You Don't Need To Like Clive Palmer To Dislike His Arbitrary Treatment

The Western Australian government's draconian legislation passed this month to extinguish the legal rights of Clive Palmer and his flagship company, Minerology, is the kind of thing that would not be out of place in a third world autocracy.

A foundational principle of a free and just society is that the law that governs all Australians is not arbitrary, applies prospectively, that court proceedings are fair and government decisions be subject to review or appeal.

These are the principles known as the rule of law and it is these principles that the WA government has thrown aside with its petty legislation rushed through parliament last week.

The background to this extraordinary legislation is that Minerology and the WA government voluntarily entered into a State Agreement in 2002 for the exploration and development of the Balmoral South Iron Ore Project.

When the Barnett government in 2012 rejected a project proposal from Minerology it violated the state agreement that imposed an obligation on the state to at least assess proposals before making a decision.  The dispute came before former High Court judge Michael McHugh QC for independent arbitration who delivered two arbitration awards in 2014 and 2019, finding that the state government was liable for breaches under the State Agreement.

Rather than challenge or appeal the arbitration decisions, WA Attorney-General John Quiggin instead introduced into the parliament a bill seeking to retrospectively nullify the arbitration decisions entirely.  Clause 12 of the Bill provides that decisions or actions in relation to the government's 2012 decision cannot be appealed or reviewed.

It adds that "The Rules known as the rules of natural justice (including any duty of procedural fairness) do not apply to;  or in relation to, any conduct of the State that is, or is connected with, a disputed matter."  The Bill also seeks to make documents connected to a "disputed matter" exempt from freedom of information laws and grants criminal immunity to the states and its agents.

In this scenario, the rights under the arbitration awards gave Minerology a proprietary right to claim damages from the state.  The state, by negating the awards, has effectively expropriated a proprietary interest held by Minerology.

Expropriation of property is a hallmark of tyrannical governments.  Property rights are inextricably tied to individual liberty and limited government.  As United States founding father and second president, John Adams, famously said:  "Property must be secured or liberty cannot exist."  This is because an economic system that respects the right to own property and enforce property rights against others tends to strengthen individual autonomy and independence from the state.

The government's move is without justification.  The arguments in favour of the Bill have been to suggest that schools would be shut and nurses put out of work to pay a damages bill of $30 billion.  But Palmer himself asserts that he has not claimed that amount and the hearing to determine damages was scheduled to take place in November 2020.

Premier Mark McGowan has declared the state is "in a war" with Palmer, who has been branded an "enemy of the state".  This is the kind of language that might be applied to a person who is accused of treason.  But Palmer's only crime has been to raise a challenge to the WA border closure rules.

Undoubtedly Clive Palmer has his critics, but he is an Australian and is entitled to argue that the Australian Constitution should be applied, and to raise a challenge if he has standing to do so.  The WA government should respect this basic entitlement of Australian citizenship, not make a declaration of war.

The WA government's excessively petty response is incredibly dangerous.  The confirmation that the government is prepared to legislate away its liabilities presents a very real risk to any business who is considering investing in the state.  This is the definition of sovereign risk.

Scaring away capital and investment is the last thing Western Australia needs as the country crawls out of depressed economic conditions imposed in response to COVID-19.  But this is what the government is risking by pulling away at the threads of the rule of law.

The rule of law is the basic principle the separates the West from the rest of the world.  In the World Justice Project's Rule of Law Index 2020, 8 of the top 10 best performers for the rule of law were in Europe, while number 7 and 9 were New Zealand and Canada respectively.  Australia ranked 11th, above the United States and the United Kingdom.

Australia's political and legal system has a good reputation but this requires a commitment to uphold the rule of law.  Decisions like those of the WA government, as well as the arbitrary nature of the lockdowns imposed nationwide this year, demonstrates a recent failure to meet these basic standards of lawmaking.

While no government can claim to have a perfect record the WA government's response in its dispute with Minerology is a shameful betrayal of a core Australian legal tradition.

Blue-Collar Jobs Are Worthy Too

Labor senator Raff Ciccone's statement at the weekend that "there is dignity in all work" is something mainstream Australians have always understood, and at last the political class appears to have cottoned on.

Ciccone called for an overhaul of state and federal environmental laws to create more blue-collar jobs, and for limitations on legal injunctions — commonly referred to as "lawfare" — launched by activist green groups.

My research estimated that the lawfare provision, section 487 of the Environment Protection and Biodiversity Conservation Act 1999, has put more than $65bn of investment at risk in Australia by holding up major projects such as dams, coalmines and roads in court for a total of 10,100 days since the year 2000.

Much of this investment is concentrated in job-starved regional communities and includes projects from the $16.5bn Adani coalmine in central Queensland to a $30m salmon farm in Tasmania.

Graeme Samuel's confirmation that there is evidence to support the existence of lawfare, which he spoke of in his joint press conference with Environment Minister Sussan Ley on Monday, reflects a growing consensus that jobs must be put ahead of the inflated concerns of noisy, inner-city green groups.

Even former Labor leader Bill Shorten criticised the government's "go-slow" approach to approving major projects, saying on Twitter yesterday that the "ones who miss out are Australians in need of a secure job".

The interim report of the independent review of the EPBC Act, authored by Samuel and released on Monday, also rejected adding "climate change" as a trigger for the EPBC Act.

The climate trigger, long a hobby horse of green activist groups, potentially would have ­required all greenhouse gas-­emitting projects to be approved by the federal environment minister.  This would have constituted the de facto nationalisation of approvals for Australia's resources, transport, agricultural and heavy industrial sectors and the dest­ruction of hundreds of thousands of jobs.

Green groups also were expecting that the review would call for a federal government takeover of even more parts of environmental law.  Instead, jobs again were put first and the report recommended more devolution and decentralisation of authority to state governments — a recommendation the government has already adopted.

Ley said the government would pursue two bold reforms:  to accredit state governments to carry out environmental assessments and approvals on the federal government's behalf, and to explore market-based solutions to habitat rehabilitation.

The move to accredited state governments will substantially reduce duplication and sometimes contradictory regulatory requirements between the state and federal governments, and signals a shift away from Canberra's failed command-and-control approach to regulation.

Seeking market-based reforms to environmental conservations, meanwhile, has long been advocated by organisations such as the government's independent think tank, the Productivity Commission, to attain environmental outcomes with more flexibility and at less cost.

For example, the commission noted in its 2016 Regulation of Australian Agriculture report that "better use could be made of market-based approaches to native vegetation and biodiversity conservation at times".

The fact these two initiatives were announced on the same day as the release of an interim, rather than final, report indicates that the government is starting to understand how important job creation will be to Australia's recovery from the pandemic.

Between March and June, 815,000 jobs had been lost because of the COVID-19 social distancing regulations introduced by federal and state governments.  And while the official unemployment rate is 7.4 per cent, the real rate is 11.7 per cent once those who have on net left the labour market since March and those working zero hours are added.

Young Australians have been affected disproportionably by the lockdown measures, with 355,000 15 to 24-year-olds not in full-time education and not working, the equivalent to 29.6 per cent.  This is up from 22.3 per cent in March.

Getting Australians back into work will be the most important factor in economic and social recovery.  Mass unemployment is not only an economic problem, it is also a humanitarian tragedy.

Work is the epicentre of a good and flourishing life.  Those who work are more likely to own their own home, participate in their community and send their kids to good schools.  They are also likely to have far superior physiological and psychological health outcomes, and are less likely to become dependent on drugs and ­alcohol, or to commit crimes and to be in jail.

Losing your job because of coronavirus is one thing.  But missing out on the dignity of work because a small group of inner-city, university-credentialed elitists look down on blue-collar jobs and manual labour is not who most Australians are.

Parts of the interim report raise concerns.  The suggestion that ­project actions "must deliver a net gain for critically endangered species habitat and ecological community distribution" is vague and inviting itself to be used as a mechanism for throwing spanners in the works, while the proposed adoption of federal government-enforced national environmental standards could result in a bureaucratic and lawyer-infested investment quagmire.  These issues can be ironed out.

By putting jobs for mainstream Australians ahead of the boutique concerns of noisy activists, the government has a unique opportunity to develop a much needed pro-worker and pro-jobs economic recovery strategy.

A Simple Stimulus Step That Won't Cost A Cent: Stop Green Lawfare

Over $65 billion of investment, mostly in regional Australia, has been put at risk by a small group of environmental and inner-city activists who have exploited a special legal provision to engage in frivolous and vexatious legal activism without delivering a discernible environmental benefit.

Research recently released found that green groups such as the Australian Conservation Foundation and the Wilderness Society have used a legal provision in Commonwealth environmental law to hold up major projects in court for a cumulative total of 10,100 days since the year 2000.

Section 487 of the Environment Protection and Biodiversity Conservation Act specifically empowers green groups to challenge projects that have been approved by the federal environment minister.

With Australia facing the economic impact of coronavirus, it is now more important than ever to remove barriers to investment.

Since 2000 there have been 28 projects targeted through this provision, including coal mines, dams, vegetation management, and public infrastructure.  Prominent projects include the original $16.5 billion Adani coal mine, a $2.3 billion pulp mill in Tasmania, and a $767 million coal mine at Maules Creek in New South Wales.

Despite the costly delays, the vast majority of these cases have not led to environmental improvements.  According to my research, only three out of 51 cases since 2000 ― or six per cent ― have resulted in significant changes to environmental approvals.

The success of legal challenges is not the primary concern of green groups.  Their aim, as outlined in the 2011 Greenpeace document Stopping the Australian Coal Export Boom is to "stop projects outright", "increase costs", and "raise investor uncertainty".  By holding up projects in court, even without winning the case, they deter investment in the resources sector with the prospect of costly delays and increased legal risk.

For investors in the resources industry, the punishment is in the process.

The pursuit of environmental ends with no consideration of costs or care for those forced to bear those costs is characteristic of the green movement.

The movement is based largely in the inner cities, far away from those Australians who their policy prescriptions hurt the most.  In the 2019 federal election, over 80 per cent of the Greens' primary vote came from non-rural electorates, and their share of the vote was twice as high in the inner city compared to regional Australia.

Mining projects have been opposed at the cost of jobs in regional Australia and to the detriment of regional communities.  Continued restrictions on logging are destroying a once vibrant forestry industry.  Farmers suffering through severe drought have been forced to sit by hopelessly as they watch an abundance of water flow by out to sea due to onerous restrictions on irrigation and red tape preventing the construction of industry saving dams.

Landowners have faced hundreds of thousands of dollars in fines for the crime of trying to save their homes from bushfire by clearing trees.  For example, a Queensland grazier was fined $1 million in 2017 for clearing a fire break on his property previously ravaged by bushfire.  Fires have raged at a ferocity enabled by an abundance of fuel that environmentalists have ensured has not been adequately managed.

And of course, the green movement has opposed coal and gas generated power that delivers affordable and reliable energy.  A jump in electricity and gas prices may not be felt as strongly by Green voters who have a median household income $14,000 higher than the general public, according to research from Roy Morgan.  But for many people it is the difference between their small business turning a profit, being able to spend money on the kids, or the ability to heat their homes in winter.

Many of these struggles are simply not felt by inner-city elites.  It is all too easy to advocate "action on climate change" and radical environmental policies when you are not the one bearing the cost.

The resources and agriculture sectors are an integral part of the Australian economy and the lifeblood of regional Australia.  They represent 20 per cent of private capital investment and 75 per cent of the value of Australia's top 25 exports.  Outside the big cities, agriculture and mining are major employers and support the services and retail sectors that are built up around them.

While all Australians want positive environmental outcomes, duplicated layers of complex regulation combined with legal activism are imposing an unnecessary burden on regional Australia for no discernible environmental gain.

Green activism, enabled and emboldened by lax legal loopholes, poses an existential threat to the resources sector, regional communities, and the Australian way of life.  Repealing Section 487 should be the first step in reining in the excesses of the green movement.

Some Stimulating Ideas

Rather than engaging in a shortsighted and reckless cash splash, the federal government should seize the opportunity created by the economic fallout from the coronavirus to cut red tape, reduce taxes, and deliver reforms that will save the Australian economy from recession and form the basis for prosperity for decades to come.

The Morrison government is expected to announce today an economic stimulus package to offset the economic impacts of the coronavirus expected to be worth up to $20 billion.  In a similar style to the Rudd government's failed stimulus during the global financial crisis, pensioners and Newstart recipients are expected to receive one-off cash payments of around $500.  This is on top of a $2.4 billion package to deal with the health impacts of coronavirus.

It is likely the Australian economy will go backwards in the coming months and may enter a recession.  But this downturn is being primarily driven by disrupted supply chains and cashflow issues facing businesses in the wake of the coronavirus, not lower consumer spending.  A big government cash splash is not the answer.

Granted, people are staying home, large public events have been cancelled, and fewer tourists and international students are coming to Australia.

But receiving a government cheque will not mitigate the risk of going to the movies or a restaurant and potentially contracting the coronavirus.  The availability of money is not an issue, people's willingness to spend it is.

An effective response requires a focus on the supply side of the economy to keep businesses open and allow them to keep their staff employed.

A cash splash will only add to the $546 billion government debt, all of which must be repaid by our children and grandchildren.  Here are five more effective ideas.

Firstly, cut red tape.  I estimate that red tape costs the Australian economy $176 billion every year in lost economic output.  This is the equivalent to approximately 10 per cent of GDP, which makes red tape Australia's biggest industry.

Every minute and every dollar a small business owner must dedicate to filling out forms brings them a minute and a dollar closer to laying off staff or reducing their wages.  This is dangerous, as small businesses account for about half of all private sector employment.

Secondly, reduce the corporate tax rate.  At 30 per cent for businesses with an annual turnover of $50 million or more, Australia has one of the highest business tax rates in the world, one which is well above the OECD average of 23.9 per cent.

The US and the UK have significantly reduced their business tax rates in recent years, to just 21 per cent in the US and 19 per cent in the UK.

To assist Australian businesses, the corporate tax rate must be reduced to a competitive rate below 20 per cent for all companies.  This will ease cashflow pressures and enable businesses to invest in machinery and workers.  Additionally, it will attract overseas businesses and investment bringing more jobs, higher wages, and greater economic prosperity.

Thirdly, expand the Instant Asset Write-Off.  The IAWO improves cash flow and makes investments more affordable by allowing for a higher, immediate tax deduction on new capital investment.  Under the IAWO a painter buying a new van for $27,000, for example, can deduct the full cost immediately, rather than carrying the deductions over five years.  This leaves them $21,600 better-off today, allowing them to hire new workers, pay higher wages, or make other investments.

The IAWO is currently available to businesses with an annual turnover under $50 million and on investments worth up to $30,000.  By uncapping the turnover threshold and increasing the investment threshold to $1 million, the IAWO will immediately increase cash flow and facilitate new investment, creating more jobs.

Some reports suggest the government will attempt to stimulate demand, with certain groups advocating for measures targeted at particular subsets of the population.  For example, on 9th March Charmaine Crowe of the Australian Council of Social Service argued on Sky News that "the best way to (boost household expenditure) would be to increase Newstart."

If the government wants to increase demand, they should reduce taxes rather than increase spending.

This means, as a fourth measure, bringing forward the personal income tax cuts introduced in the 2019-20 Budget to take effect immediately.  The full tax cuts will mean some 94 per cent of wage-earners would face a top marginal tax rate of 30 per cent or less.  This will provide a significant boost to take-home pay, allowing Australians to keep more of their hard-earned money.  However, the full effect of the tax cuts aren't due to take effect until 2024-25.  The government should instead make them effective immediately.

Similarly, and finally, the government should consider a temporary pause in compulsory superannuation, allowing workers to receive the missing 9.5 per cent of their pay and give them the benefits of higher wages without adding to government debt.

Rather than engaging in another reckless cash splash, the government should respond to the coronavirus challenge by delivering the greatest economic reform agenda seen in a generation.  This will save the Australian economy from recession and set the nation up for decades of prosperity and success.

Climate Wars Are The Aussie Brexit

Climate change is to Australia what Brexit is to Britain.  That's because, just like on Brexit, perspectives on climate policy are as much about one's views on the future of the economy and society as they are on with the merits of the issue itself.

Because most of the inhabitants of the Canberra press gallery bubble can't see past the froth on their cappuccino, Tuesday's vote for the parliamentary leadership of the federal National Party has been presented as basically the product of Barnaby Joyce's ego and personality.  Maybe.  But something much bigger was at stake.

Under one leadership candidate, the Nationals would continue to follow the Liberals' climate change policies, which place a priority on adherence to the Paris Accord.  Pursuant to the accord, Australia has agreed to impose the deepest per capita cuts to CO2 emissions in the developed world.

Under the other candidate, the Nationals' position on climate change would instead have prioritised cheaper energy and industrial development.  A majority of the National Party MPs and senators voted for the first candidate.

These two positions reflect vastly different assessments of the politics of climate change and vastly different worldviews.  It seems that to several Liberal MPs (and presumably a few National MPs, too), if the Coalition somehow did more on climate change, many of the political challenges posed by climate change would go away.  This might be true, but history has demonstrated that more action on climate change never seems to be enough to satisfy those demanding further reductions in emissions.

Furthermore, the evidence that the public is demanding action on climate change is more nuanced than commonly assumed.

The evidence for this is not only the outcome of last year's federal poll, which was presented by many as the climate change election.  There's also data from surveys such as that by JWS Research reported in this newspaper in November:  when respondents were prompted on what they thought were the three most important issues the government should focus on, the environment and climate change was ranked fourth, behind cost of living, hospital, healthcare and ageing, and employment and wages.

INCREDIBLY REVEALING

When respondents were unprompted, 34 per cent nominated the environment and climate change, 28 per cent named healthcare and 22 per cent said employment and wages.  It is incredibly revealing that despite all of the attention devoted to climate change in nearly every single walk of life in this country, only about one-third of people rank it as one of the top three issues on which the government should focus.

When for example, former United Nations Framework Convention of Climate Change executive secretary Christiana Figueres said climate change policies provided "the chance to re-create the economy, to re-create the world", it's not unreasonable for those who believe the world could be better but who don't think it should be re-created, to take people like Figueres at their word and push back.

"THE PARTY FOR WORKERS"

This is the point that Nationals senator and former resources minister Matt Canavan made this week when he talked about the future of the Nationals as "the party for workers ... workers in coalmines, workers in shipyards and workers in factories".

Canavan was one of the four people most responsible for the Coalition's federal election victory in May — the others being first and foremost Prime Minister Scott Morrison, Treasurer Josh Frydenberg and the Liberals' federal director Andrew Hirst.  Canavan's work went largely unnoticed in Sydney and Melbourne but he was the one who turned the debate about the future of Australia's coal mines into a vote for or against economic development in regional Australia.  A large part of the reason the Coalition won 23 seats in Queensland to Labor's six is because of Canavan.  One outcome of the Nationals' leadership vote this week is that he is now on the backbench.

A re-created zero-emissions economy consistent with the vision of someone like Figueres has little place for workers in factories and definitely doesn't have room for coalminers.

At least for the British, as of Friday last week when Britain officially left the European Union, Brexit for the moment is settled.  In Australia though, there's no end in sight to the so-called climate wars.

Time To Break The Shackles

Western Australia has always been a fast-moving, entrepreneurial, and successful state.  Blessed with an abundance of natural resources, a thriving agricultural sector, and people with go-ahead attitude, WA has much to celebrate as the 2010s draw to a close.

More people than ever before are in full-time work, exports are booming, and West Australians possess a lifestyle that is the envy of the Eastern States.

Now is the time to take stock and consider the challenges and opportunities that WA has as we prepare to enter the first year of a new decade.

CHALLENGES

Red Tape

The first challenge for the West Australian economy is to cut red tape.

My recent research found WA regulations placed nearly 108,000 restrictions on businesses, organisations, and individuals.  The restriction count is comparable to the Eastern States, even though they have far bigger populations than WA.  There is significant work to do be done to cut the red tape burden that is weighing the economy down.

The Government has taken positive steps to cut red tape.  Its willingness to work with the Federal Coalition has delivered positive results.  Establishing a "one-stop shop" for environmental approvals will fast track investment in the resources sector by removing the onerous process of dealing separately with both State and Federal regulators.

Its Streamline WA project has also raised the profile of red tape reduction.  The challenge now is for the government to deliver reductions that unleash the WA economy.

Green Activism

The second major challenge is to fend off the continual attempts by the green movement to undermine WA's resources and energy sectors.

The mining industry alone accounts for 40 per cent of the WA economy.  Attempts by activists to shut down new mining projects through lawfare and boycotts must be resisted.  The Environmental Protection Authority's plans from earlier this year to introduce a backdoor carbon tax through industry "contributions" to a carbon abatement fund has fortunately been quashed.

The Government needs to ensure that environmental policy does not take the state down an economically harmful route.

The WA Government should form sensible policy to allow the resources sector to flourish.

The move to allow fracking last year was a step in the right direction.  However, the ban is still in place for 98 per cent of the state.

New gas projects will help drive down the cost of energy that is currently crippling the Australian economy.

Fair Share of GST

Thirdly, despite recent positive changes to the State distribution of GST, WA is still not receiving its share of revenue.  Even with improvements, WA continues to subsidise economically underperforming states like South Australia.

West Australians should reap the full benefits of their strong economic performance and the WA Government should argue for States to retain 100 per cent of the share of the GST that they raise.

OPPORTUNITIES

Small Businesses

With red tape reduction on the cards, and the phasing in of small business tax cuts by the Federal Government, small business in WA is in a strong position to thrive.  Small businesses account for 97 per cent of all businesses in WA and contribute over $48 billion to the State's economy.  Small business growth promotes competition and creates employment opportunities.  Favourable conditions for small business will allow WA to take full advantage of a strong culture of ingenuity and entrepreneurship.

Resources Sector

Next year will be another big year for the WA resources sector.  The deal struck between Australia and the United States on mining rare earth materials will be a boon for the State's mining sector.

The ability to form new supply chains with the US offers Australia's mining industry a significant opportunity.  WA has the resources to take full advantage of the new partnership.  WA is already home to the largest rare earths producer outside of China, Lynas, which mines and processes rare earth oxides at Mt Weld, south of Laverton.

High iron ore prices have boosted Australia's mining exports and strong demand from Asia for Australian resources is likely to continue to grow in the new year.

The strong prices have resulted in higher-than-forecast Government surpluses, which have given the Government the opportunity to tackle the State's growing debt.  While prices are expected to ease, the recent pickup in investment combined with moves to cut red tape in the resources sector will put the WA economy in a good position moving into the 2020s.

Sporting Capital of Australia

And finally, WA has the opportunity to turn Perth into Australia's new sporting capital in the new decade.

New and improved facilities will attract more sporting events.  With the redevelopment of the WACA, the iconic wicket can play a greater part in world cricket.  Optus Stadium has packed more Fremantle and West Coast fans in to create an even more hostile environment for the eastern clubs.

This should go a long way to boosting the odds of bringing a flag home to Perth in the 2020s.

Australia Must Withdraw From Paris Agreement

President Trump is keeping a promise he made during the 2016 election campaign to get the United States out of the Paris Climate Agreement.  Australia must do the same.

In a speech to the Lowy Institute in October, Prime Minister Scott Morrison warned of the dangers of "negative" globalism;  which "coercively seeks to impose a mandate from an often ill-defined borderless global community."  "And worse still", Morrison added, "an unaccountable internationalist bureaucracy."

The Paris Climate Agreement is an exemplar of this "negative globalism."

The Paris Agreement is a global agreement between 188 nations, which mandates greenhouse gas emissions reductions.  It is littered with neo-pagan earth-worship neologisms like "Mother Earth" — with a capital "M" and capital "E" — "climate justice", and "international equality".  This could have easily have been penned by the great unwashed of Extension Rebellion in between spells of gluing their hands to footpaths, or spitting on passers-by as they make their way to work.

Seriously, do any Ministers read these agreements before they sign them?

Under the Paris Agreement, Australia is forced to reduce its emissions by 28 per cent by 2030 on 2005 levels.  These are the deepest cuts imposed on any nation on a per capita basis.

While Australia must cut its emissions, China — the world's largest emitter of greenhouse gasses — is able to increase its emissions by 150 per cent.

The world's second largest emitter, the United States, has now issued formal notice that it will be exiting the agreement.

Not one of the nations of the European Union — collectively the third largest emitters — are on target to meet their emission reduction obligations.

And India, the fourth largest emitter, will meet its emission reduction requirements under the business as usual scenario, meaning the Paris Agreement has no effect.

So while the Greta Thunberg's and Bob Brown's of the world may want to stop Adani, they are curiously silent about the fact that China has some 1,032 coal-fired power stations currently in operation, and a further 126 under construction.  Or that has India 291 coal plants and 33 more on the way.

Much of China and India's coal plants are fuelled using Australian coal.  Yet Australia has just 20 coal-fired power plants in operation and a grant total of zero in construction.  Apparently, Australian coal is good enough to be exported around the world, but cannot be used to deliver affordable and reliable energy at home.  Australia first?  More like Australia last.

You might be wondering which nations are actually meeting their Paris Agreement obligations.

The Climate Action Tracker, a consortium of three research organisations, tracks the progress of 32 nations in meeting their Paris Agreement emissions reduction targets.  These 32 nations account for 80 per cent of total emissions — so they provide a good baseline for how the agreement is faring.  The tracker finds that only Morocco has policies which are "Paris Agreement compatible".  Morocco might be an economic powerhouse, but it accounts for just 0.6 per cent of global greenhouse gas emissions.

Put simply, Australia is being taken advantage of by the rest of the world.  The negotiators from Brussels, Beijing, and Mumbai, have out-played Australia's inept and incompetent foreign policy and economic establishment.

All the nations failing to follow the agreement are able to obtain a competitive economic advantage against Australia.  Low electricity prices mean more investment, jobs, and economic growth.

It would be a comedy if it weren't so tragic.

My research has estimated that the Paris Agreement will increase the cost of generating electricity in Australia by $52 billion, or $8,566 per family.  This $52 billion could provide funding for 22 new hospitals, two decades' worth of the Gonski 2.0 education funding, or over four years' worth of funding for the National Disability Insurance Scheme.

For families, $8,566 would provide funding for five years' worth of schooling at a local government school, paying down entire credit card debt, or four years' worth of electricity bills.

For all of this economic self-harm, there will be no noticeable environmental benefit.  Researchers from the Massachusetts Institute of Technology have estimated that the Paris Agreement will only produce a two-tenths of one-degree Celsius reduction in global warming by the year 2100.

In other words, instead of the temperature reaching 42 degrees on a hot summer's day, it will be just 41.8 degrees — so don't throw away your air-conditioner just yet.

This economic self-harm is even more foolish when you consider the fact that Australia accounts for just 1.3 per cent of the global emissions caused by human activity, and human activity accounts for just three per cent of total emissions.  Even Australia's Chief Scientist Alan Finkel said the complete cessation of all emissions from Australia would do "virtually nothing" to the global climate.

President Trump is putting America first and the globalists last by withdrawing from the Paris Climate Agreement.

Scott Morrison and the Coalition would do well to remember that they were elected by the Australian people to represent the voters of Penrith and Parramatta, not Paris.  An agreement which imposes significant and irreparable economic damage without delivering a discernible environmental benefit is the very definition of negative globalism.

Greens Only Want To Make Power Less Affordable

A Greens-backed bill prohibiting government funding of coal-fired power in Australia would further worsen Australia's electricity crisis.  Government intervention in the energy market has seen electricity prices increase by 220 percent over the last 20 years, far outpacing inflation and wage growth.

Policies that favour renewable energy at the expense of coal and gas have proceeded every major jump in electricity prices.  This has been the case with the introduction of the Renewable Energy Target in 2000, its expansion in 2009, the introduction of a carbon tax in 2012, and the signing of the Paris Climate Agreement in 2015.  The only substantial drop in electricity prices over the past 20 years followed the repeal of the carbon tax.

Contrary to what green groups would have you believe, coal-fired power cannot be replaced by wind and solar any time soon without major breakthroughs in battery and storage technology.  Coal remains one of the cheapest and reliable sources of electricity generation.

This is why there are currently some 256 coal-fired power stations being constructed around the world.  This includes 126 stations which are currently being built in China and 33 in India, many of which will be powered with coal exported from Australia.

In contrast, as a result of onerous red tape on the resources sector and subsidies to wind and solar energy, no new coal-fired power stations are currently under construction in Australia, and only three coal-fired units have been built since 2006.  This is despite the existence of over 1000 years' worth of coal deposits sitting beneath Australian soil.

Not only are our unnecessarily high electricity bills a burden for many Australians struggling to heat their homes in winter, they are also crippling businesses.  High electricity costs and reduced power reliability has made Australia less competitive and has contributed to private investment falling to a historically low 11.4 per cent of GDP.  This is lower than the rate which prevailed during the economically hostile Whitlam era and is a key cause of slow productivity growth and stagnant real wages in the private sector.

All forms of electricity generation should compete in an open and free market without government intervention.  When the market is left to its own devices, the technological makeup of the grid will deliver affordable and reliable power in line with the needs of households and businesses.

The bid to ban government funding of coal power is objectionable, not because the government should be funding coal, but because it would further distort the market away from reliable electricity production.  The bureaucratic government management approach to electricity has long poured billions of dollars into unreliable renewables and undermined the profitability of coal-fired power.

To address Australia's energy crisis, the government needs to take a technologically neutral approach to energy production to ensure the market's ability to deliver affordable and reliable power.  This means withdrawing from the Paris Climate Agreement, ending the subsidisation of renewable energy, and not continuing with the Renewable Energy Target beyond 2020 when it is due to end.

Governments at the Commonwealth and state level must also reduce regulation and red tape on the development of coal-fired power stations (such as provisions which allow frivolous litigation), lift restrictions on gas explorations (such as state-based bans and moratoria), and remove the ban on the development of nuclear power.

A policy of technological neutrality where governments do not pick winners in the energy market will ensure Australia can return to being a nation of affordable and reliable energy.

Eighty-Nine Billion New Reasons To Quit The Paris Agreement

Momentum continues to build for Australia to exit the Paris Climate Agreement.

New economic modelling prepared by Managing Director of BAEconomics and former executive director of the Australian Bureau of Agricultural and Resource Economics, Dr Brian Fisher, was released on Tuesday.  It shows that the emission reduction obligations under the Paris Climate Agreement will cost Australia at least $89 billion in terms of foregone economic output, and result in 78,000 fewer jobs over the period 2021-2030.

The modelling also shows that the Paris Climate Agreement will result in a 21 per cent reduction in output in the thermal coal sector, a two per cent reduction in real wages, and a $12 price hike to wholesale electricity prices over the period 2021-2030.

Under the Paris Climate Agreement, Australia must reduce its greenhouse gas emissions by between 26-28 per cent on 2005 levels by 2030.  This translates into a 50 per cent cut in per capita terms, which is the deepest cut in the developed world.  China, for example, is able to increase its aggregate emissions by 150 per cent on 2005 levels by 2030 which equates to around a 120 per cent increase in per capita terms.

The research by Dr Fisher follows my recent research report published last year that the Paris Climate Agreement would cost at least $52 billion by 2030 in terms of the higher cost of generating electricity.  The estimates provided by Dr Fisher are higher as the modelling includes the flow-on economic costs of higher electricity prices, including lower business investment, slower employment growth, and slower wages growth.

However, what is perhaps more interesting than these admittedly dry economic figures is that the Paris Climate Agreement itself is disintegrating.  The four largest greenhouse gas emitters in absolute terms are not in the Paris Agreement (the United States) or their emissions are not constrained by the Paris Agreement (China and India) or are not on target to meet their obligations under the Paris Agreement (the European Union).

Further, the Climate Action Tracker, which is a consortium of three research organisations, tracks national progress of 32 nations which collectively account for 80 per cent of global emissions in meeting their Paris emission reduction targets.  The tracker finds that just seven nations out of the sampled 32 nations are on track to meet their national emissions reductions contributions to keep warming below 2°C above preindustrial levels.  Those nations — Morocco, the Gambia, Bhutan, Ethiopia, Costa Rica, the Philippine, and India — collectively account for just 6.6 per cent of global greenhouse gas emissions.

Besides, even if the Paris Agreement were implemented in full by all signatory nations it would only produce a two-tenths of one-degree Celsius reduction in global temperature by the year 2100, according to researchers from the Massachusetts Institute of Technology.

Australia accounts for just 1.5 per cent of global emissions from human activity.  And human activity accounts for just three per cent of total emissions.  Even the complete deindustrialisation of the Australian economy would make no noticeable difference to the global climate.

The case for exiting the Paris Climate Agreement has never been stronger.  It will impose significant and irreparable economic damage without delivering a discernible environmental benefit.  Most other nations are not on target to meet their obligations.  And what Australia does makes no noticeable difference to the global climate.

Remaining in the Paris Climate Agreement is simply not in Australia's national interest.  Exiting the Agreement should be a bipartisan priority.

Why Won't Australia's Ruling Elite Acknowledge The Benefits Of Coal?

The hypocrisy of Australia's anti-coal contingent was exemplified this week by Richard Marles, who is the federal Labor Party's spokesman for Defence.

Mr Marles said "the global market for thermal coal has collapsed, and wonderful — that's a good thing."

This statement is, of course, untrue.

There is a desire among many in the higher echelons of Australia's political, corporate, and legal system who want to see coal finished once and for all.

There are currently 2240 coal-fired power stations in operation around the world.  Last year there was a record amount of coal-fired power generated and coal is Australia's biggest export.  The business has hardly collapsed.

But the deeper problem with Mr Marles' statement, though, is the wishful thinking it reflects.

This is demonstrated by a recent decision by Glencore, Australia's largest coal miner, to cap its global coal output at current levels apparently in response to pressure from climate activist shareholders.

It is also demonstrated by a decision handed down earlier this month by the Land and Environment Court to refuse the implementation of a new coal mine near Gloucester on the NSW mid-north coast.  The court said the mine should not proceed because it would increase greenhouse gas emissions.

Most dramatically, though, it is demonstrated by the struggles that the Adani Carmichael coal mine and infrastructure project has faced.

The project, located in the Galilee Basin in central Queensland, is exactly the kind of project this country needs.  It is set to create 1500 jobs directly and support a further 5000 jobs through flow-on effects in other industries.

But it has been held up in the regulatory approvals process for eight years, faced 10 legal challenges, and prepared a 22,000-page environmental impact statement.

Indigenous landowners that stand to be affected by the mine and associated infrastructure even recently voted 294 out 295 in favour of the project going ahead.

But this won't stop anti-coal activists who are against the development of Australia's natural resources.  Geoff Cousins, former president of the Australian Conservation Foundation, gave the game away when he said in 2015 that "we have no desire or intention to simply delay the Adani Carmichael mine.  We want to stop it in its tracks."

This is not just a concern for the Maroons up north, or even just for Australians.  The anti-coal activism could deprive the world's poorest of access to cheap and reliable electricity.

My 2015 report conservatively estimated that Australian coal could help about 82 million Indians access electricity.

Many Indians who would no longer be able to access Australian coal will not magically shift to wind and solar energy.

Instead they will burn wood, crop waste, and animal dung, sometimes in open furnaces in their homes.  Not only is this bad for their environment, it is bad for the people as four million people each year are estimated to die from illnesses such as pneumonia, stroke, and lung diseases as a result of the pollution.

Is that wonderful, Mr Marles?

It is curious that many on the left are happy to send $4.2 billion a year in foreign aid to lesser developed nations, but want to stop those same nations getting access to Australian coal.  Perhaps they don't really care about the world's poorest and are instead more interested in lining their pockets with government rebates and subsidies for wind and solar energy.

What all of this also reveals is how hypocritical and out of touch the ruling elites of Australia are.

They tell us that high electricity prices and supply disruption are the "price of progress".

Following power blackouts affecting 160,000 homes in Victoria in January this year, for example, Greens senator Richard Di Natale said Australians were being unreasonable if they complained about the inconveniences of not having power.

Tell that to the truckie who is up at 4am to drive 14 hours up the Pacific Motorway.

Tell that to millions directly or indirectly employed in energy-intensive heavy industry.

Tell that to the family-run cafe on the street corner that can't afford to pay the bills.

Australia now has the fourth highest electricity prices in the world.

Yet many in the ruling class are blissfully unaware of the pain that is being afflicted.  Or maybe they are aware of the pain.

And maybe imposing pain on the unwashed masses is precisely the punishment the elites think they deserve for "complaining" about not having power.

What would be wonderful is instead of our leaders bemoaning coal, they were instead proud of our nation, our resources sector, and for the role coal has played in making Australia a prosperous nation that has played an integral role in alleviating global poverty.

Maybe they could even put their hand on their hearts when they sing "Our land abounds in nature's gifts."

Businesses And Workers Pay A High Price For Zero Emissions Targets

Don Harwin is to be credited for his role as the state's Minister for Energy and Utilities.  But his recent suggestions for the future of energy and climate policy in Australia are misguided.

This week Harwin touted the NSW government's policy of net zero emissions by 2050, argued for the integration of climate and energy policy, and decried the lack of co-operation between state governments and the Commonwealth.

Interestingly, Harwin also argued for the need to "avoid unnecessary market interventions or distortions" — which is strange given that he is apparently unconcerned with the distortion caused by the $4.8 billion in subsidies that the renewables sector receives each year.

The definition of "unnecessary" appears to mean any intervention that favours coal, while all interventions that favour renewables are conveniently considered to be "necessary".

Mr Harwin also states that the NSW government "did not in principle oppose" the now-abandoned clean energy target or the emissions intensity scheme and was "quite happy to support" the National Energy Guarantee.

However this, too, appears inconsistent with the desire to avoid unnecessary market interventions, as each proposal was the functional equivalent to a carbon tax and would have ushered in mammoth amounts of government regulation.

This is because the only way that NSW could ever get close to the net zero emissions target is through substantial taxpayer-funded favouritism of the renewables sector.

And this spells one thing:  higher prices for consumers and businesses.

Over the past 10 years the share of wind and solar in the National Energy Market has grown from around 2 per cent to 10 per cent.

At the same time, over that period residential electricity prices have risen a staggering 110 per cent.  This is five times the rise compared with economy-wide inflation — which has increased by just 22 per cent.

This means that Australia now has the fourth-highest electricity prices in the world, according to the Australian Competition and Consumer Commission (ACCC).

That is despite the fact that Australia has over 1000 years' worth of coal, 30 per cent of the world's uranium deposits, and an abundance of onshore and offshore gas.

This is wreaking havoc on industry.

An ACCC report from 2017 gave the example of a retail grocer whose electricity bill increased by 53 per cent in just one year.

And BlueScope steel, which employs 6000 Australians, saw its electricity and gas costs rise by some 92 per cent in just two years.

All told, more than 65,000 jobs have been destroyed in the energy-intensive manufacturing sector in the past decade, in part because of high and rising electricity prices.

That is 18 jobs lost each day — 18 fewer Australians who are able to experience the dignity of work.

Mr Harwin doesn't mention these people or businesses.

Perhaps that's because they don't count to policy-makers obsessed with reducing emissions.

What is worse is that these economic and social costs are being imposed without a discernible environmental benefit.

Australia accounts for just 1.3 per cent of global emissions from human sources.  NSW accounts for just a fraction of that — and humans account for just 3 per cent of all emissions from human and non-human sources.

Even the entire Australian economy shutting down would make no noticeable difference to global emissions or the global climate.

Sitting underneath emission reduction policies is the idea that there is an inevitable global transition taking place from coal to wind and solar.  But this is demonstrably false.

Global spending on renewable energy declined by 7 per cent in 2017;  the largest drop in 15 years

China recently removed targets for the construction of solar farms and issued orders for local governments not to approve solar farms that need subsidising.

There are some 2240 coal-fired power stations currently in operation around the world.

A further 708 have been announced, or have received pre-permission or permission to be constructed.

A report released by the International Energy Agency on Tuesday found that coal still provides the largest source of electricity in the world and will continue to do so for some years.

And the jewel in the crown of the environmentalists, the Paris Climate Agreement, is disintegrating.

The largest emitter of greenhouse gases, China, is completely unconstrained by the agreement and is expected to increase its emissions by 150 per cent by 2030 on 2005 levels.

The second-largest emitter, the United States, has announced it will exit the agreement.

And not one of the nations in European Union, who are collectively the third-largest emitters of greenhouse gases, are on target to meet their emission reduction targets.

This wrangling over energy policy gets to a much deeper divide within the Coalition at the state and Commonwealth level, which in turn reflects a divide within the Australian electorate.

It is a contest between Penrith and Paris.

Between lower power prices and lower emissions.

And between the hardworking suburban working- and middle classes and the inner-city elites.

The permanent political class in Canberra and on Macquarie street have for years disregarded the interests of anyone who lives more than 10km from the city.

Whether on energy, population growth or the culture wars, the interests of the out-of-touch elite has taken precedent.

Now is the time for the NSW and Commonwealth governments to provide leadership by getting out of the Paris Climate Agreement, removing subsidies and allowing Australia's resources sector to flourish.

Ten Points About The Paris Climate Agreement

SUMMARY

1. The binding international emissions reduction obligations (the "Paris obligations") imposed on Australia by the Paris Climate Agreement (the "Paris Agreement") will result in significant and irreparable economic and social costs without producing a discernible environmental benefit.
2. Australia is not "on track" to meet the Paris obligations despite extensive and prolonged government intervention in the energy market that has resulted in Australia having the fourth highest electricity prices in the developed world, according to the Australian Competition and Consumer Commission.
3. Significant further reductions in emissions from the energy, transport, and agricultural sectors beyond those already planned are required for Australia to meet its Paris Agreement obligations.
4. It has been acknowledged by government ministers that Australia has committed to the deepest cuts to emissions per capita in the developed world.
5. The four largest greenhouse gas emitters in absolute terms are not in the Paris Agreement (the United States) or their emissions are not constrained by the Paris Agreement (China and India) or are not on target to meet their obligations under the Paris Agreement (the European Union).
6. Australia can legally withdraw from the Paris Agreement, or can unilaterally reduce its emissions obligations, at any time, and for any reason.
7. What Australia does will make no noticeable difference to the global climate.  Even if the Paris Agreement were implemented in full by all signatory nations it would only produce a two-tenths of one-degree Celsius reduction in global temperature by the year 2100, according to researchers from the Massachusetts Institute of Technology.

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BACKGROUND

On 11 August 2015, the federal government announced Australia would adopt a policy of a obligation to reduce greenhouse gas emissions by 26-28 per cent by 2030 on 2005 levels. ⁽¹⁾

The obligation is known as an "Intended National Determined Contribution" under the United Nations Framework Convention on Climate Change ("UNFCCC").

The obligation was announced in preparation for the 21st Conference of the Parties ("COP21") to the UNFCCC to be held in Paris from 30 November to 11 December 2015.  The obligation extended Australia's previous commitments to reduce greenhouse gas emissions by 5 per cent by 2020 based on 2000 levels.

On 12 December 2015 following the conclusion of "COP21", 195 Parties to the UNFCCC (including Australia) agreed to the terms of what became known as the "Paris Climate Agreement".  Under Australian law, the Paris Agreement is a treaty. ⁽²⁾

The Paris Agreement consists of a Preamble, 29 Articles, and 16 principles, many of which are completely unrelated to environmental matters and make reference to matters such as "Mother Earth", "climate justice", "empowerment of women", and "international equity". ⁽³⁾  For example, the Preamble says:

"Acknowledging that climate change is a common concern of humankind, Parties should, when taking action to address climate change, respect, promote and consider their respective obligation on human rights, the right to health, the rights of indigenous peoples, local communities, migrants, children, person with disabilities and people in vulnerable situation and the right to development, as well as gender equality, empowerment of women and international equity."

"Noting the importance of ensuring the integrity of all ecosystems, including oceans, and the protection of biodiversity, recognized by some cultures as Mother Earth [sic], and noting the importance for some of the concept of 'climate justice' [sic], when taking action to address climate change."

The purpose of the Paris Agreement, set out in Article 2, is to:

• Hold the increase in the global average temperature to well below 2°C above pre-industrial levels.
• Increase the ability to adapt to the adverse impacts of climate change and foster climate change resilience and low greenhouse gas emissions development.
• Make finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development. ⁽⁴⁾

Subsequent articles deal with matters such as mechanisms for the accounting and reporting of greenhouse gas emissions, the provision of financial resources by developing countries to developing countries, and the sharing of technology.

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AUSTRALIA WILL NOT MEET ITS PARIS OBLIGATIONS WITHOUT FURTHER SUBSTANTIAL INTERVENTION

Some have claimed that no further intervention is required for Australia to meet its Paris Agreement obligations.

• On Alan Jones' 2GB program, 11 September 2018 the Prime Minister, The Hon Scott Morrison, said "... 26 per cent, we will meet in a canter ... we will just meet it because of technology and business as usual." ⁽⁵⁾
• The Minister for Energy, The Hon Angus Taylor MP, said on Sky News on 6 September 2018 "... we're going to reach the ... 26 per cent emissions reduction target anyway." ⁽⁶⁾
• The Minister for the Environment, the Hon Melissa Price MP, stated on 9 October 2018 on the ABC AM radio program "we are already on target to do that [meet the Paris obligations]." ⁽⁷⁾
• The Minister for Defence, The Hon Christopher Pyne MP, said on Sky News on 3 September 2018 "We will reach our 26 per cent target on schedule with the measures we have in place." ⁽⁸⁾

This is false.  Australia is less than a third of the way to meeting the Paris Agreement obligations.  And most of the reduction to emissions has come from restrictions on land clearing practices which cannot be repeated. ⁽⁹⁾

The best available evidence suggests that Australia will not meet its emissions reduction obligations under current policy settings.

• The Department of Environment estimated that under the status quo emissions in Australia are expected to decline by just five per cent by 2030 on 2005 levels. ⁽¹⁰⁾
• The IMF estimated that Australia's emissions will be 43 per cent higher by 2030 than what was expected in 2015. ⁽¹¹⁾
• The Climate Action Tracker estimates that under current policy settings Australia's emissions will be 30 per cent above the Paris Agreement requirements. ⁽¹²⁾
• The Jacob's Report for the Finkel Review released on 21 June 2017 contained the following statement:  "Emissions fall in the BAU but not enough to meet the annual emissions targets." ⁽¹³⁾
• The Energy Security Board found that, under the status quo, emissions from the electricity sector would be nine per cent higher than what would be required under the Paris Agreement. ⁽¹⁴⁾  And the electricity sector only accounts for around one-third of all emissions in Australia.

A report which has been relied upon by the Prime Minister and the Minister for Energy to support the claim that Australia is on track to meet the Paris Agreement obligations actually shows the opposite.  The 2017 Review of Climate Change Policies states that we (Australia) are "on track to meet our 2030 target", meaning the Paris Agreement obligation.  However, that same report estimates that Australia's emissions will be just five per cent below 2005 levels by 2030. ⁽¹⁵⁾

Substantial further government intervention will be required for Australia to meet its Paris Agreement obligations.  If cuts to emissions do not occur in the electricity sector (which accouts for the most emissions at 33 per cent), then they will need to take place in the transport sector (which accounts for the second most emissions at 19 per cent) and the agriculture sector (which accounts for the third most emissions at 14 per cent), according to figures from the Department of Environment.

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AUSTRALIA'S EMISSION REDUCTION OBLIGATIONS ARE THE DEEPEST IN THE DEVELOPED WORLD

Australia's headline obligation is to reduce emissions by 26-28 per cent by 2030 on 2005 levels.  However, the obligation is the deepest when viewed on a per capita or a per GDP (known as emissions intensity) basis.  Under the Paris Agreement, Australia's emissions must drop 50 per cent by 2030 on 2005 levels on a per capita basis, and emissions per unit of GDP must drop by 64 per cent. ⁽¹⁶⁾

The nature of this commitment has been explicitly noted a number of times by government ministers, including by two former Prime Ministers.  In a joint media release the then Prime Minister, The Hon Tony Abbott MP, the Minister for Foreign Affairs, The Hon Julie Bishop MP, and the Minister for the Environment, The Hon Greg Hunt MP, said:

• "Our emissions intensity and emissions per person will fall further than other developed economies [emphasis added]." ⁽¹⁷⁾

In a joint media release the then Prime Minister, The Hon Malcolm Turnbull MP, the Minister for Foreign Affairs, The Hon Julie Bishop MP, and the Minister for the Environment and Energy, The Hon Josh Frydenberg MP, said:

• "This target ... will halve our per capita emissions making it one of the highest targets in the G20 on that basis [emphasis added]." ⁽¹⁸⁾

An accompanying fact sheet from the government noted:

• "On a reduction in per person and emissions intensity basis, our target will exceed those of the United States, Japan, the European Union, Korea, and Canada [emphasis added]." ⁽¹⁹⁾

Figure 1:  Per Capita Emission Reduction Obligations under the Paris Agreement

Source:  Department of Environment

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AUSTRALIA CAN WITHDRAW FROM THE PARIS AGREEMENT

Article 28 deals with withdrawal from the Paris Agreement.  It reads:

• "At any time after three years from the date on which this Agreement has entered into force for a Party, that Party may withdraw from this Agreement by giving written notification to the Depositary."
• "Any such withdrawal shall take effect upon expiry of one year from the date of receipt by the Depositary of the notification of withdrawal, or on such later date as may be specified in the notification of withdrawal."
• "Any Party that withdraws from the Convention shall be considered as also having withdrawn from this Agreement." ⁽²⁰⁾

The provisions of Article 28 whereby a country can't withdraw within three years of entering into the Paris Agreement is unclear, given that a current government can't bind the actions of a future government.  The principle of parliamentary sovereignty recognises for instance that the Turnbull government can't restrict the Morrison government from reversing its promises under the Paris Agreement. ⁽²¹⁾  Hence, the government can withdraw from the Paris Agreement, with immediate effect.

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AUSTRALIA CAN REDUCE ITS EMISSION OBLIGATIONS UNILATERALLY

Article 4.11 of the Paris Agreement allows for unilateral alternations to the emissions obligation.  That Article states

"A Party may at any time adjust its existing national determined contribution with a view to enhancing its level of ambition, in accordance with the guidance by the Conference of the Parties serving as the meeting of the Parties to this Agreement." ⁽²²⁾

However, while Article 4.11 says "with a view to enhancing its level of ambition", this does not prohibit a country from lowering its obligations.  Susan Biniaz, the US State Department's lead climate change lawyer throughout the negotiations of the Paris Agreement, noted "it doesn't legally prohibit [a Party] from changing [targets] in another direction". ⁽²³⁾

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THE NATURE OF THE PARIS AGREEMENT HAS FUNDAMENTALLY CHANGED

The nature of the Treaty has fundamentally changed since Australia singed up in 2015.  At the time it was expected that other nations would adopt measures to reduce emissions.  However, many signatory nations are not on track to meet their Paris Agreement obligations:

• China, the world's largest emitter, is expected to increase its emissions by 150 per cent on 2005 levels by 2030. ⁽²⁴⁾
• The United States, the second largest emitter, has provided formal notice that it will be withdrawing from the Paris Agreement. ⁽²⁵⁾
• None of the European Union nations, collectively the third largest emitters, are on track to meet their emission reduction requirements. ⁽²⁶⁾
• India, the fourth largest emitter, will meet its emission reduction requirements under the business as usual scenario, meaning the Paris Agreement has no effect. ⁽²⁷⁾

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EUROPE SHOULD NOT CONTROL AUSTRALIA'S ENERGY POLICY

Representatives of the European Union (EU) have stated that they will not participate in a free trade agreement with Australia if Australia is not party to the Paris Agreement.

• The French foreign affairs minister, Jean-Baptiste Lemoyne, stated "No Paris Agreement, no trade agreement." ⁽²⁸⁾
• The EU Trade Commissioner Cecilia Malmstrom stated that a "Paris deal reference [is] needed in all EU trade agreement[s] today." ⁽²⁹⁾
• The European Parliament passed a resolution to make ratification and implementation of the Paris Agreement a condition for future trade agreements. ⁽³⁰⁾

Trade with other nations is an important cornerstone of prosperity.  However, it is not the only consideration.  The demand that Australia implement the Paris Agreement is an intolerable requirement.  It would provide the EU with effective control of Australia's domestic energy policy and consequently erode Australia's national economic sovereignty.  Australia should not be a signatory to such a trade agreement.

• The EU is hypocritical.  The EU insists that Australia implement the Paris Agreement obligations, yet no EU nation is on track to meet its Paris Agreement obligations. ⁽³¹⁾
• Electricity prices in the EU are cheaper than in Australia, in part because of their use of nuclear energy. ⁽³²⁾  This provides the EU with a competitive advantage over Australia which they are seeking to maintain by locking Australia into the Paris Agreement while they ignore it.

The costs of implementing the Paris Agreement in Australia dwarf the benefits of extended trade with the EU:

• The EU estimated a €2.7-4.2 billion (AUD$4.3-6.8 billion) gain in GDP for Australia by 2030 from the FTA. ⁽³³⁾
• My research estimated implementing the Paris Agreement would cost at least $52 billion by 2030. ⁽³⁴⁾

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THE PARIS AGREEMENT IS BAD FOR AUSTRALIAN TAXPAYERS

A component of the Paris Agreement is the Green Climate Fund (GCF).  The GCF is administered by the United Nations and uses taxpayer funds from developed nations to provide hand-outs to wind, solar, and other carbon mitigation programs in developing nations.  To date the fund is worth $USD10 billion, of which Australia has provided $AUD200 million. ⁽³⁵⁾

There are serious concerns about the efficacy of the GCF:

• Rodríguez Osuna, who was a civil society observer on of the fund's board, said "the fund has no information disclosure policy and no accountability mechanism, yet the board is approving project proposals." ⁽³⁶⁾
• Liane Schalatek, also a civil society observer on the fund's board and associate director of a German-based green group, said "there is a real lack of transparency" about how decisions are made. ⁽³⁷⁾
• Less than a tenth of the funding has gone to the kind of projects that make up the fund's mandate:  those owned and controlled by the poorer nations themselves. ⁽³⁸⁾

Moreover, large investment banks appear to have been amongst the biggest beneficiaries of the program:

• A project provided $USD265 million in equity and grants to Geeref Next, a Luxembourg-based investment fund. ⁽³⁹⁾
• $USD110 million in loans and grants was provided to Kazakhstan by way of London-based United Green Energy, and the investment arm of Kazakhstan's sovereign wealth fund. ⁽⁴⁰⁾

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A "LOW CARBON FUTURE" IS A POLITICAL INVENTION, NOT AN INEVITABILITY

Figure 2:  Number of New Coal-fired Power Stations

Source:  Global Coal Plant Tracker

A "low carbon future", and the "transition to renewable energy" are political inventions, not inevitabilities.  Coal-fired power stations are numerous, dominant, and continue to be constructed around the world.

• There are 2,240 coal-fired power stations currently in operation around the world.
• A further 708 have been announced, have received pre-permission or permission to be constructed, or are currently under construction.
• There are 236 forthcoming coal-fired power stations in China;  88 in India;  70 in Indonesia;  42 in Turkey;  36 in Vietnam;  25 in the Philippines;  and 23 in Bangladesh. ⁽⁴¹⁾

However, there are zero new coal-fired power stations expected to be implemented in Australia under the Paris Agreement.

Similarly, Australia is one of the few nations in the developed world which doesn't utilise nuclear power, ⁽⁴²⁾ despite being home to 30 per cent of world's uranium deposits. ⁽⁴³⁾

Figure 3:  Number of Nuclear Reactors by Country

Source:  Statista

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THE PARIS AGREEMENT WILL IMPOSE IRREPARABLE ECONOMIC DAMAGE

The government's original plan of implementing the Paris Agreement emission reduction obligations solely in the electricity sector would have cost at least $52 billion by 2030, in terms of the higher cost of generating electricity. ⁽⁴⁴⁾  This is because the Paris Agreement puts reducing emissions ahead of reducing electricity prices or improving supply reliability.  Policy which focusses on emissions reductions necessarily will lead more intermittent, weather-dependent energy being generated from wind and solar, at the expense of reliable base-load energy which comes from coal-fired power stations.

The contribution of solar and wind energy generation has grown from around one per cent in 2007 to 16 per cent today.  Over that period, prices have risen by 130 per cent.  This follows a period of real price stability from the early 1980s to 2007, when wind and solar where virtually non-existent.  This has led to Australia having the fourth highest electricity prices in the developed world.

The government has claimed that it is decoupling the Paris Agreement, and emission reductions more generally, from energy policy.  For example, the Minister for Energy, the Hon Angus Taylor MP, stated that "my first and only priority is to reduce power prices." ⁽⁴⁵⁾  However, the government remains committed to the Paris Agreement emission reduction obligations.  If emissions reductions will not be mandated in the electricity sector, emissions will need to be reduced in other sectors, such as agriculture and transport.  The government is yet to outline how the emissions reductions will be met.

Figure 4:  International Comparison of Electricity Prices

Source:  Australian Competition and Consumer Commission

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THE PARIS AGREEMENT WILL HAVE NO DISCERNIBLE IMPACT ON THE CLIMATE

The Paris Agreement will make no noticeable difference to the global climate, even if all nations meet their national emissions reduction requirements.

A 2015 research report from leading climate researchers at the Massachusetts Institute of Technology (MIT) found that:  "assuming the proposed cuts [under the Paris Agreement] are extended through 2100 but not deepened further, they result in about 0.2°C less warming by the end of the century ..." ⁽⁴⁶⁾

Similarly, Dr Bjorn Lomborg, President of the Copenhagen Consensus Centre and visiting professor at Copenhagen Business School, estimates that adopting all promises under the Paris Agreement from 2016–2030 will reduce the temperature increase in 2100 by just 0.05°C.  This would come at the cost of at least $USD1 trillion. ⁽⁴⁷⁾

Further, Australia accounts for just 1.3 per cent of global emissions from human activity.  And human activity accounts for just three per cent of total emissions. ⁽⁴⁸⁾  Even the complete deindustrialisation of the Australian economy would make no noticeable difference to the global climate.

Even Australia's Chief Scientist Alan Finkel said the complete cessation of all emissions from Australia would do "virtually nothing" to the global climate. ⁽⁴⁹⁾

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CONCLUSION

Policies to reduce greenhouse gas emissions in Australia have imposed substantial costs without delivering a discernible environmental benefit.  Rather than continuing with the Paris Agreement, Australia should focus on being a world leader in something that will make a tangible difference to people around the world, such as the provision of clean drinking water. ⁽⁵⁰⁾

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ENDNOTES

1. Abbott, Tony, "Australia's 2030 emissions reduction target", media release, (11 August 2015)

2. The Paris Agreement is included in the "Australian Treaty Series": Paris Agreement, signed 12 December 2015, [2016] ATS 24 (entered into force 9 December 2016).

3. United Nations, "Paris Agreement", (2015)

4. Ibid.

5. The Alan Jones Show, "Interview with Prime Minister Scott Morrison", 2GB, (11 September, 2018)

6. Sky News Australia, "Interview with Angus Taylor", (16 September, 2018)

7. Lane, Sabra, "Interview with Melissa Price", ABC AM, (9 October 2018)

8. Sky News Australia, "Interview with the Minister for Defence, Christopher Pyne", (3 September 2018)

9. Department of Environment, "Australia's emissions projections 2017", Australian Government, (December 2017)

10. Ibid.

11. Parry, Ian; Mylonas, Victor; Vernon, Nate, "Mitigation Policies for the Paris Agreement: An Assessment for G20 Countries", International Monetary Fund, (2018)

12. See the Climate Action Tracker.

13. Jacobs Consulting, "Report to the Independent Review into the Future Security of the National Energy Market", (21 June 2017)

14. Energy Security Board, "The National Energy Guarantee: Consultation Regulation Impact Statement", Canberra, Australia, (29 June 2018)

15. Department of the Environment and Energy, "2017 Review of Climate Change Policies", Canberra, Australia, (2017)

16. Bishop, Julie, 'Australia's 2030 emissions reduction target' Media release (11 August 2015).

17. Ibid.

18. Turnbull, Malcolm, Bishop, Julie & Frydenberg, Josh, 'Ratification of the Paris Agreement on climate change and the Doha Amendment to the Kyoto Protocol' Joint media release (10 November 2016).

19. Australian Government, 'Australia's 2030 climate change deal' (2015) .

20. Ibid.

21. Blackshield, Tony and Williams, George, "Australian Constitutional Law and Theory", The Federation Press (2010)

22. United Nations, "Paris Agreement", (2015)

23. Editorial, 'United States announces plans to withdraw from Paris Agreement on climate change' (October 2017) 111(4) The American Journal of International Law 1036-1044).

24. Department of the Environment and Energy, "Australia's 2030 climate target", Canberra, Australia, (2015)

25. The White House, "Statement by President Trump on the Paris Climate Accord", (1 June 2017).

26. See Climate Action Tracker.

27. Cass, Oren, "Testimony of Oren M. Cass before the House Committee on Science, Space, and Technology", (1 December 2015)

28. Keating, Dave, "EU tells Trump: No Paris climate deal, no free trade", Forbes, (8 February 2018),

29. See Cecilia Malmström on Twitter

30. European Parliament, "European Parliament resolution on 2 July 2018 on climate diplomacy", (2018)

31. Climate Action Network Europe, "Off Target: Ranking of EU countries' ambition and progress in fighting climate change", Brussels, Belgium, (June 2018)

32. ACCC, "Retail electricity price inquiry: final report", Canberra, Australia, (2018)

33. European Commission, "Impact assessment: Recommendation for a Council Decision authorising the opening of negotiations for a Free Trade Agreement with Australia", (2017)

34. Wood, Richard J., "Why Australia must exit the Paris Climate Agreement", Australia, (August 2018)

35. McDonald, Eewn, "Australia and the Green Climate Fund: Supporting new climate investments", speech to 4th Australasian Emissions Reduction Summit, Melbourne, Australia, (2017)

36. Kumar, Sunjay, "Green Climate Fund faces slew of criticism", Nature, (20 November 2015)

37. Tabuchi, Hiroko, "U.N climate projects, aimed at the poorest, raises red flags", New York Times, (16 November 2017)

38. Ibid.

39. Ibid.

40. Ibid.

41. Coalswarm, "Global coal planet tracker", (July 2018)

42. See Statista

43. Australian Energy Resources Assessment, "Uranium and Thorium", (2018)

44. Wood, Richard J., "Why Australia must exit the Paris Climate Agreement", Australia, (August 2018)

45. Taylor, Angus, "Speech to the National Small Business Summit, Council of Small Business Organisations Australia", Sydney, Australia, (2018)

46. Reilly, John, "Energy and Climate Outlook: Perspectives from 2015", MIT Joint Program on the Science and Policy of Global Change", MIT, United States, (2015)

47. Lomborg, Bjorn, "The impact and cost of the 2015 Paris Climate Summit, with a Focus on US policies", Chapter 15 from Marohasy, Jennifer (ed.), "Climate change the facts: 2017", Connor Court publishing, Melbourne, Australia, (2018)

48. Marohasy, Jennifer (ed), "Climate Change: The Facts 2017", Connor Court Publishing, Melbourne, Australia, (2018)

49. Quoted in Bolt, Andrew, "Climate change policies are all pain and no gain", Herald Sun, (12 July 2017)

50. Lomborg, Bjorn, "Fight tuberculosis, not climate, to save lives", The Australian, (12 October 2018)

Scott Morrison's Politics Must Have Some Policy

"Dare to be different" is an advertising slogan employed in some form or another by companies like Honda to sell cars and Apple to sell computers, and by practically anyone who's ever printed a T-shirt.

If the Liberal Party is to have any chance of winning the next federal election Prime Minister Scott Morrison must not only say he's different from Malcolm Turnbull — from the Labor Party — he must also prove it.

The first part of that task is talking about politics.  The second part is committing to policies.

On Thursday in Albury, the spiritual home of the Liberal Party, in a speech to the Menzies Research Centre, the Prime Minister delivered an unscripted speech about his personal and political philosophy.

Perhaps inevitably the speech was the proverbial curate's egg.  Some parts were outstanding, such as when he made the obvious but important point that "the best form of welfare is a job".

Other parts were trite, such as when he remarked that "as Australians, we look after our mates".

And yet other parts were trivial, such as when he foreshadowed the federal government would ban plastic food wrappings.

Other than when he talked specifically about Robert Menzies and the Liberals there wasn't a lot Morrison said that a Labor MP would disagree with.  Any Labor MP, if they'd been in the audience, would have applauded enthusiastically when Morrison said that the government would remain in the Paris agreement on climate change.

And as good as the PM's remarks are about work and welfare, until they're turned into policy they remain just words.

The point is that, although admittedly he's only been in the job two weeks, the Prime Minister has yet to establish what the main policy differences are between him and Bill Shorten.

Yesterday the PM talked of the need to create "a noble society" and "a caring society".  Whether such a society is very different from a society built on the idea of "the common good" (which is the title of Bill Shorten's book) is unclear.

SIGNIFICANT DIFFERENCE

Morrison will point to differences such as the Liberals' policy of reducing the corporate tax rate for smaller companies to 25 per cent, while Labor's policy is a tax rate for such companies of 27.5 per cent.  That is merely a distinction without much difference.

To take energy policy, for example, if Morrison announced that Australia was withdrawing from the Paris agreement in an effort to bring down household electricity prices then for the first time since the Coalition was elected in 2013 would there be a significant and easily understood policy difference on climate change between the Liberals and Labor.

If Morrison said that he supported at least an investigation into establishing a nuclear power industry in this country that would be another difference.

Under Malcolm Turnbull's leadership the Liberal Party deliberately narrowed the policy differences between it and Labor.  Liberal MPs acquiesced to the strategy partly because they thought that saying what they actually believed in would prove electorally unpopular and also because many Liberal MPs were in broad agreement with what Labor wanted to do.

If the Liberals' leadership vote between Morrison and Peter Dutton is taken as a proxy for the Liberal party room's views on climate change, about half of Liberal MPs have views more closely aligned with those of Labor MPs than with the other half of the Liberal party room.

Turnbull's approach to politics didn't only result in claims of the Liberals as "Labor-lite", it produced a mere one-seat victory at the 2016 federal election.

While it might be true that in an electoral system with compulsory voting such as we have in Australia, elections are determined by so-called "swinging" voters in the so-called "centre", it doesn't necessarily follow that the two major parties must offer identical policies to gain the support of such voters.

Nor does it follow that if a policy is popular with a political party's "base" it will therefore be unpopular with swinging voters.  John Howard's policies were supported by many more people than just rusted-on Liberals.

The Prime Minister has to be careful not to spend so much time doing politics that he forgets it's policies that ultimately make a difference to people's lives, not platitudes.