Sept. 1, 2021

Ep52: Tony Abbott 'Green Trade or Green Trade-Off'

Tony Abbott was the Australian PM between 2013 and 2015, the leader of the Liberal Party between 2009 and 2015 and an MP for Warringah between 1994 and 2019. He currently serves as an advisor to the UK Board of Trade alongside Michael.
During his time in office he repealed Australia’s carbon tax and finalized trade deals with China, Japan and Korea. Tony Abbott was also Health Minister between 2003 and 2007.
Prior to entering parliament, he was a journalist with The Australian, a senior adviser to opposition leader John Hewson, and director of Australians for Constitutional Monarchy. He has degrees in economics and law from Sydney University and in politics and philosophy from Oxford which he attended as a Rhodes Scholar.

Further reading:

Official bio:

Board of Trade report: green trade


Click here for Edited Highlights

Michael Liebreich:  Before we start, if you're enjoying these conversations, please make sure that you like or subscribe to Cleaning Up, it really helps other people to find us. Cleaning Up is brought to you by the Liebreich Foundation and the Gilardini Foundation. Hello, I'm Michael Liebreich, and this is Cleaning Up. We're starting season four a week early, with a special edition that we're filming here on a beautiful sunny day in the Swiss Alps. My guest today is the Right Honorable Tony Abbott, Prime Minister of Australia between 2013 and 2015, and who now serves alongside me as an advisor to the UK Board of Trade. Let's bring Tony Abbott into the conversation. So, Tony, welcome to Cleaning Up.


Tony Abbott: Michael, thanks for having me. It's wonderful to be here from locked down Sydney, Australia.


ML: Well, yes, you are you are suffering at the moment, are you not?


TA: Look, we started this whole pandemic very well, because we closed our borders early. We had very few cases, we got almost to a position of COVID zero, we almost eliminated the virus we had to very tightly shut our borders to do that. But for many months, we were living a relatively free life watching people in Europe and the United States and many parts of Asia suffering. But it seems that the Delta variant is too smart for us. It's escaped into the community. And the lockdowns are causing enormous economic and psychic pain. But so far, at least they don't appear to have much arrested the virus. So that's the position that we're in right now.


ML: I'm, as you can see, I'm here in Switzerland at the moment, but the UK, you know, seems to have done a good job on the vaccinations. And at the end of the day, I think the vaccination is really the only way out of this, this terrible situation.


TA: Look, it seems you're right, Michael, we've worked ourselves up into such an understandable climate of fear and anxiety about COVID. We need some kind of a formula out. Vaccination is the formula out, good on Boris Johnson, for seeing that early on and getting Britain vaccinated at very high levels, at absolute warp speed, good on him. Good for having the courage to open the place up on July 19th, despite the fact that there were still high case levels, because while there were plenty of infections, there were far fewer hospitalizations, and deaths. And in the end, we just have to get on with life. And that's what's happening in Britain and large parts of Europe. And let's hope in addition with getting on with life domestically, we can get on with life internationally as quickly as possible.


ML: Well, and so you and I serve together as advisors to the UK Board of Trade. And we've managed to have one face to face meeting just a month ago in Glasgow. And we finally met after numerous calls like this. And so, you know, I want to get on and talk principally about trade and the green trade report that you and I sort of working shoulder to shoulder on as it turned out. Before we do that, though, the other thing that's going on in London at the moment is two weeks of protests by Extinction Rebellion, they're trying to bring the city to a stop, what would you say to them if you had the chance?


TA: Well, look, I just think that these sorts of things are very counterproductive. We all know that some people want stronger action on climate change. Some people think that the action we're already taking on climate change is doing more harm than good. We understand that they are completely committed to the cause. But I just don't think they're going to do any good other than annoy a lot of people and in the end, discredit the cause that they believe in so passionately.


ML: And you know, there is a link here back to trade, because I think it's fair to say that a lot of the people on that side of the climate movement that you know, they it may be, you know, there will be exceptions, and I probably shouldn't try and speak for them. I'm not actually very good at that. But they would say that trade and globalization lies at the heart of the climate problem and obviously you and I would probably disagree with that. What is the role of trade? And let's take on the trade question, What does trade do? Why are we so in favour of it?


TA: Well, trade increases wealth, Michael. And the wealthier you are, the better environmental steward, you can inevitably and invariably afford to be. I mean, look at the countries that really are ravaging their environment. They're invariably the poorest countries or the countries that are in the earliest stages of industrialization. They're the countries which cut down their forests, that pollute their rivers, that pour chemicals into the sky and into the ocean. The richer you are, the more you can use technology, to continue to be wealthy without being environmental vandals. And if you look at Britain and Australia to take two examples that obviously we're familiar with - air quality today, much better than a couple of decades ago, water quality, much better than a couple of decades ago, land management practices much better than a couple of decades ago, the use of chemicals, both in industry, and in agriculture, much better than just a couple of decades ago. And this has all come because greater wealth means better ways of doing things. And it also means that we can afford to invest in environmental protection. So, the last thing any serious environmentalist should be doing is getting in the way of wealth creation, because wealth creation is the key to a better environment. Now, my fear is a lot of the people associated with Extinction Rebellion, in the end, think the real problem is humanity. They don't like their fellow human beings that much. They see human beings is a bit of an important pest in a pristine world. And I just don't share that view. In the end, I think they have a very theological view of these things. And I don't happen to share their particular faith.


ML: But it's very clear that the wealthier countries are, you know, over the hump, they're already reducing their carbon emissions. they've improved the environment on the kind of local pollutants, the air quality, the water quality actually improving. But even when it comes to CO2 emissions, it’s the OECD, that has peaked 15 years ago in terms of production of greenhouse gases. And even when you use consumption emission figures, so accounting for deindustrialization, the peak was around 2013 or so. So more recent, but still nearly a decade. And you're an economist, there's a thing called the Kuznets Curve. So that's what we're talking about here, where you go over the hump, and you start getting better. But how would you respond to those who say, yeah, but if you look at the environmental problems in, for instance, Nigeria, you know, in the Ogoni Delta, you look at an Ecuador, the pollution in the forest. So, you look at some of that pillage of the environment in the lesser developed, in the poorer countries has actually been caused by, if you like, trade, but when their own institutions were not able to protect their own environments. And so how do you answer that?


TA: Well, in that sense, it's a fair point. I mean, I can understand that. If you're a serious environmentalist, you don't want to see the rainforests of Southeast Asia cleared for palm oil plantations, for instance. And yet there is a market for palm oil in a way that there's not necessarily for the products of pristine rainforest. So, look, I'm not saying there's nothing in that particular critique. But the problem is to try to ensure that you've got better governance in these countries, rather than to shut down trade. And the way forward is for the countries that are importing those products, perhaps to have their own standards, which mean that they are responsibly harvested as opposed to irresponsibly harvested. And I think that, again, if you say to another country, well, we're not going to take your product, particularly when that product is an important part of their own economic advancement as they see it. You're just going to create bad blood all around if you say to a country, look we want to work with you to improve your environmental standards over time. I think that's a very different circumstance. And, and I think that science and goodwill are the ways to go forward here rather than theology and recrimination.


ML: Okay, but you do accept that it is appropriate for a country to say, I don't like the way you're managing your rainforests. I don't like the environmental protection for the workers in your rare earths factories, you know, maybe in China or somewhere like that. And therefore, we're going to not import until you do X, Y, and Z. Is that an appropriate thing for countries that… does a country legitimately do that?


TA: I think I know where this is going, Michael.


ML: I suspect you do, yes.

TA: Up to a point, yes. The question is, how far do you take that point? Now, the last thing I would like is to see even further clear felling of rainforests. I mean, rainforests are the Earth's lungs, they're a very important part of the planetary ecosystem, we need to preserve them to the absolute maximum extent possible. Now, you might say, well, what about a country like Britain, which has cut its emissions by I think something like 50% over the last few decades, compared to a country like Australia, which has only cut its emissions by something like 15%, or a country like New Zealand, which actually has hardly cut its emissions at all. Can Britain start imposing carbon border adjustments, and so on, on Australia and New Zealand in an attempt to force us to cut our emissions harder and faster? Well, look, I suppose then it becomes a question of what are your environmental priorities. Now, while I think it's important to get emissions down as far and as fast as we can, personally, my kind of conservationism, is probably more worried about the rapid devastation of the Earth's rainforests, than it is about modest increases in carbon dioxide accepting that if you could, you’d protect everything.


ML: In fact, I wasn't going to rush ahead to carbon border adjustments, right, I was actually going… The direction I was going was more, you know, that as somebody who has signed free trade agreements, you did Korea, Japan, and China. And it was more that, you know, in principle, if a country has gotten… and I wasn’t going to carbon yet I was really, you know, it was also around rainforests or around other environmental or, in fact, you know, human rights or workforce conditions, concerns. You know, once we say, okay, that we have a legitimate concern as an importing country, then I was actually going to ask: where do you lodge that? Where do you where do you put that into, into every free trade agreement? Do you pursue that at the WTO? Or do you say, oh, no, that's about food regulation, or that's about industrial standards, or we just do that somewhere else? And if that's the answer, isn't that a risk that it just doesn't get done?


TA: Yeah, yep. I hear that, Michael. And yes, I think that the answer is to… if we're gonna have bilateral free trade agreements, I think we can also have bilateral conversations about various other things as well. But if we try to make the trade agreements critically hinge on our trading partners adopting exactly the same standards that we have, we might find that we never get any trade agreements. Now, I don't think there is a real issue. When you're talking about say Britain and Australia. Given that our environmental standards, our animal welfare standards, our labor standards, our human rights standards are very comparable, even if they're not absolutely identical or environmental standards generally. I think it does become an issue if you are talking to say a country like India. It's not realistic to have identical labour standards between Australia and India. It's not realistic to have identical OH&S standards between Australia and India. What we should do is to try to use the carrot of a stronger economic partnership to encourage our trading partners to steadily lift their standards, without, as it were, removing any comparative economic advantage that they might have. And I think that's the danger. When you try to load up trade deals with all these other things, you will end up destroying what comparative economic advantage, some of these poorer countries have. Now, look at Japan, from the middle of the 19th century, to today, look at Korea, from the 1960s to today or Taiwan from the 1970s to today or, or Singapore from the 1960s to today, all of those countries have gone up, particularly Korea and Taiwan and Singapore, they've gone from grinding poverty, real Third World standards to in some cases, better than First World standard, average standards, through trade essentially. And, of course, the environmental work that you can do in places like South Korea and Taiwan, the environmental standards you're going to uphold and maintain in these countries, Singapore, and so on, just so much better than in countries that haven't been able to get wealthy through trade. So again, I just think we can't be theological here. We've got to be practical. And people of goodwill want their lives to be better. They want other people's lives to be better. And let's sit down and talk these things through. But let's not see trade as the enemy of progress. Let's see trade as the best friend of progress, including environmental progress.


ML: Very good. And you know, when you say, let's not be theological, and that's your trump card, because you studied theology, and I haven't so I have to concede the point there. And I think I think in general, you know, I agree, you know, if you look at the balance sheet of what trade achieves in terms of bringing, you know, the examples you gave, I was in, I was in Seoul in the 1990s, you couldn't see that it was surrounded by beautiful mountains, and now they've got a river runs through it. And they're remediating their environment because they're wealthy. I guess the concern about that sort of almost a laissez faire approach is that, you know, what happens if unique biomes are destroyed? And I'm thinking of, you know, obviously, the Amazon and in Australia the Great Barrier Reef, you know, which, obviously, you know, those are not under threat from that same economic development. The Amazon, you could argue, well, you know, do we just sort of say, look, you know, Brazil needs to get wealthy, the people who live in the Amazon need to get wealthy, and then they'll look after it. But what happens if it is no longer intact?


TA: Look, I'm not especially familiar with the predicament of Brazil, although I do know that it is certainly a strongly developing country. But if you take the Barrier Reef, for instance, which I am reasonably familiar with Michael, the Barrier Reef is most endangered by agricultural runoff, and water quality. That's the big problem in the Barrier Reef. Over the last 20 or 30 years, we have made massive, massive improvements there. Water quality, particularly on the inner reef, has not been better in 70 or 80 years than it is now. Now, yes, there's the threat from storms. Yes, there's the issue of bleaching. And yes, I suppose if there were rapid climate change, that would pose problems as well. But there's a lot of gloom and doom about the Barrier Reef, which just isn't justified. And the fact that Australia was able to persuade the relevant World Heritage Committee, not to list the barrier reef as endangered just the other day shows that even though there were plenty of people urging the Heritage Committee to do just that, we were able to present absolutely persuasive and convincing evidence that it wasn't justified.


ML: I guess, you know, that we worked on the Green Trade Report, and there was a lot of agreement, I think, I suspect more agreement than then perhaps either of us expected going into that. And we've ended up with a report that I feel very proud of. I think it's a good report.


TA: I agree, Michael, I think it is a good report. And one of the things that I really admired about your contribution to that report was the intellectual integrity that you brought to it. There were some alarming statistics in one of the early drafts that you were good enough to say, Look, I know it’s sad, but it doesn't really stand up. And, and it takes guts to do as it were, take on your own side, almost. And that's what you were prepared to do and look, I had to accept a few things as you did, and I think we came up with the report, which does make a very strong case for trade, particularly a case for trade that will be of very substantial net environmental benefit.


ML: And it's funny, because, you know, when you say my side, I actually am quite sort of well-known amongst the more, you know, the climate activist community for being the awkward squad, because I constantly do push back against those exaggerations, and, you know, I can't, it would be inappropriate to report because it was a draft. And obviously, we're working in confidence here. But there were, there were some claims, which are oft repeated that I push back on, and I say those are not science based. And so I thank you for noting that I you know, I'm just as robust in hopefully in both directions.


TA: And, Michael, look, people have integrity, whether they're of the left of the right, whether they're sort of more green or less green. I mean, people of integrity are always, in a sense, awkward, because the important thing is the truth. Now we can disagree about what the truth might be. But it's very hard to disagree with facts, and in the end a fact is a fact is a fact. And we cannot ignore facts just because in the short term, they don't see their argument.


ML: Right. And I think, you know, if I were to be so bold, the one area where we did, where we don't see things the same way is the need for urgent action on climate. And part of the problem there is that there's a whole bunch of facts. But then also, there's a whole bunch of what happens next, just in the same way that you know, if you're designing an aircraft, you can sort of you can get the facts about each material and each component, but at the end of the day, there is also you got to, you know, you've got to go and fly it, you model it and you figure out what its envelope is. And I suppose I have spent so much of the last 20 years of my life. And I mean, I have a science background, that I am concerned, not about imminent, you know all this kind of civilization about to collapse that that now those folks on the streets in London for all they may be well meaning and for all, you know, for all that I respect their earnestness, very often they are portraying a picture of an imminent collapse, the collapse of civilization, which the science does not bear out. And I had a very good speaker on cleaning up Johan Rockström, who's the great planetary science systems guy saying that the really bad stuff is in centuries, not in decades, but in centuries. But I my problem is, I still feel I'm obliged to act, even if it's a threat that grows in, you know, 20, 30, 40 years and out to 200, 300, 400 years. If it's a really serious existential threat, then I believe our generation has an obligation, you know, to act with an urgency that I think it's probably fair to say that you're, you know, you're let's put it this way, you know, I'll say you're still on the fence over, I'll give you credit…. I'll give you the benefit of the doubt.


TA: Well, thank you, Michael, look, some facts are hard to establish conclusively, and the precise extent to which temperature has changed over the last century and the precise causation, I think things that we can legitimately argue. I absolutely accept that all other things being equal, an increase in atmospheric carbon dioxide, will tend to warm the planet. I absolutely accept that. And I also accept that thanks to human activity, largely to human activity atmospheric carbon dioxide is increased from about 300 parts per million a century ago to about 400 parts per million now, and without appropriate action, it will probably go up to 500 parts per million in the next 30 or 40 years, maybe sooner. And yes, by historical standards, this is a rapid… It's a small percentage, but it's a rapid increase in that small percentage. And I accept that that could have consequences that we would much prefer to avoid. I absolutely accept that. I guess the other question now is, how much are we prepared to pay in order to reduce man’s emissions very quickly, as opposed to a little more moderately, and what sort of adjustments in the global economic pecking order are we prepared to accept, given that we're being called upon as the currently developed nations to do the heavy lifting, as opposed to countries like China, which are less developed in some ways, but which are very developed and quite ominously developed in other ways, and which are by far the largest source of additional emissions right now.


ML: And there's a lot in there. And, you know, there's just one bit of context, you know, out there, you can't see it, because of the lighting on the, you know, on my camera, it’s not professionally lit, I apologize. But there is a little glacier here. Actually, that's an interesting one. If I just lean back there, you'll be able to see it.


TA: I can, yeah,


ML: You see the little glacier here, up there. And that is over the last decade, since I've had this, you know, the privilege of spending some time here that is visibly smaller. And that's the water supply for the village. And that's, you know, certainly, there are real costs, they are quite immediate costs. I was also on the board of Transport for London, you know, having to adjust London's infrastructure for even, you know, 10 centimeters more of storm surge can end up being extremely expensive. So, adaptation has real costs as well. But I think, you know, I think those things are becoming more and more, you know, clear and, and quantified. If I could, I want to go in a slightly different direction, which is, you talked about, you know, China, and India is growing its emissions very rapidly. And that's where the real challenge is, because those are, you know, the populations are hugely more than Australia, or the UK or the EU. And really, the challenge is actually about how to get those countries and Indonesia and Malaysia, and Iran and Brazil, the big developing countries, the huge ones, to leapfrog rather than go down the route that we all went of building coal, benefiting enormously from the coal and then becoming wealthy enough to say, Well, actually, we'll, we'll switch off this, how do we… Because, you know, I don't think it's appropriate to say, well, we'll just kind of wait and hope that they get it and hope that there's not too much damage, and that the glacier and the storm surge and the fires and the whatever aren't too bad. How do we use our influence?


TA: Well, that's a very good question, Michael. And after I'd been in Britain for the Board of Trade, I actually went to India for a week, because Australia wants to kickstart its free trade talks with India and I was using my good officers there to try to bring just that about. But it was very interesting. Indian cities like many other developing countries’ cities, have got a shocking air pollution problem, the air pollution problem you observed in Seoul in the 90s. And a lot of that is they're driving old diesel trucks. And they're getting about on two stroke, motor scooters and things. Now, one of the things that the Indians are very, very keen to do is to electrify their transport system as quickly as possible. And interestingly, electric scooters and electric bikes have, in a sense, a much more immediate transformational potential than electric cars because you don't have to have these huge charging stations for electric bikes, you can just take the bike battery out and plug it into the kitchen, unlike a car battery, and it will charge up overnight from normal mains as opposed to needing superchargers and so on. So, India is very keen to electrify its vehicles starting with scooters as quickly as possible. But if they're going to do that, they're going to need very large suppliers of lithium and cobalt. And Australia potentially, is a very significant exporter of strategic minerals, critical minerals to countries like India, and given that a lot of countries will be wanting to reduce any dependency they might have on China. Trade between Australia and countries like India is going to be an important part of greening up their economies and their societies.


ML: And this is one of the things in the Green Trade Report that I was very keen, I pushed for very hard, this free trade in environmental goods and services. You know, because that, you know, those electric scooters, they're going to use minerals from Australia, they're going to use technology from the US, from Europe, that is, you can’t build an electric vehicle without a global supply chain. And I wonder, is it fair to say that the weather is changing a little bit in Australia in one sense, I don’t mean the physical weather, but in the sense of seeing the huge opportunities that a global shift to a cleaner energy and transportation system would imply, from maybe, you know, your time in office 5, 10 years ago, it was really it feels like seen as a threat, but now much more understanding the opportunity, is that fair characterization?


TA: Look, I think that's a fair point, Michael, but I’ve got to say, I mean, at the moment, we are still very much focused on things like more renewable energy. And nearly all of the wind turbines and solar panels that are being installed in Australia are imported from China. Okay. That's trade, which is helping us to transition our energy generation. But I'd like to think that over time, this can be a trade where we give as well as receive so to speak, where we're making more of an active contribution, being less passive as it were. And look, if we really are going to move very substantially to renewable power, we really do need a battery revolution, and lithium and cobalt, are going to be critical. And there's no doubt Australia can be a much larger part of that particular supply chain than we currently are.


ML: The funny thing is, all of those Chinese panels that you're importing are based on Australian technology, you have Professor Martin Green, one of the absolutely, you know, heroes of clean energy and environmental and whatever you want to call in. And he has produced just a steady stream of research and researchers, including many of them Chinese, who then went back and created these extraordinary companies that are now flooding the world with cheap solar panels.


TA: You're absolutely right, Michael, and I can remember, in my early days as a Member of Parliament, we were producing solar panels in this country, very successfully on a very small scale. But as with so much else, it went offshore, because we could never quite manage scale.


ML: At that time, there was also a huge push or a core push, maybe I don't know if huge is the right word, but, you know, to increase the exports of fossil fuels, coal and natural gas, you know, huge discussions about subsidizing rail lines so that it could be more coal exports to India and so on. And then these industries that are the future of the export, these are gonna be the export staples, the clean hydrogen that Andrew Forrest talks about, the clean electricity that Mike Cannon-Brookes talks about the clean minerals that BHP Billiton talks about. Those were not prioritized in the same way.


TA: Yeah, but let's not forget, Michael, that our coal was developed for an export market. Our gas was developed for an export market. It wasn't that we were so much pushing them on the world. It was that the world was coming to us and saying, We want them from you. I don’t buy this line that we're massively subsidizing the coal sector. I've looked as carefully as I can at this, admittedly from a non-expert perspective, and the coal industry in Australia doesn't get any tax concessions other than those that are generally available across the board. So sure, the coal industry gets the diesel fuel rebate, because the diesel excise is designed to help fund roads and if you're not using your diesel equipment on roads, you shouldn't have to pay the excise. So, they get the rebate, but so do farmers, so does any business that's running off road vehicles it gets it gets this particular rebate. Now, some people say, oh, this is a multibillion dollar subsidy, or hundreds of millions of dollars of subsidy for coal. Well, I think it's only by taking a pretty eccentric view of subsidy can you come to that position, and it's a very, very long time since a government has subsidized the building of a railway line to serve as an export resource industry. The most recent railway line that's been built in Australia was the line to my namesake settlement, Abbott Point, Michael, from the Adani mine in Central Queensland. But that was built without any subsidy from government.


ML: Sorry, I just had to mute there because we've got a helicopter, doing some heavily fossil fuel intensive forestry work here in this beautiful Swiss valley.


TA: Even fossil fuels can sometimes be used for environmental purposes.


ML: Well, and then I suspect that that will be replaced by an electrically powered drone at some point due to the fearsome power of innovation that I'm such a passionate believer in. I want to talk about resilience of those supply chains. And you've sort of raised this because we've skirted around, we've talked about the solar panels coming from China, we've talked about Australia's lithium and cobalt, but actually, Australia is known already to have the sixth biggest reserves of rare earths in in the world. How do you think we should be thinking about we I mean, the, you know, the OECD countries, the developed countries, and particularly I think the liberal democracies, how should we be thinking about resilience? Because on the one hand, you can't do these things which are so important for climate change cheaply unless we have global supply chains. But global supply chains bring us into dependence on illiberal countries, and obviously the biggest and most significant one - China.


TA: Again, Michael, it's an incredibly important question. Now, I don't claim to be any great expert on this. I'm just going on what I've read and what I've been told by people who know a lot more about it than I do. But my understanding is that the Australian rare earth manufacturer, Lynas, has only survived over the last decade or so because of a significant subvention effectively from the Japanese government, which didn't want it to go out of business in the face of predatory pricing from its Chinese commercial rivals. Now, I think it's incredibly important that we distinguish between free and fair trade, between countries and economies which adhere to the rule of law and operate in accordance with ordinary market standards under the law, and countries which don't, and China obviously has not just stolen a lot of intellectual property over the years. But it's used a whole range of various state subsidies and so on, to try to corner the market in critical areas of technology. I suspect that when the economic history of Huawei comes to be written, it will transpire that it was receiving massive hidden subsidies from the Chinese government to achieve such a dominant position in telecommunications that it did, certainly it did. Well, it emasculated, if not actually destroyed, many of its rivals and including through what I think in retrospect were misguided decisions by large companies in countries like Britain and Australia. I mean, I understand that it was, in fact British Telecom that made decisions about who was going to supply most of their infrastructure at earliest stages of the development of the telecommunications network which was critical in destroying or at least badly damaging Motorola which was once a giant in this field.


ML: And in the area of rare earths, you talked about predatory pricing. There is also predatory environmental conditions where the pollution as the local pollutions that are caused by processing these rare earths enormously shortened lives and rendered, you know, river systems incredibly polluted. But again, that's going to come back to the question of what if you want to stop that, do you do that in a trade deal? Or do you do that somewhere else? So it comes back to this very thorny problem, which we sort of opened up in the green trade report.


TA: Which I suspect Michael, might be one of those problems, which is impossible to resolve in theory. But it might be possible to resolve in practice, if you try to have an across-the-board rule, it won't work. But if you try to do things, maybe this way, in one deal, and another way, in a different deal, always with the objective of trying to make the whole world better for the environment, better for the well-being of workers, and better for the overall prosperity of everyone.


ML: And I think that's a fascinating challenge. And it's one that, you know, I'm looking forward to the forward-looking sort of work programme at the Board of Trade, because the WTO doesn't like it, you know, it is a system of law. And it's very difficult to do to say, well, you know, we're going to turn a blind eye because we like that country. But we're not going to turn a blind eye because we think that the other country has got some aspirations and it's actually threatening. I see challenges there. But as I say, I don't have I don't think either of us have got… there is no single, easy answer theoretically, but I want to just if I might…



TA: The beauty, Michael, if I may, I mean, as you know, I'm an incorrigible anglophile. And maybe I'm going to betray myself with this observation. One of the reasons why Britain has been so successful over the centuries is because it's adopted the common rule, the common law system, as opposed to the Roman law system. So much has been left to the common sense and wisdom, of decent people, looking at all the circumstances. Now, the modern tendency is to try to codify everything. But I'm far from convinced that trying to codify everything actually works, I think there's a hell of a lot that we've just got to leave to the wisdom of good people in the circumstances in which they find themselves, rather than try to put them into some kind of universal straitjacket…


ML: Well, we could have a whole conversation about something called the EU Taxonomy for Sustainable Finance, which is literally a list of things that you're allowed to do to be called sustainable. And of course, like any list, the moment, you see the list, you can find, you can punch holes in it. And you're allowed to do dirty things if they enable clean things. And then the clean things that you thought were clean, it turns out that if you do them in certain situations are not clean. And then of course, they don't want to include nuclear because the Germanic countries are very anti and of course, France wants it in and it's a political settlement, it is not science based. But just while we're talking about that resilience, pilots want to go back to one country in particular, and that's Taiwan, we are right now suffering from a shortage of chips, we, the economy, the global economy, the electric car transition, which is going to be such a big part of cleaning up some of these problems. And we've got a problem with chips. And that is an area where there are certain types of chips, where Taiwan has huge market shares, 80%, 90% market shares. And I very much worry that for all of the goodwill of everybody from you, me and even the protesters in London, that reality might have a way of intervening in a very, very unpredictable and unpleasant way. Am I wrong to be concerned?


TA: Look, I think that the greatest…the most immediate challenge we face as a world is possible imminent Chinese aggression against Taiwan. I think that there's little doubt that Xi Jinping is determined to complete Mao's work as he sees it. He's taken a big step towards that goal by sucking the freedom out of Hong Kong and the commercial vitality ultimately out of Hong Kong. And now I think he's very much turning his attention to Taiwan. I suspect that what's happened in Afghanistan over the last week or so would have further emboldened the military planners in Beijing to think that they might be able to get away with a lot more, a lot more quickly than they previously thought. So, I think this is quite a perilous time. And I know we're going miles off the subject of trade and, and the environment but I think it's very important for the friends of freedom and democracy, the friends of prosperity and human rights, to look very long and hard at this situation, and really to put our heads together collectively to try to work out what needs to be done to minimize any cross-strait adventurism by Beijing. And I think, frankly, the only way that's going to be done is if countries like the Five Eyes and their other allies are able to say to Beijing, look, we accept that one day, you want to see Taiwan part of the one Greater China. But if it's going to happen, it's got to happen by consent, it can't happen by coercion. And any attempt to coerce the people of Taiwan will be met with very serious consequences. So, you cannot expect to get away with this. I think the only language that the Beijing regime appreciates is a language of strength. But I think that's what we need to see a bit more off from the West in coming months.


ML: Very, very serious and very sobering.. We've got a few minutes left, just a few minutes. And you and I just recently met in Glasgow, obviously Glasgow, COP 26. I don't know whether you're planning to attend. I will be doing all sorts of things there. You'd be very welcome to join some of the activities I've got planned. I'm actually renting a country house. I call it a castle, but it's a country house with a consortium. And we'll be hosting discussions, which I think you know, me well enough will not be the entirely sort of happy-clappy discussions. They are the difficult ones. You'd be welcome to join us there. But I don't know if you're planning to come to COP 26.


TA: Well, Michael, look at the short answer is, if I were to go I'd have to go back into hotel prison for a fortnight. And I'm just not sure how many episodes of hotel prison I can cope with between now and Christmas. I'm not saying no, but at this stage, I'm not saying yes, either. But I absolutely do accept that any discussions which you are hosting and moderating will be discussions that will be well worth listening to.


ML: Very good. Well, we'll see if you do plan to come over, we'll definitely invite you out there. But obviously, you know, the eyes of the world are going to be on COP 26 and they are going to be on Australia, are they not? You know, Australia, I think it's fair to say broadly perceived as having got a bit of a free ride during the whole, you know, Kyoto period. Paris, of course, it's all about voluntary, nationally determined contributions. You know, do you think we're going to see a big move from Australia to say: it's inevitable, it's in our interest because of the minerals, because of the exports. We're going to lean in and go for net zero 2050. Do you think that's on the cards or not?


TA: I wouldn't expect it Michael, I quite like the formula that Prime Minister Scott Morrison has adopted, which is that we will get our emissions down as far and as fast as possible. And if you do look at Australia's record, we have got emissions down by 15% on 2005 levels. And we've done it despite not having a carbon tax for most of that period. In fact I was the person who abolished the carbon tax that we did have for couple of years in Australia. But you can get emissions down quite substantially without mandations and without heavy new taxes. I think part of the problem is that because Australia has been better at the practicalities than at the pontificating we’re seen as an emissions bad guy. Whereas countries like Canada and New Zealand, which have got not nearly the record that we've got when it comes to actually reducing emissions, because they talk the talk, even if they don't walk the walk, they’re the ones that have got off lightly. Now, you know, I don't want to sound too critical of my trans-Tasman siblings, or our cousins across the Pacific. But nevertheless, when it comes to who really are the people who are cutting emissions as opposed to just talking about cutting emissions, please judge Australia by its record.


ML: Well, you know, you've just criticized two of the Five Eyes that you need for that robust response that you were just talking about there.


TA: It ought to be possible, Michael, for the best of friends, to be able to engage right in a robust discussion, while at the same time then be able to unite around a mutually beneficial indeed, global intervention.


ML: I'm sure we will be able to do that. But let me push back and say Australia's emissions reductions have come from land use and waste and early on in sort of the last century or the closing decades of the last century from deindustrialization. They've come a little bit from the electrical system. But that's mainly because of recent switches into wind and solar, but they're very modest. They're not 15% reductions. You know, in fact, if you look at the non-land use, it's been pretty much flat, it went down a bit when there was the carbon tax, then it bounced back then it went down a bit more recently, but it's basically not really going anywhere.


TA: Look, I'm dependent upon the official figures here that the Australian Government publishes and the figures that we've been publishing and I wasn't aware that they were subject to expert assault.


ML:  But they include land use. I use only official things, but this is the land use figures are positive, there is a trend, but if you if you exclude those, it's not on track for 2050. I mean, it's not coming down like the UK, the US or like Japan or some of the other OECD countries that are doing very well.


TA: But Michael, if better land use is actually reducing emissions, surely, that's a good thing. Why are we only allowed to reduce emissions by closing coal fired power stations as opposed to better agricultural practices?


ML: Absolutely. I give full credit and the problem we're going to have, though, is that what we really need is agriculture, not just to reduce its emissions, but to start absorbing carbon because things like aviation or cement production, where inevitably, we need to emit for many, many decades.


TA: One of the things that my government did do was establish the Emissions Reduction Fund, which amongst other things, indeed, principally in many respects was to help to fund large scale tree planting and other programmes which acted as carbon sinks. But just on the subject of the New Zealand and again, I don't want to be too critical of our trans-Tasman siblings. But I mean, New Zealand is only getting to net zero by excluding agriculture, which is their largest source of emissions by far.


ML: When I went to New Zealand, I spent a week there. And I found out to my astonishment, that 10% of New Zealand's carbon footprint is actually drying milk powder using coal largely for the Chinese market. And a journalist asked me what I had learned that was surprising and I said, well, you know, this, this is what's happening and you know, it's insane. It's ridiculous. And the headlines the next day where UK climate expert says, milk powder production with coal is insane. The company responsible, the co-op responsible very quickly had to issue a statement saying they would stop doing that by 2050.


TA: Well, there you are. That's the power of the power of persuasion and moral-suasion if you like Michael.


ML: Very good, and, and I am sure that you'll be somewhat pleased that it won't be you in Glasgow, being sort of subject to that suasion, but it will be the current government so that at least should be should give it, let you off the hook a little bit.


TA: Look, I am never happy about being excluded from decision making fora but nevertheless that is the fate alas of all ex-Prime Ministers.


ML: Very good. Tony, it’s a huge pleasure talking to you. Thank you so much for making time and coming and having these are not easy discussions. There are huge tradeoffs, whichever decisions we've discussed involve. And so they're heated questions, they are important questions and thank you for your, you know, your good spirit in coming on and having this conversation with me.



TA: I've enjoyed it, Michael, and I look forward to more conversations.



ML: Excellent. Thank you very much.



TA: Thank you.


ML: So that was Tony Abbott, Prime Minister of Australia from 2013 2015, and now my colleague on the UK Board of Trade. Next week, we get started with the programmed episodes of Cleaning Up season four, the first of which will be with Eamon Ryan, he's the leader of the Irish Green Party. He's also Minister of the Environment, Climate, Communications, and he's the Transport Minister in Ireland. Please join me at this time next week for the continuation of season four of Cleaning Up