IT is easy to find ways to poke fun at the EU and the tendency of its Brussels-based bureaucrats to draft detailed directives on the contents of sausages, the shape of vegetables and many other aspects of everyday life.
But when it comes to designing an emissions trading scheme in a way that protects their international competitiveness while simultaneously encouraging other countries to introduce carbon schemes that will make their mining, manufacturing and farm sectors less competitive, the Europeans are having the last laugh at our expense.
Indeed, the government’s decision to link its carbon tax with the EU’s trading scheme this week underlines just how comprehensively the Europeans have out-manoeuvred, out-negotiated and out-thought the Gillard government at the expense of our national interest.
Take the treatment of the coal sector, Australia’s second largest export.
Under the new linking arrangement, we will have the perverse situation where Australian coal producers will be paying the European carbon price equivalent while European coal producers will not.
That’s because the EU ETS does not even cover methane, the greenhouse gas (known as fugitive emissions) that is emitted during the mining of coal.
So if the government’s Treasury modelling is correct (and the carbon price is indeed $29 per tonne in 2015-16), Australian coal producers will be paying more than $1 billion annually in carbon costs. European coal producers meanwhile will not pay a single euro for their emissions. On the contrary, most of the high cost European coal producers will be receiving public subsidies.
That’s despite the fact Europe produces nearly 50 per cent more greenhouse gas emissions from the production of coal than Australia. so, courtesy of the Gillard government, Europe’s producers will gain at our expense while global emissions go up rather than down.
EU industry one, Australian industry nil.
And it is not just the coal sector that has been dudded.
“And it is not just the coal sector that has been dudded.”
Not to worry. The decadent autocrats of the EU are codifying everything, down to the icing swirls on cupcakes. It will necessarily dwarf the economy like a bonsai tree. Their economy will be frozen at 2010, while the rest of the world grows on.