A paper delivered to the Lavoisier Group Conference, Melbourne, 11 September 2001

Australia in the Cross-Hairs

Ray Evans

On Monday July 21 last, Environment Minister Robert Hill gave an undertaking in Bonn, at the adjourned COP VI meeting of the UN FCCC membership, that Australia would pursue greenhouse policies with the objective of meeting its Kyoto target, that is, 108 per cent of 1990 levels of greenhouse gas emissions.

Whether he did this with Cabinet approval we don't know.

On the Lavoisier Website is a letter dated 31 July last from Harold Clough, our Lavoisier Group Treasurer, to Tony Nutt, who is Principal Private Secretary to the Prime Minister.

In this letter Harold Clough points out that if we extrapolate from 1999 to 2010, what has happened from 1990 to 1999, Australia will be producing 151.3 MtCO2e above our Kyoto target of 415.7 MtCO2e. This is 36.4 per cent above target.

If we are to accept Minister Hill's policy ambition, we will either have to ration carbon consumption through allocation of coupons of some kind, or we will have to impose a tax on CO2 emissions.

Rationing is out of favour with economists, and for good reason. But the critical question now becomes what sort of tax will be required to make carbon-produced energy so expensive that people will do without, simply because they cannot afford the electricity, or the petrol, which they used to consume as a matter of normal daily life. Typical estimates of the increases in electricity prices required to reduce CO2 emissions from power stations to Kyoto target levels are between 30 per cent and 60 per cent. These estimates, in my view, are conservative. The increase in petrol prices required to suppress consumption of petrol to meet the Kyoto targets will be much greater, the reason being that consumption of petrol, at least in the short term, is highly inelastic.

Ten years ago, the then Industry Commission produced a report on the Costs and Benefits of Reducing Greenhouse Gas Emissions, which concluded that the benefits would be undetectable and the costs very large and predictable. That report, although ten years old, and now generally forgotten, is still valuable for its insights and arithmetic.

On the other side of the fence, there have been a large number of papers written telling us how to minimise the pain of carbon withdrawal. Some would have us believe that there will be no pain at all. An early estimate, from the AGO, of the revenue which would flow to the government from a carbon tax of $30 per tonne of CO2 was $12 billions, and this revenue, it was suggested, could be 'recycled' in order to protect the poorer sections of the community from the depredations of the carbon tax. Presumably so they could afford to buy more electricity and petrol.

Of the various analgesics that are being prescribed to assuage the pain of a carbon tax, the painkiller which is allegedly most effective is international trade in carbon credits. Effectively, this means that we pay real dollars to governments in other countries for pieces of paper which state that less carbon is being consumed in those countries than some internationally prescribed quota allows.

I find it impossible to believe that the Australian electorate will tolerate tax imposts of the size required to meet the Kyoto targets on energy consumption. Nor will it, I believe, tolerate transfers of large sums of money to other countries, to buy 'credits' in order to keep Australian power stations generating, and cars and trucks on Australian roads. Any government which sought to impose such taxes, and give effect to such transfers, would create a political crisis for itself.

Even under conditions of strong bipartisan support for Kyoto, opportunities for new contestants in the political marketplace would be without precedent in the history of Australian politics.

In recent weeks, Prime Minister John Howard has made Australian sovereignty with respect to control of our borders, and who comes to Australia and under what circumstances, a major political issue. He has, if the polls are to be believed, received an unusual degree of public support for his position.

From the international press reaction to John Howard's handling of the Tampa issue, a reaction which has been one of almost unredeemed hostility, I think the following conclusion has to be reached. And that is that Australia's sovereignty will be increasingly challenged from abroad in the years ahead, on this issue of immigration and refugee placement.

I want to go back more than a decade to a conversation I had with a taxi driver in New York City. At that time the Berlin Wall had just been broken down and there was speculation that, in the social upheaval that was expected to follow, there would be serious food shortages in Eastern Europe and the then USSR.

The taxi driver was well aware of these concerns. 'How many people live in Australia?', he asked. I told him, 'about 17 millions'. He whistled speculatively. 'You've got a lot of land', he said, 'and a lot of food. Seventeen million people is peanuts. If you don't do something about it, someone else will.'

There can be no doubt that I was hearing, in this taxi driver, the voice of the ordinary American citizen. Similar sentiments were expressed also at that time by a person of some eminence, perhaps notoriety, in international Roman Catholic circles in a radio interview on the ABC.

This person was a Sri Lankan Catholic theologian, Father Thissa Balasuriya, from Sri Lanka.

The interview took place on the 3AR program, 'Insight', on 6 August 1989. Since that time, Fr Balasuriya has had some difficulties with the Vatican authorities. My understanding is that he faced excommunication for holding and proclaiming heterodox doctrine, but that in the end an accommodation was reached. Putting his orthodoxy to one side, Fr Balasuriya is well qualified. He holds degrees in agricultural economics from Oxford, and has studied theology in Rome and at the Sorbonne.

Father Balasuriya, came to Australia in 1989 at the invitation of the Australian Conference of Major Superiors of Catholic Religious Orders. These people are equivalent to bishops in ecclesiastical rank. There is no escape from the fact that this priest may be turbulent, but he is influential. I am going to quote extensively from the radio transcript of 6 August 1989.

The radio compere concluded his introduction as follows:

Father Balasuriya responded with these words:

It didn't take long before the compere pleaded environmental concerns in mitigation of this original sin.

Compere:

Father Balasuriya:

I have selected the highlights, rather than quoting verbatim at length from the priest's text, but there is no distortion in my selection. What I find deeply disturbing is not so much Father Balasuriya's prescriptions for our future happiness, but the compere's response, which I now quote in full:

So the reason why we should not accept 200 million immigrants from Bangladesh, India, China, (to quote the countries cited by Father Balasuriya) is not that the Australian people, as a nation, and acting politically in their national interest, may not want such an immigration, and will resist it, but that the land, the flora and fauna, would be at risk.

There are two vital matters arising from that compere's artless response. The first is the obvious point that he is setting the alleged welfare of the plants and the animals as the determining factor in migration to Australia. The second point is less obvious, but much more significant. It did not occur to our innocent ABC compere that the situation might arise when Australians, as we now understand that term, would have no decision-making capacity in this matter. In other words, he assumed our Australian sovereignty to be immutable, beyond challenge, to be taken for granted, as far ahead as we can see.

Those seemingly reasonable but most ominous words of Father Balasuriya:

'I think these things have to be looked into rationally---by a world authority'

passed over our ABC compere's head without him understanding, at all, their profound significance.

Let us jump from 1989 to 2001. Kep Enderby, former Federal Attorney-General and Justice of the NSW Supreme Court, concluded an article on the Tampa affair with these words:

What has this to do with Kyoto and the greenhouse effect?

I think it is beyond argument that Australia's population is going to increase over the next 50 years at least as much as it has in the last 50, perhaps more. That means 50 millions by 2050. The political question to which we have to respond is this: Who is going to choose these immigrants? (Most of these people will come through immigration since Australian fertility levels are barely enough to sustain us at 20 millions.) If we are going to choose them, we are going to have to do so with much greater vigour than we are doing now. And, of course, because the Kyoto targets have nothing to do with population growth, or population decline, if we combine an aggressive immigration programme with development of our resource base, which is where we are internationally very competitive, then we are not looking at the 145 per cent-or-so increase in CO2 emissions that Harold Clough wrote to Tony Nutt about, but something more substantial.

The basic conclusion of any consideration of Australia and Kyoto is that acceptance of Kyoto means the end of population growth in Australia. That must be true if an Australian government takes the Kyoto obligations seriously and continues, in office, to enforce those obligations.

Behind the arguments I have just raised about Australia, its sovereignty, and its capacity to maintain that sovereignty, is an assumption about the world political order as we move into the twenty-first century. And that assumption is that we will continue as a world of independent nation-states, practising self-government according to our political traditions and, in Australia, according to our constitution, which is the foundation of our political and legal life.

That assumption may not be well founded.

In his recent book Does America need a foreign policy?, Henry Kissinger writes (page 21):

In using the word 'Westphalian', Henry Kissinger is referring to the Treaty of Westphalia, which in 1648 re-established peace in northern and central Europe after the Thirty Years War. During that war, approximately a third of the peoples of that part of Europe perished. The Treaty of Westphalia laid the foundations for the present global polity of independent and sovereign nation-states.

Kissinger goes on to describe the various contemporary manifestations of the breaking down of the Westphalian order and then remarks (page 31):

Although Kissinger does not discuss Kyoto in the context of the attack on the Westphalian order, it is clear from comments made by the French President Jacques Chirac that, at least in Europe, they are very clear about where Kyoto can take us, and who is going to be showing the way. The occasion was the UN FCCC COP meeting at The Hague last November, where the parties failed to reach agreement on how to proceed with Kyoto.

The French President said this:

From an Australian geo-political perspective, it strains all credulity to imagine that China, for example, could ever see itself being part of the oxymoronic 'collective sovereignty' to which the French President referred, or being subservient to 'an authentic global governance'. And what can be said about China, can be said with equal force about India, and about many other Asian nations.

The United States Senate is another important political institution which will have a different view to that of the French President. But the point to be made here is that the Australian Government, through the words of the Environment Minister, and through the expenditure of many hundreds of millions of dollars on the Australian Greenhouse Office, is endorsing, implicitly or explicitly, the position of the French President.

The Kyoto Protocol, and the Australian Greenhouse Office, are a far, far greater threat to Australia's future as a sovereign nation than the asylum seekers on the Tampa. It is time the Prime Minister, and the Government, were challenged on this matter.