Centre-right thinktank warns Morrison government of 'grave future for coal exports'

Katharine Murphy Political editor
·5-min read
<span>Photograph: David Gray/Reuters</span>
Photograph: David Gray/Reuters

A centre-right thinktank with links to former Liberal ministers Robert Hill and Christopher Pyne warns failing to commit to net zero emissions by 2050 will diminish Australia’s international standing and harm our economic competitiveness.

The arguments are laid out in a new report that will be released on Friday by the Blueprint Institute. The report will be launched by the New South Wales environment minister, Matt Kean, who this week declared his party needed to better represent the interests of voters committed to climate action, and end the pointless, backward-looking arguments.

The report, called Powering the Boom, notes that Australia has committed to full decarbonisation “by some point this century”. But it says if domestic ambition isn’t increased soon, “the decision may be forced upon us”.

Related: Marise Payne declines to welcome adoption of net zero emissions target by Japan and South Korea

This week Japan pledged to cut its greenhouse gas emissions to net zero. The Blueprint Institute report notes that development and points out the United Kingdom and the European Union have also made net zero commitments, while China has pledged to reach net zero by 2060, and Canada has an economy-wide carbon price.

“Failing to commit to net zero by 2050 will diminish our international standing, and harm our competitiveness,” the report says.

But it says the mid-century commitment isn’t, of itself, enough. It notes Australia is “lagging behind our peers” with most other rich developed nations achieving much larger reductions in per-capita emissions over the past two decades.

The report says Australia should agree to meet its commitments under the Paris climate agreement without using Kyoto credits. During Senate estimates hearings this week, the Department of Foreign Affairs and Trade confirmed no other country, apart from Australia, had yet indicated its intention to use Kyoto carryover credits in order to meet its pledges under the Paris agreement.

The report says Australia can deliver that pledge if it commits to halving emissions from electricity within 10 years.

The Blueprint Institute is a relatively new thinktank drawing staff that have worked for federal Liberal MPs, including Julie Bishop and Dave Sharma, as well as policy experts. A number of board members have worked in state politics, and the strategic council of the organisation includes Hill, Pyne, former NSW Liberal parliamentarian Michael Photios and former state and federal minister Bruce Baird.

The report says there are five components of a successful decarbonisation strategy:

  • The net zero commitment and agreement to meet the Paris targets without Kyoto credits.

  • Beefing up investment in transmission infrastructure.

  • Mapping a fair transition for coal communities.

  • Further support for the commercialisation of low emissions technologies.

  • Pressing ahead with green hydrogen, steel and aluminium.

It says the coronavirus pandemic should be “a catalyst for change” rather than a barrier to progress. “Leaders in many of our peer nations and major trading partners have pledged ambitious climate action during the crisis,” it says.

Related: Industrial emissions set to rise for another decade despite Coalition's pledge to cut carbon pollution

The report says the scientific case for action is clear but there is also an economic case. It says as major trading partners accelerate their decarbonisation, Australia faces two risks – a rapid decline in demand for carbon-intensive exports, such as coal and gas, and the possible introduction of carbon tariffs.

It notes that China and Japan – two countries on the path to decarbonisation by mid-century – “together account for 52% of our coal exports and 90% of our iron-ore exports”.

“China’s declaration that it will achieve net zero by 2060 should be of particular concern to Australia,” the report says. “While this might be viewed with some scepticism, the boldness of the commitment portends a grave future for our coal exports.”

“A fall in our coal export volumes would have significant economic consequences.”

The report notes that an economy-wide carbon price, via a carbon tax or cap-and-trade system, would be the lowest-cost way to decarbonise the Australia economy, but it acknowledges this will be difficult to implement given the decade long climate wars.

It says one option for achieving a functional cap-and-trade system would be to reboot the safeguard mechanism that the Coalition implemented when it repealed the carbon price in 2014. “The system could be expanded to cover all or more companies … and the permitted emissions reduced to align with emissions reduction targets,” the report says.

The decision by Australia’s major trading partners to sign up to net zero has renewed the domestic debate about the adequacy of the Morrison government’s climate and energy policies.

The move towards net zero was raised by the British prime minister Boris Johnson during a call with Morrison on Tuesday night. According to the British readout of the conversation, Johnson raised the importance of net zero emissions, and “stressed” to Morrison that “we need bold action to address climate change, noting that the UK’s experience demonstrates that driving economic growth and reducing emissions can go hand in hand”.

Related: NSW environment minister urges end to 'pointless, backward-looking arguments' about climate action

The next day Morrison declared Australia would make its own decisions about targets and pathways. The Australian prime minister said Johnson understood the importance of national sovereignty because he had withdrawn the UK from the European Union.

The foreign minister, Marise Payne, was asked this week whether Australia welcomed the new net zero commitments by Japan and South Korea. Payne said the commitments were “acknowledged” but it was not up to Australia to welcome them.

The government said it will approach the long-term abatement challenge using “technology not taxes”. It has identified “clean” hydrogen, energy storage, “low-carbon” steel and aluminium, carbon capture and storage and soil carbon as priority technologies slated for investment as part of its technology roadmap.

But it has also not ruled out adopting a mid-century target.

Payne said on Thursday the government would set out its long-term abatement strategy before the next international climate conference, due to be held in Glasgow late next year.