Australia is ‘more and more isolated’ on climate, former EU trade commissioner says
The former European Union trade commissioner, Cecilia Malmström, has warned Australia is becoming “more and more isolated” on climate action at a time when floods, fires, droughts, and the latest assessment by the Intergovernmental Panel on Climate Change (IPCC) shows global heating “is created by humanity”.
Malmström told a webinar hosted by the progressive thinktank the Australia Institute on Wednesday climate change was “the most urgent global crisis we are finding ourselves in – and we don’t have much time”.
“I think the recent developments of the last month – floods, fires, droughts, huge catastrophes and the IPPC report clearly underlining this is created by humanity – shows we all need to do more,” she said.
“The biggest economies and the biggest polluters need to do more,” she said. “China needs to do much, much more.”
“China has committed to a vague goal, but nobody really knows how it is going to happen. The US is getting there. Australia is a big economy, a big emitter, you need to do more – we all need to do more.”
Malmström said doing more meant taking transformational action, not “finding one percent here or one percent there”.
She said Australia would face sustained international pressure for continuing to subsidise fossil fuels when the world was working towards a goal of net zero emissions by 2050. “There is no turning back. It is not like another election in Paris or Germany and we will change track – no, it’s not going to go back.”
She said the best way for governments to make the necessary transition was to align with businesses looking for profitable opportunities in the green economy. “It is not for me to tell the Australian government how to do this, but [Australia] is becoming more and more isolated and we need to work together to get this done.”
Malmström, a centre-right politician who served in Brussels for close to a decade, including as Europe’s lead trade negotiator, was Sweden’s candidate to lead the Organisation for Economic Cooperation and Development.
But Australia’s former finance minister Mathias Cormann secured the role after a significant diplomatic campaign from the Morrison government. In his pitch to lead the Paris-based organisation, Cormann talked up the importance of pursuing “a green recovery with an increased reliance on renewables”.
During her contribution on Wednesday, the former European trade commissioner shot down arguments from Australian ministers that the EU’s proposed carbon border adjustment amounted to protectionism.
She said there had been “an army of lawyers” in Brussels working on the proposal to ensure it was World Trade Organisation compliant. The mechanism had been designed in a way “that should not be discriminatory”.
“I’ve heard the screams of protectionism, but the idea to tax carbon in this way is less and less contested,” Malmström said.
She said she was hopeful other countries would adopt similar mechanisms. As the EU proposal and a similar concept under consideration in the US, “I think there are discussions in Canada and Japan, and in China they are modifying their emissions trading system.”
The proposed carbon border adjustment mechanism will require EU-based businesses that import goods to pay a price, linked to what they would have paid if the items had been produced under the EU’s own emissions trading scheme.
The goal is to prevent “carbon leakage” – or the movement of emissions-intensive industry – to countries with less ambitious climate policies. The policy also aims to encourage producers globally to reduce their emissions and for countries to adopt greener policies.
Australia’s trade minister, Dan Tehan, has characterised the mechanism as “just a new form of protectionism that will undermine global free trade and impact Australian exporters and jobs”.
Malmström said the optimal policy response to the threat of global heating would be a global carbon tax rather than jurisdictional border adjustment mechanisms. “That would be best and most efficient, but we are not there yet and I can imagine quite a lot of difficulties reaching that.”
Asked whether she was optimistic that global ambition was building ahead of the Cop26 in Glasgow in November, she said “in general I’m extremely worried”.
“If we look out and see where we are, we are not reaching the targets that globally we have promised, and the events of the last month I hope has been an important wake-up call for people,” she said.
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“It’s important not to be too gloomy. We need to make tough decisions, we need to make difficult decisions … but you should also highlight the possibilities.”
Malmström said business was looking for opportunity rather than framing climate action as a cost. She said the coming transition would generate many jobs. “I believe we can still do this but we need international cooperation, and we need leadership and we need to have the courage to take tough decisions for the future of this planet and for our children.”
She said she maintained hope that the Cop26 would move things forward “a little bit” and “we can reach international consensus on the next steps – that’s what I’m hoping for”.