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As a successful trading nation, Australia is a strong supporter of open markets free of the barriers that impede our exporters and drive up prices for our consumers.
The European Union’s push to impose a carbon tax on imports through a Carbon Border Adjustment Mechanism runs directly counter to this. Implemented, it will see Europe forcing its internal standards and domestic carbon tax on the rest of the world.
At a time when liberal democracies are working together to rebuild confidence on the benefits of free and open trade, a new wave of protectionism threatens to sweep across the world.
This unilateral step, taken outside the rules-based international system, discriminates against countries like Australia that provide the raw materials global supply chains need to create the goods and infrastructure sought by consumers in Europe and elsewhere.
It will punish developing countries relying on energy-intensive industries to generate the economic growth and jobs that will lift their citizens out of poverty. It will punish sectors like aluminium, cement and steel that will be covered in the first phase of this new European protectionism. Over time, other Australian export sectors like agriculture will be in the firing line.
The federal government is concerned global free trade is at risk by the European Union’s new carbon tax.
Like Labor’s failed carbon tax, this blunt, regressive policy will disproportionately and unfairly hurt the most vulnerable in society who are unable to absorb the higher cost of everyday items that will result. Labor has been silent on this carbon tax. This tax will be imposed on countries and industries regardless of the progress they are making to fight climate change.
When it comes to reducing emissions, Australia has a record of achievement we can all be proud of. Between 2005 and 2019, we reduced emissions faster than many similar economies – including Canada, New Zealand, Japan and the US, and far exceeding the OECD and G20 average. Australia leads the world in household solar per person and has the most wind and solar per person of any country outside Europe. Growth in renewable energy has been so rapid that by 2030 it will supply more than half of our electricity.
A plan that recognises practical and affordable solutions, not taxes, is the pathway to achieving net zero as soon as possible and preferably by 2050. To achieve this, the Morrison government’s Technology Investment Roadmap will leverage at least $80bn of public and mostly private investment over the next decade.
Removing the “green premium” – the price difference between existing technologies and low- or zero-carbon solutions – is the key to global adoption. Getting these technologies to cost parity will mean countries don’t have to choose between growth and decarbonisation.
Australia is partnering with countries like the UK, Japan, Germany and Singapore to accelerate technologies like clean hydrogen, batteries, carbon capture and recycling, low- or zero-carbon steel and aluminium and soil carbon measurement. These will be essential to slashing emissions around the world. Together, they will help reduce or even eliminate emissions from sectors responsible for 90 per cent of global emissions.
We’ve recently expanded the Australian Renewable Energy Agency’s investment mandate to allow it to support more of these crucial technologies. In June, Labor sided with the Greens to block these changes and $192m of new investment in manufacturing and transport, including hydrogen and electric vehicle-charging infrastructure. All up, these will create 1400 jobs and reduce our emissions by 16.5 million tonnes.
Labor MP Joel Fitzgibbon correctly called his party’s approach for what it was – ideological craziness. Labor now has a chance to prove us all wrong and demonstrate it is against taxes and in favour of technology-driven approaches to emissions reduction.
Angus Taylor is federal Energy and Emissions Reduction Minister.