The world will be asked to work together on climate. What chance that'll happen?

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The final topic at COP26 in Glasgow — to the extent that any discussion on decarbonisation can be final — is how we “work together to deliver”.

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This could, and does, mean many things.

But the framing by conference organisers is pretty instructive. As they put it, we need to “finalise the ‘Paris rulebook’”, which means we must:

  • Find a solution on carbon markets by creating a robust system of carbon credits that supports the move to net zero
  • Resolve the issues of transparency by putting in place a universal system that encourages all countries to keep to their commitments
  • Broker an agreement that drives ambition from governments over the coming years to keep 1.5 degrees alive.

For the cynics who think events like COP26 are a vacuous talkfest, these criteria provide a concrete way to measure success. Taken together the three components would mean a market-based solution to internalise the externalities caused by emissions, in a way that provides appropriate incentives for all countries to drive emissions reductions, and do so in a way that is not too late to stop irreversible warming of the planet.

Whether or not the world community can come together, let alone work together, remains to be seen. A lot will rest on what the United States and China do. The world’s indispensable superpower and its emerging rival will need to find a way to hold each other to account while maintaining stewardship of the planet.

It won’t be easy. It will no doubt require deft diplomacy. But since I am an economist not a diplomat, it would be remiss of me not to point out that it’s the economics of climate that are at the core of the world coming together.

Good intentions aren’t enough

If China can free-ride on other countries reducing emissions while it uses cheap but dirty energy, it will. And let’s not romanticise the US, either. The Biden administration has good intentions, and Biden has assembled a brilliant cabinet. But what the administration can get done is limited — to a very real degree — by folks like Democratic Senator Joe Manchin. Manchin is a shrewd negotiator and a shill for (sorry “representative of”) West Virginian mining interests. He’s already nuked Biden’s signature clean energy plan.

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Adapt and grow: Australia should grasp the positives of climate change

Rather than rely on good intentions we should instead hope for good old-fashioned competition. The US and China are locked in a race to become the preeminent green-energy superpower. This is the race that America needs to win. It is dominance in green energy that makes dominance in everything else possible.

Picture a US with abundant clean energy. That would largely resolve its fiscal and budgetary woes, much of its internal politics (both within the Democratic Party and between Democrats and Republicans), and lay the groundwork for a generation of technological innovation. That fountain of innovation is in no small part why the US won the Cold War with the former Soviet Union.

Winning the green-energy race would, if one can imagine it, be an even bigger deal for China. There’s the obvious issue of prestige and economic power. But there’s a political dimension too. We don’t see it reported much here, but the discontent over air and water pollution in China is palpable. Hundreds of millions of people who have become middle class over the past three decades are not thrilled that their kids can’t safely go out much of the time, on most days, in major cities like Beijing. It’s just not sustainable for the Chinese Communist Party not to clean up its environmental act — and sooner rather than later. But it can’t do so by cutting off economic development. Green energy is the only way to cut that Gordian knot.

Working together at home

There’s some cooperation a little closer to home that is less consequential than a generational race between China and the US — but important nonetheless. And that is ending the climate wars in Australia.

I’ve read a lot about News Corp’s version of the “switch in time that saved nine”, apparently called “mission zero”. So far it has been a lot more “zero” than “mission”. And I’m not the only one to notice not everyone in the News Corp stable is on board. Chris Kenny got one thing right amid a barrage of Flintstonian observations this weekend. Or at least some subeditor did, giving his column the title “Climate policy is tearing us apart”.

I’d put it slightly differently. Climate politics has been tearing us apart as a nation since Kevin Rudd became prime minister. We’ve had more than a decade of crappy policies, political instability, and politicians — aided and abetted by certain members of the fourth estate — using climate change to divide us, to pit one group of Australians against another.

That’s got to stop, and it’s got to stop now. If Scott Morrison gets a deal to embrace net zero by 2050, plus meaningful increases in 2030 targets — whatever pile of pork Barnaby Joyce and Bridget McKenzie manage to extract — then we should all support it. The government’s success on climate is our success on climate. The Greens and Labor should get on board. And the conservative commentariat should learn how to lose gracefully. 

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