Why Australia must stop exporting coal

Why get worked up about our climate responsibilities when Australia’s contribution to global emissions – around 1.5% of the total - is small?

Here is the usual reply. Australia’s domestic greenhouse gas emissions means it ranks 12th among the planet’s 195-plus nations. We are 16th in the world for domestic CO₂ emissions alone. And our per capita emissions are among the highest in the world. So our contribution to global warming is much greater than we often recognise.

But by another view Australia’s role is vastly more significant, and our climate and energy export policies are positively schizophrenic in response. Specifically, Labor’s national energy export policy undermines and overwhelms any benefits from its domestic climate policy efforts.

The UN Framework Convention on Climate Change requires nations to account for emissions produced within their borders. However this approach displaces and unjustly lessens the burden of responsibility of states, companies and consumers that sit “before” or “after” the point where those emissions are released.

As a result, consumers of imported manufactured goods and exporters of fossil fuels remain unaccountable for their roles in the co-production of emissions released at a “distance”.

“Embodied carbon” and trade in unburned fossil fuels

Some aspects of the relationship between trade and emissions are coming under increasing scrutiny. For instance, it is now widely acknowledged that approximately 25% to 33% of China’s total national emissions now result from production for export markets. These are “embodied” emissions that have largely been “displaced” to China from countries that formerly manufactured but now import these goods.

China now has a carbon tax on certain exported goods and France has proposed border adjustment taxes on imports from countries without a carbon price – both moves intended to level the playing field in traded embodied carbon.

By contrast, little attention has paid to trade in unprocessed (or unburned) fossil fuels, which shifts responsibility for emissions from fossil fuel exporting nations and companies to the middle-consumers (the states and companies involved in producing emissions using these fuels for power or manufacturing). How convenient for the beneficiaries - countries such as Australia, Canada, the Russian Federation, and Saudi Arabia.

Australia - world’s largest coal exporter

While Australia’s domestic greenhouse gas (GHG) emissions represent some 1.5% of the global total, its global carbon footprint – the total amount of carbon it pushes out into the global economy - is much bigger.

Australia is the world’s largest coal exporter. By adding emissions from exported coal to our domestic emissions, Australia’s carbon footprint trebles. Its coal exports alone currently contribute at least another 3.3% of global emissions.

In aggregate, therefore, Australia is at present the source of at least 4.8% of total global emissions. That’s without considering natural gas exports.

This alternative viewpoint underscores the importance of Greenpeace’s recent claim that proposed “mega coal mines” in Queensland’s Galilee Basin, producing for export, would be responsible for 705 million tonnes of CO₂ per year and would turn that region alone into the world’s seventh largest contributor of emissions.

Good reasons for this larger perspective

Why take this alternative view? First, such a re-framing makes visible a range of hidden but significant national responsibilities for climate change. It is a more honest calibration of the mitigation/adaptation responsibilities and burdens of specific states. Countries like Australia benefit economically from this trade – and from fuelling climate change - without acknowledging that benefit or the costs.

Second, it undermines already spurious claims that Australia’s contribution to the problem of climate change is trivial.

When its current domestic carbon dioxide emissions and its exported CO₂ emissions are combined, Australia ranks as the planet’s 6th largest emitter of CO₂ - after China, the USA, the Russian Federation, India and Indonesia. It is responsible directly and indirectly for over 1.5 billion tonnes of CO₂ per year – more than Germany’s emissions (population 82 million) and the UK’s emissions (population 62 million) combined.

If planned and projected increases in Australian coal and gas exports are realised, our carbon footprint will more than double again over the coming decades. By 2030, Australia would be directly and indirectly responsible for over 2 billion tonnes of exported GHG emissions per year.

Harm avoidance

Still, should we reduce our coal exports in a global system geared to direct-emitters’ responsibility?

Consider the principle of harm avoidance. This is a widely recognised principle, including under international law. It has been enshrined in the Stockholm Convention 1972 and the Rio Declaration of 1992.

These international declarations – to which Australia is a signatory - state that parties “have the responsibility to ensure that activities within their jurisdiction or control do not cause damage to the environment of other States”. Trade in injurious substances flies in the face of the harm avoidance principle.

By analogy, think of how most legal systems view sellers of asbestos or heroin, or of the growing reaction to the sale of tobacco.

In these cases, we are no longer prepared to buy the argument that harm is a case of “buyer beware”. Instead, we ascribe responsibility for trade in a harmful substance substantially (in the case of heroin or asbestos) or significantly (in the case of cigarette producers) to their predatory traders.

Leaving the responsibility for mitigation to others involves an abrogation of ethical responsibility to the market and to the atomised consumer. If you are not convinced by this view – think of the heroin dealer’s defence: “I do no harm, yer Honour. I only sell the stuff. They’re the ones that inject it.”

The second argument is purely pragmatic. The greater our dependency on a coal/gas export economy, the greater the economic distortions and social perils for Australia in the longer term. Australia’s export energy boom is generating an economy unsustainably dependent on the returns of that sector.

If the end to the fossil energy boom is abrupt, the trauma to Australia’s economy will be significant. How will we provide regional structural adjustment assistance in the Hunter Valley and Bowen Basin, especially if this adjustment trauma is accompanied by increasing demands for climate adaptation and disaster relief funding (think Flood Levy)?

Killing the goose?

It must seem crazy-brave to propose a tax on coal exports given falling coal prices and political anxiety about the power of the mining industry.

It must seem crazier still to propose an immediate moratorium on further expansion and to plan for the sector to be wound back. But in each case, that is what Labor should do.

Labor first should immediately freeze Australia’s expanding global carbon footprint by capping export volumes.

Second, it should simultaneously establish a carbon fund to provide for longer term structural adjustment costs domestically and for investment in energy alternatives in developing nations currently importing our fuels. Even a modest levy of $2 per tonne of exported coal would now net almost $800 million per year.

More than this, though, Australia needs a national energy strategy based on this shift in perspective. It involves reconfiguring our understanding of Australia’s very substantial international role in the climate game and winding back our fossil fuel export sector within a decade.

Ultimately change will be forced upon us, whether or not we like it, or are prepared. Even the most conservative IPCC and IEA estimates suggest that global fossil fuel use will need to contract substantially by 2050 if we are to limit global warming to 2 degrees celsius. Australia itself has adopted an emissions mitigation policy of -80% by 2050. This is less than 38 years away.

Major importers are already moving to cap and reduce their coal consumption. Our export carbon sector is clearly unsustainable if the rest of the world intends to cut fossil fuel use dramatically.

A coherent energy-climate policy would guide a rapid, planned scale-down in coal production. The chaotic alternative - the one we have now - will continue to build our coal export sector and then allow market and climate forces to combine in a perfect economic storm.

Peter Christoff does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.