Who's Responsible For Exported C02?


During the Rio+20 sustainable development summit last week, Fergus Green and Reuben Finighan from Beyond Zero Emissions called for Australia to take responsibility for the greenhouse gas emissions (GHG) it enables through its exports of fossil fuels.

Green and Finighan wrote that the Australian federal government should take a broader look at the sustainability of mining, focusing on the product, not just the process; i.e. it should consider the GHG generated by fossil fuels during their whole use cycle, not just the emissions generated during the mining process.

Green and Finighan argue that mining nations such Australia should take responsibility for the emissions caused when their exported fossil fuels are burned; assigning responsibility to the importers only makes sense in the context of an enforceable international climate change regime in which all major emitting countries were limiting their domestic emissions in line with science-based objectives.

Is this a good idea? How would we go about it?

Australia is certainly a large player in fossil fuels. We have around 9 per cent of the world’s proven coal reserves, and in 2011 were responsible for 5.8 per cent of the world’s production — down 2.2 percentage points on 2010 — making us the world’s third-largest coal producer after China and the USA.

Not needing nearly as many fossil fuels as China or the USA, we’re the world’s largest coal exporter, accounting for around 27 per cent of global trade. Including liquid natural gas (LNG) exports and accounting for currently planned projects, critics of fossil fuel exports estimate that Australian fossil fuels could be responsible for 9 per cent of global GHG emissions by 2020 — and that’s excluding any domestic emissions

If Australia takes responsibility for its exported emissions, then presumably we would need to follow the same course as for our domestic emissions and reduce them. How? The most obvious answer is, "stop exporting fossil fuels".

That’s also a poor answer, though, at least in the short to mid term. It’s probably by now common knowledge that mining products are Australia’s largest export earner, and large proportion of these are fossil fuels: as of April 2012, 27.5 per cent of our merchandise exports (by value) came from mineral fuels, lubricants, and related materials (primarily fossil fuels). 

And though the mining industry isn’t nearly as large an employer or taxpayer as they’d like us to think— employing 2.3 per cent of the Australian workforce as of this May, and paying 15 per cent of company taxes in 2009-10 — removing this revenue stream from the Australian economy would be a long and painful process.

I refer not only to the "pain" of economic transition, but also the pain the mining industry would inflict upon anyone trying to reduce their profits, and the pain Australians would go through listening to it all.

There are moral problems to consider, too. The Australian Coal Association (ACA) lists China and India as the second and fourth largest importers of Australian coal; Japan, South Korea, and Taiwan are the first, third, and fifth largest, respectively.

The ACA is not alone in expecting demand for resources from China, India, and other developing countries to increase dramatically in the next decade, which means refusing to export fossil fuels would make India or China’s transition to a first world country longer and/or more expensive. A refusal to export also smacks a little of paternalism; a "we know better" attitude where we don’t trust nations to put our resources to good use.

This may well be a path we’re willing to take. There is a precedent for refusing to export resources to countries that we consider might not use them responsibly: fuels for nuclear weapons, such as uranium. Applied to fossil fuels, one could imagine a stance where Australia refuses to export coal, etc. to countries that haven’t signed sufficient agreements on low-emissions usage.

Where the consequences of the actions we enable are severe enough — burning Australia’s fossil fuel reserves would take the world 60 per cent of the way to 2 degrees warming, write Green and Finighan — a degree of unilateral action can be justified.

Given Australia now looks like exporting uranium to India despite its refusal to sign the Nuclear non-Proliferation Treaty, though, this is a weak precedent. Nor would I envy the foreign minister who has to sell such a policy to two of the world’s largest economies.

The bigger moral problem, though, in my opinion, is a policy that would see Australia reduce our export of fossil fuels before reducing our own usage of them. For starters, our exported fuels are generally higher quality resources that are less polluting than what we use domestically; our coal exports, for example, are almost exclusively black coal, which releases significantly less GHGs than the brown coal used in Australia (especially Victoria) for power generation.

Not only that, our fossil fuels are arguably put to better use by developing countries than they would be in Australia: building infrastructure in China or India, while it may be more carbon intensive than here, will probably do more to improve the lives of their citizens than using those resources here would improve ours.

By no means do I wish to suggest that Australia should wash its hands of responsibility for the emissions of the resources we export: I welcome Green and Finighan’s call for Australian leadership on this issue. That fairly broad concept, however, involves some tricky questions, some — by no means all — of which I have raised here. I expect Green and Finighan’s upcoming report for Beyond Zero Emissions will address many of them, and I look forward more discussion of this issue in the future.

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