper has deliberately omitted setting any mandated baseline whatsoever in the power sector, while setting emissions baselines for polluting facilities in other sectors of the economy.

Essentially, Obama has done the complete opposite to what the Abbott Government is doing.

We also see this ‘black is white’ flights of fancy in Abbott’s other statement in Canada that: ''There is no sign – no sign – that trading schemes are increasingly being adopted,'' he said. ''If anything, trading schemes are being discarded, not adopted.''

As the picture below prepared by the World Bank illustrates, there are several regions – and indeed the country of China – actively considering the implementation of an emissions trading scheme or some other carbon pricing instrument. Also, the reality is that many state governments in the US will chose to comply with the new EPA Clean Power Plan targets through implementing emissions trading. That’s because this is the most free-market friendly way to reduce carbon emissions.

Source: World Bank – State and Trends of Carbon Pricing 2014

The one country clearly going backwards on carbon pricing is Australia.

Neither Abbott nor Harper have the guts to face up to their electorates and be honest that they think maximising their countries’ fossil fuel export income is more important than addressing global warming.