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

“If you try to have an across-the-board rule, it won't work”: Tony Abbott on the potential of trade agreements to save the planet.


In this episode of Cleaning Up, Michael Liebreich talks to Tony Abbott, prime minister of Australia from 2013 to 2015, and now Advisor to the UK Board of Trade.

This is an abridged transcript of the conversation, edited for clarity.


Michael Liebreich: Tony, welcome to Cleaning Up. How do you see the link between trade and tackling climate change?


Tony Abbott: Well, trade increases wealth and the wealthier you are the better environmental steward you can inevitably afford to be. Look at the countries that really are ravaging their environments. 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, pollute their rivers, and pour chemicals into the sky and oceans.

The richer you are, the more you can use technology to continue to be wealthy without being environmental vandals. If you look at Britain and Australia, to take two examples, air quality today is much better than a couple of decades ago. Water quality is much better than a couple of decades ago. Land management practices are much better than a couple of decades ago. The use of chemicals, both in industry and in agriculture, are much better than just a couple of decades ago. 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.


ML: Turning to the question of trade agreements. You have signed free trade agreements on behalf of Australia with Korea, Japan, and China. In principle, it can be imagined that a country might push a peer during the agreement talks to do more on the environment.  Is there room for those kinds of bilateral agreements?


TA: If we’re going to have bilateral trade agreements, we can also have bilateral conversations about various other things too. But if we try to make the trade agreements critically hinge on our trading partners adopting 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 Britain and Australia, for example, given that our environmental, animal welfare, labor standards, and human rights standards are very comparable, even if they're not identical. But it does become an issue if you are talking a country like India. It's not realistic to have identical 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.


ML: We worked together on the Green Trade Report. One of the things we emphasized was the global nature of green technology.  You can’t build an electric vehicle without a global supply chain, for example.  I want to talk about resilience of those supply chains.  Solar panels and batteries installed in Australia are coming from China, but actually, Australia is already known to have the sixth biggest reserves of rare earths in in the world. How do you think we should be thinking about trade agreements that bring us into dependence on illiberal countries, and obviously the biggest and most significant one is China?


TA: My understanding is that the Australian rare earth manufacturer, Linus, has only survived over the last decade or so because of a significant subvention effectively from the Japanese government, which didn't want to go out of business in the face of predatory pricing from its Chinese commercial rivals.

It’s 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 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.


ML: I return to my question on trade deals. There are many environmental problems, globally and locally, that derive from the types of industries we’ve been talking about. Do you think these can be mitigated through trade agreements?


TA: If you try to have an across-the-board rule, it won't work. But if you try to do things one 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, it might work.


ML: Eyes of the world are going to be on COP 26 soon and they are going to be on Australia, are they not? Australia is broadly perceived as having got a bit of a free ride during the Kyoto period. Are we going to see a big move from Australia? Will PM Morrison say it's inevitable, it's in our interest because of the minerals, because of the export potential, we're going to lean in and go for net zero 2050?


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. So 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: Australia's emissions reductions have come from land use and waste and early on in  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. If you look at the non-land use, it's been pretty much flat, .


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.