The Drum (ABC online)

By Tom Switzer

In selling his carbon tax compensation plan last week, Greg Combet told the ABC1's Lateline: "Australia is not acting alone. We're not out ahead of the rest of the world. Other countries are taking important steps as well."

So, it's a good time to see how the big polluting nations are faring in the battle to price carbon. So far, not so good.

Start with North America. The United States represents 4 per cent of the world's population but accounts for more than 20 per cent of the world's carbon emissions. Yet president Obama and congressional Democrats have given up on implementing either a carbon tax or a cap-and-trade system. Last year the Senate, controlled by 60 Democrats, could not even agree to hold a debate on even the most loophole-ridden version of an emissions trading scheme.

Instead, the White House plans to give the Environmental Protection Agency the power to push forward with what many environmentalists consider weak carbon regulation. Earlier this month, however, the House of Representatives voted 255 to 172 to prevent the EPA from moving forward with those regulations. And Republican as well as Democratic senators insist they support some form of restriction on the EPA's regulatory powers.

President Obama has vowed to veto such legislation, but his climate agenda is bound to aggravate not only key industrial lobby groups but also some of the Democratic Party's staunchest supporters such as labour unions. In recent days, the Australian Workers Union has put pressure on the Gillard Government to protect jobs under its carbon tax; but Paul Howes is merely catching up with his American comrades.

The widespread fear among US labour unions is that any new regulations could cost thousands of jobs in the Rust belt states of Pennsylvania and Ohio as well as hurt the Democratic Party's 2012 election prospects at both the congressional and presidential levels. Remember opposition to an ETS was a successful political rallying cry for Tea Partiers across the nation during last November's mid-term elections.

Climate enthusiasts often cite California as evidence that American states are implementing a carbon pricing mechanism, but other states – New Hampshire, New Mexico – are also ditching the same scheme. Moreover, any state ETS covers only small sectors of the economy and, given that most of those states are not heavily dependent on coal, oil, manufacturing and agriculture, the overall impact on reducing US net emissions is negligible.

Meanwhile, the latest Gallup poll shows that only a quarter of Americans care deeply about climate change at all. Long gone are the days when candidate Obama was promising he would "make the oceans recede" and the planet "heal".

It's much the same story in Canada: Stephen Harper's government has made its support for carbon pricing conditional on a similar economy-wide US scheme, which clearly won't happen in the foreseeable future. The left Liberal Opposition has pledged to introduce an ETS if it is elected next year, but its support for a carbon tax at the last national election in 2008 cost it dearly.

Then there is China, now the world's leading producer of carbon emissions. It refuses to agree to cap its overall growth in its consumption of fossil fuels or reduce its net emissions of greenhouses gases.

Some environmentalists praise Beijing for making its economy more energy efficient. And it is true China's leaders have set a target to reduce emissions intensity – the amount of carbon dioxide emitted per unit of GDP – by 40 per cent from 2005 levels by 2020. Beijing has invested heavily in renewable technologies and nuclear power.

But it is also true that China's carbon emissions are steadily increasing. After all, its energy comes primarily from burning coal, which Australia gladly exports. The logic is obvious: like India and other developing nations, China wants to grow its economy and reduce poverty, and the cheapest route of doing so remains carbon energy.

Climate enthusiasts who lionise China as an environmental trendsetter should bear in mind the views of the leading UK climate economist Anthony Giddens: China "has the right and the need to develop, but much clearer plans than seem to exist at present are needed to show how the country intends to move away from its existing high-carbon path."

They should also ask themselves: if Beijing really was an environmental leader, why have its diplomats sabotaged or, in Kevin Rudd's colourful language, 'ratxxxxed' global efforts to reach a genuinely global deal?

The answer is obvious: China's leaders recognise that decarbonising the economy is a costly venture.

Then there is the 27-member European Union: simply put, carbon pricing has been a disaster. Since its implementation in 2005, the ETS has led to higher energy prices. It has failed to lower emissions (what did, unintentionally, was the financial crisis.) It has degraded into rent-seeking for the fortunate few. And it has been beset by multi-billion-dollar financial frauds. No wonder President Sarkozy last month ditched France's proposed Euro17/tonne carbon tax.

Add to this Japan and South Korea's shelving of the ETS, Russia's massive carbon-fuelled economic plans, the refusal of Japan, Canada and Russia to sign any successor to the 1997 Kyoto protocol which expires next year, the dwindling prospects for a legally binding, enforceable and verifiable global deal at the next round of UN climate talks in South Africa later this year, and it is clear Australia would be out of step with the world under Labor's carbon tax proposal.

So, why is all this important? Well, because there is no solution to climate action without global action. Without a global agreement, there won't be a global market. As even Ross Garnaut insists, ultimately global mitigation will only be successful if nations can trade in emissions permits.

Given that China and the US show no signs of embracing an economy-wide cap and trade scheme, the Gillard Government's carbon price will remain a tax that imposes unfair burdens on many of Australia's trade exposed industries, not least steel companies and workers. It would amount to economic pain for no environmental gain.

What, then, should we do?

I suggest we dispense with unilateral, costly and ineffective policies such as carbon taxes and do what humans have done over the centuries and adapt to any climate change. By all means, plant more trees, protect endangered species, focus on clean air, ensure safe drinking water, clean up toxic dumps, and create more incentives to invest in non-carbon technologies.

But to urge Australians, who account for only 1.4 per cent of global emissions, to lead the world in slashing greenhouse gases in the aforementioned environment is heady stuff: the sort of thing that Sir Humphrey would have described as "very brave, minister".

It is also economically reckless.

Tom Switzer is a research associate at the United States Studies Centre at the University of Sydney and editor of Spectator Australia.