The Gathering Storm of Diplomatic Catastrophe

Taken from Wikipedia, part of public domain.Australia is facing one of the most significant diplomatic crises in the last few decades, and there is almost no significant reportage of this impact. The first three months of government has seen a spectacular cavalcade of international incidents that is putting Australia in an incredibly fraught position. Significantly, there is currently a very insular account of international politics that is currently being trotted out by many of the media outlets, and if you were to take it at their word you might be forgiven for imagining this international furore is nothing more than a spat over phone tapping.

There are three policies and responses that are currently impacting Australia’s international relations, which are namely Australia’s immigration “turn back the boats” policy, Australia’s current climate policies, and Australia’s diplomatic activity through Julie Bishop and Tony Abbott. Both the previously mentioned policy positions are alienating Australia from the Asia-Pacific region, and Australia’s subsequent so-called ‘diplomatic’ activity is aggravating already delicate issues. While this might not be on the scale of the Cuban Missile Crisis, Australia will see itself caught in the middle of any escalating Sino-American tensions.

Australia’s policy on immigration and climate change are subtly and overtly affecting our foreign relations: our immigration policies are casting Australia as xenophobic, while our climate change policies are characterising us as a potential threat to national security.

Policy Failures on the Environment and Immigration

For a more nuanced take on Australia’s recent actions and how they are impacting upon our relations with Indonesia, I would direct you to this excellent analysis. The points to take away from this analysis is that the “turn back the boat” policy has incensed Indonesian national pride by undermining Indonesian sovereignty; it also highlights the significant impact that cutting foreign aid has had.

Australia’s climate change policy is an increasingly an issue of foreign policy, particularly as connections between climate change and security become manifest.

The other issue is Australia’s climate change and environmental policies (or lack thereof). Australia’s climate change policy is an increasingly an issue of foreign policy, particularly as connections between climate change and security become manifest. Climate change will have two big impacts on security, the first of them being the rise in ocean levels. To understand the geo-politics of these changes, I’d like you to look at a comparison of the Rising Sea maps by Natural Geographic. While the projections of ocean-level increases are variable, these maps are pretty reasonable medians compared to most projections I’ve seen. They are sufficient for our purposes here. You can get a broad sense of the way it will affect highly populated areas, and not to mention the impact it will have on the Pacific Islands, many of which may become entirely submerged like the island nation Kiribati.

If you compare Australia to South-East Asia, you will see that the ocean level rises will be particularly devastating to some of the most heavily populated areas in South-East Asia. These changes will put vast swathes of territory underwater and displace massive numbers of people. Comparatively, Australia will have some significant coastal impacts, but the principle population centres affected are coastal South Australia and the Murray-Darling basin. Agriculturally speaking, the creation of a permanent inner sea for Australia might actually be beneficial (please do not read this as an endorsement of sea-levels rising, merely an observation that on the balance of impact Australia will have some relative gains).

However, the real impact of global warming is how the impact on regional stability and security as hotter temperatures affect water cycles. Global warming’s impact on water cycles is phenomenal, from its impact on glacial waters in the Himilayas (a source of water for much of south-east Asia), to desertification in the Middle East. When sources of water dry up, and the land becomes more arid, there is a significant drop in arable land. Beyond this, as global temperatures increase, the frequency and potency of storm surges increases (see the 5th IPCC report). This means that storms are more devastating and more often, and flooding tends to be larger and more powerful. The issues on this for human habitation is not just the destruction of homes, but the stripping of topsoil necessary for arable land. It is these impacts through a shaken water cycle that will be most relevant to Australia’s domestically agriculture, far more than changes to ocean levels.

There is another angel for Australia, as both ocean levels and increased aridity are triggers for mass migrations, meaning global warming has a consequential implication for regional stability and security. It is for this reason, that Australia’s climate policies must be inherently linked to Australia’s foreign policy, as our stance and our pollution begins to jeapordise our neighbours’ very existence. Australia’s current policy regime smacks of Western exceptionalism, and there is little wonder why it leaves a bad taste in the mouths of our Asia-Pacific neighbours, particularly in light of Typhoon Haiyan.

…both ocean levels and increased aridity are triggers for mass migrations, meaning global warming has a consequential implication for regional stability and security.

Geopolitics of Asia-Pacific

Australia is in a precarious position diplomatically in the Asia-Pacific, by virtue of its the geopolitics of the history of the region. Australia’s three most important Asia-Pacific neighbours are Indonesia, China, and Japan: Japan and China constitute two (of four) of our most significant trading partners. To give you an idea, allow me to refer to an earlier article of mine where I explore Australia’s energy market relationships with China. Our foreign relations have also been markedly affected by the variable political stability of the Pacific Islands, and the regional stability of South-East Asia.

The defining historical attributes of Australia in the context of Asian-Pacific relations were fomented during the Cold War. Japan was westernised in order to provide a principle bulwark against the expansion of communism into the pacific theatre, and when the Domino Theory became prevalent there were significant overtures to secure places like Malaysia and Indonesia as anchor points for containment. In fact, Australia’s relationship to Indonesia was a key component of that policy.

Jump forward to the 1990s, and Australia endured an Asian security crisis under the Howard government. Part of Howard’s victory was achieved through rhetoric of White Australian nationalism, which was both jingoistic and echoed alarmism of the Yellow Peril. This was best exemplified in Pauline Hanson’s maiden speech, which catalysed the Coalition’s jump to the right as they sought to recapture Hanson’s voter block (for a supremely excellent deconstruction of the Howard years Asian crisis, I refer you to Anthony Burke’s “Fear of Security”, Chapter 5). Moreover, during this period, the Asian nations observed Australia’s treatment of its indigenous population, as a bell-weather for populist attitudes of its non-white neighbours.

What we saw then, and what we are seeing repeated under the Abbott government, is a political ‘double-bind’ where the government of the day is incapable of diplomatic overtures because of its own ideological complicity.

What we saw then, and what we are seeing repeated under the Abbott government, is a political ‘double-bind’ where the government of the day is incapable of diplomatic overtures because of its own ideological complicity. The Howard and Abbott governments both achieved power partly due to racist polemics, and Abbott significantly touts a domestic mandate that stems from these positions. This means the Abbott government must present bravado in response to the posturing of our Asian-Pacific neighbours, lest it alienate its voter base.

The Gathering Storm

There is a gathering storm of military and political posturing happening in our region. There are numerous policies of encirclement occurring as China is emerging as the next superpower. This year alone, Russia has sought to politically encircle China, strengthening Sino-Russo relations while also forging alliances with its peripheral neighbours. The US is seeking to demonstrate its military presence by encircling China with fighter jets and stealth bombers, and also giving support to the disputed Taiwan island. Japan, China, and South Korea are becoming increasingly anxious over territorial disputes. There are huge games of realpolitik occuring, and Australia, like it or not, will be dragged into the centre of it.

Australia is strategically pivotal for for the USA, should any conflict break out between the USA and China. Any escalation of tensions between these two superpowers becomes of intrinsic interest to Australian national security. Very recently, China tested the limits of Japan’s naval territorial limits by sailing a war fleet through the Soya Strait, encircling Japan, and returning through the La Perouse Strait. This is overt military posturing, and since Japan has a pacifist military policy since its capitulation after WWII, it is struggling to respond to this gesture. Instead, we see the US responding by flying jet fighters unannounced over the Chinese controlled East China Sea, over territory that is disputed between China and Japan; because the USA must prop up the sovereignty of Japan as a bulwark against any Chinese expansion into the pacific theatre.

Because of its close ties to both China and the USA, this is not an issue that Australia can remove itself from, even in the fact of China rebuking Julie Bishop for ‘interfering’. Moreover, Australia is a temporary member of the UN Security Council, and must necessarily be seen to take actions towards issues that affect global and regional stability. Australia stands on the precipice of a diplomatic disaster, and the continued gaffs and alienation are only undermining Australia’s capacity to employ effective diplomacy. It is no surprise that even the most diplomatic overtures by Australian representatives will be met with hostility and suspicion. As far as the international stage is concerned Abbott has huge shoes to fill after the exemplary diplomacy of Rudd-Gillard and Carr; even Alexander Downer, a former Coalition foreign minister, is casting aspersions to the government’s diplomatic competence.

Australia’s policy on immigration and climate change are subtly and overtly affecting our foreign relations: our immigration policies are casting Australia as being xenophobic, while our climate change policies are characterising us as a potential threat to national security. 

Marketising Climate Change

NRM-Clusters-Map

In this article, I review the newly formed Coalition’s agenda to repeal the carbon pricing scheme implemented by the Clean Energy Bill 2011, and the policy program of the Clean Energy Plan. These actions are subsidiary to a broader political attack upon the doctrine of State-based initiatives to regulate climate change. It is perhaps most clearly manifested in their initial actions to repeal the Clean Energy Bill, as well as abolishing three agencies incentivising renewable electricity production in Australia: the Clean Energy Finance Corporation (CEFC), the Climate Change Authority (CCA), and the Climate Commission (CC).

That the political debate has moved on from the question of climate change to its solution is worth interrogation, but not within the scope of this article. Instead, by focusing specifically on the interactions of these agencies with potential energy markets a single thread of the debate is analysed debate while contextualising the relevant political components.

…should the policy platform produce the results anticipated by the Coalition, it would be remiss to suggest that it was due entirely due to market forces

Political Climate

Broadly speaking, the political division over climate change falls upon the Clean Energy Plan. The polarisation centres not upon climate change and denial, but the application of political ideology as to the best means to address it. The Coalition’s policy reflects a neoliberal scepticism towards government regulation, deferring instead to market-mechanisms. In counterpoint, the Clean Energy Plan exemplifies a rejection of the market alone as the means for resolution, and places incumbency upon the State to induce sufficient change.

The Clean Energy Plan is and its attendant carbon pricing is a policy program responding to anthropogenic climate change, synthesising the disciplines of environmental sciences and political economy. It emerged after a failed attempt by the Rudd government to secure an Emissions Trading Scheme, and a subsequent compromise through the hung parliament under Gillard. It implicitly entails a classical economic approach that reconciles government agenda with environment concerns, and attempts to model its program on economic rationality. This necessarily filters the debate of climate change through economic discourse, by emphasising the nature of emissions as externalities. Implicit in this position is a contention that the market cannot respond rationally to climate change, and requires government intervention (see such claims as made in this book). Typically such critiques claim that market mechanisms cannot internalise emissions because individual choices within the context of market forces are subject to profit seeking over public interest.

The counter-argument lauds the capacity of market forces in selecting for environmentally sound practices: as the externalities of the environment increase social costs, and as these demands become increasingly urgent, industry and technology are able to respond with a solution by sheer dint of the demand. In this light, the Clean Energy Plan has been criticised on a number of fronts, including an inability to realise its ideals due to economic sleight-of-hand, which prevented incentivisation; another being a failure to engage with the populace on the significance of the carbon price, beyond how it impacts on the daily cost of living. These two arguments are exemplar of climate change denialism that rejects the potential thread of a Malthusian catastrophe, as exemplified in the works of Lomborg. These critiques effectively accuse the Clean Energy Plan of environmental authoritarianism (for example).

Power Dynamics

Having laid the groundwork of these political divisions, the contentions between market-mechanisms and State-based mechanisms become much more apparent. The ‘Carbon Tax’ is easily the most visible component of State-based instruments, and the principle focus of the Coalition’s actions. However, where we see additional complications and nuances on these issues is the Coalition’s focus on the abolishment of the climate change agencies.

Firstly, the CEFC’s principle mandate was the subsidisation of renewable electricity innovation: in the last year the CEFC managed to invest $560 million in projects, including the Moree solar farm and the Taralga wind farm. Moreover, the CEFC has laid claim to having encouraged an additional $1.6 billion worth of private investment towards clean energy projects. Incoming Climate Action Minister, Greg Hunt, has critiqued the CEFC of being a green hedge fund, “borrowed in taxpayers’ name for investing in speculative ventures” . It is worthwhile noting that such actions and positions are perfectly in line with the neoliberal sentiment of deregulating interference with the market.

The predominant form of electricity production in Australia is coal, comprising 77.2% of the country’s total electricity production

However, the issue is not as reductive as there are other political and commercial interests relevant to these changes; not the least of which is the significance of Australian coal. The predominant form of electricity production in Australia is coal, comprising 77.2% of the country’s total electricity production in 2003. Though different States and Territories have specific energy policies, the aggregate cost of most electricity production is based on the price of coal at the power station: coal also constitutes one of Australia’s principle energy exports to China. So the question remains that if State-based mechanisms are removed to incentivise change and Australia is economically dependent on the coal industry, will market-mechanisms alone be sufficient to achieve the government’s mandated renewable energy targets for 2020. If critiques hold true, then deregulation will simply expose a vulnerable environmental system to greater intrusion by market mechanisms, which cannot redress the issue. If the neoliberal vision holds true, then the market should reach a point of equilibrium as the burden of environmental degradation affects consumer choices.

There are two principle issues that will significantly play into this: the first is the cost of peak coal production, and the latter is the tipping point of solar power energy production. Currently there are a series of predictions suggesting that the production of solar powered electricity may become equivalent to conventional fossil fuel production. That Germany has taken a significant lead in adopting solar powered energy production, and thus growing the global solar market. There is also predictions of the decline of the global coal market, with Citi analysis predicting coal consumption in China could peak as early as 2014. Equally compelling, there is some evidence that renewable energies are gaining confidence in the US market, to the point of being considered reliable. This competition of solar and coal energy markets is made even more pertinent in Australia, as the Climate Commission revealed a significant uptake of solar panels.

To suggest these changes signal the success of the neoliberal vision is flawed, particularly in context of these competing energy markets.

To suggest these changes signal the success of the neoliberal vision is flawed, particularly in context of these competing energy markets. Neither of these energy markets has changed significantly without some form of government intervention. In 2012, the Chinese government invested $68 billion into renewable energy, making it a leader of that investment. In comparison, Germany and its production of solar power is more difficult to determine. At first glance, Germany seems to depict a narrative of a staunchly pro-nuclear power leading changes to become the world’s top photovoltaic installer. However, some later commentary predicts the burst of the solar bubble, and Lomberg specifically critiquing the policy project as being economically unsustainable. While a genuine economic critique is far beyond the scope of this essay, it is reasonable to say that neither the reduced cost of solar power in Germany nor the peak consumption of coal in China are purely the consequence of market mechanisms.

Due to the vagaries of both China and Germany, it is far too early to predict the success or failure of the Coalition’s policy platform to respond to the issue of climate change through a high dependency on market mechanisms. Moreover, should the policy platform produce the results anticipated by the Coalition, it would be remiss to suggest that it was due entirely due to market forces, which are merely capitalising on opportunities produced through contrary political economic agendas.