Australia’s negotiating position at the Rio+20 conference this week confirms that the Gillard government considers Australia’s national economic interest a secondary concern.
The conference was roundly expected to collapse in disaster as countries have radically different views on turning the rhetoric of sustainable development into action.
The expected collapse followed months of negotiations, with a text that was heavily bracketed. In diplomat-speak, brackets appear around text that cannot be agreed to.
But on the eve of the conference’s opening, Brazilian negotiators released a watered-down document expected to be adopted by the closing session tomorrow. In essence, the deal reaffirms the principles of the 1992 Rio Earth Summit.
While the headline conclusions of the Earth Summit 20 years ago were new international conventions on climate change, biodiversity and desertification, there was also a secondary conclusion.
Developing countries were happy to tackle global environmental challenges, but not at the expense of poverty alleviation. To protect their right to lift themselves out of poverty, developing nations blocked the excesses of wealthy countries wanting to impose big environmental costs on the world’s poor.
At this conference, developed countries entered the negotiating ring for round two and wanted a heavy emphasis on the “green economy” and “green growth”. Australia held a similar position. But it has been rebuffed by developing countries sceptical of the economic outcomes.
In the proposed final agreement, the “green economy” is considered “in the context of sustainable development and poverty eradication . . . and that it could provide options for policymaking but should not be a rigid set of rules”.
Developing countries smelled a policy rat. India’s Environment Minister, Jayanti Natarajan, said she did “not want trade-restrictive measures or protectionism in the name of green growth”.
The opposition of developing nations is wise and hits at the heart of the problem of green economics. Green policies require expensive taxes and regulations on industry that harm competitiveness.
Australia’s expensive carbon tax is a perfect example. As the carbon tax rate necessarily rises to drive cuts in our emissions profile, the political momentum to block or add taxes on imports that don’t carry equivalent cost will also increase.
And that can lead to green trade barriers that will undermine the economic advantages of developing countries dependent on exploiting their natural resources to grow their economies and alleviate poverty.
But the consequences don’t just fall on export-oriented developing countries. Supporting “green growth” also ignores the realities of classical economics.