Jobs Trump Climate as Bromance Ties Canada-Australia

Updated on
Australian PM Abbott and Canadian PM Harper
Australian Prime Minister Tony Abbott, left, shakes hands with Canada's Prime Minister Stephen Harper during the official welcome at the Brisbane Convention and Exhibitions Centre on November 15, 2014 in Brisbane, Australia. Photographer: Chris Hyde/Getty Images via Bloomberg

When the U.S. and China agreed to a joint climate change initiative four weeks ago, it left the leaders of two of their major trading partners in an awkward position.

For Australia, its strong growth of recent years has depended on China’s voracious appetite for coal and other resources. For Canada, the U.S. is its largest energy market, and it has sought to keep its climate policies in close alignment.

Neither Australia’s Prime Minister Tony Abbott nor Canada’s Stephen Harper have ever displayed much enthusiasm for the kind of global policy against climate change now advocated by President Barack Obama and his Chinese counterpart, Xi Jinping, who have agreed to steeper carbon cuts for the U.S. and an end-date to emissions growth for China.

Harper and Abbott “both have governments that don’t seem to take the climate change threat very seriously,” said Barry Naughten, a former Australian government energy economist.

The pair have shared a vision forged from common interests and conservative orientations: that the extraction of oil, natural gas and coal -- and the jobs that go with it -- trumps climate protection. With representatives from nearly 200 nations gathered in Lima to lay the foundation for a successor agreement to the 1997 Kyoto Protocol, Harper and Abbott stand out as leaders of Western-style market economies skeptical of the process.

Conservative Politics

Their reticence on climate policy has prompted chiding from the world’s most prominent leaders. Obama last month called on Australia to step up the fight against climate change, noting risks of drought and changes to the Great Barrier Reef, while United Nations Secretary-General Ban Ki-Moon said Canada and Australia must rise above domestic politics.

“This goes beyond the national boundary because climate change has been impacting the whole spectrum of our life. Canada is an advanced country,” Ban said in a Dec. 4 interview with the Canadian Broadcasting Corp. “You have many ways to make some transformative changes.”

Harper and Abbott first met nine years ago, before either won the highest electoral office, and have remained allies in the trenches of conservative politics ever since. Mutual concern that climate policies might harm fossil-fuel industries has been central to their political philosophies throughout.

‘Effective’ Partnership

“There’s a bromance between the two, and the conservative elements of both governments are dominant and aren’t that keen on action,” said John Connor, chief executive officer of the Climate Institute, a Sydney-based research group that advocates for low-carbon economies. “It’s a partnership of what increasingly look like pariahs, but quite an effective one.”

Shortly after coming to office in 2006, Harper began working against binding climate agreements. His government then campaigned against a carbon tax in the 2008 election and withdrew from the Kyoto Protocol in 2011, saying the previous Liberal government had made commitments that were too expensive to achieve. He skipped international meetings including the UN climate talks in Copenhagen and more recently a climate meeting in New York attended by other world leaders.

While adopting fuel-emission standards alongside the U.S. and rules for the coal industry, Harper has yet to pass long-promised emissions regulations for the oil and gas industry based in his home province of Alberta.

‘Coal Is Good’

For his part, Abbott warned against the demonization of coal at a mine opening in October, saying “coal is good for humanity.” He wants to reduce commitments to renewable energy and fulfilled a campaign promise in July to scrap a national price on carbon in favor of a voluntary fund to reward polluters for making cuts. Harper’s government sent its congratulations.

The policy decisions “have created the impression of Australia lapsing back into a position of inaction and possibly trying to scuttle international progress on climate change,” said Frank Jotzo, director of Australian National University’s Centre for Climate Economics & Policy.

In November 2013, Canada and Australia worked together to oppose a Commonwealth climate fund to help small island states and under-developed African countries address the effects of global warming. Harper recently said, in the wake of the China-U.S. agreement, that Canada will make a contribution to a similar fund championed by Obama.

‘Genuine Mates’

“I got the impression that they are genuine mates, not just political buddies,” said Brendan Lyon, the CEO of Infrastructure Partnerships Australia, who joined Abbott on his trip to meet Harper in Ottawa last June. “They seemed to have a very genuine personal friendship and regard for one another. It was like two old friends at an extended dinner.”

Canada’s massive oil sands and Australia’s coal and iron-ore reserves give the pair reason not to push for action.

Exports of oil to the U.S. have helped Canada’s economy grow about 70 percent since 1990. Australia has had 23 years of uninterrupted growth fueled by coal and iron-ore exports to China, which until recently was building a new coal power plant every two weeks.

Harper and Abbott’s stance could put them in a camp at the Lima climate talks along with other fossil-fuel superpowers such as Russia and Saudi Arabia which have lobbied at UN talks to protect their oil industries from carbon regulations. With the U.S. and China pledging stronger targets, Canada and Australia may soon have to decide which way they want to lean.

‘We’re Acting’

Harper and Abbott don’t deny climate change exists. In a speech in Parliament last month, Harper called the U.S.-China agreement a “very positive step” toward reaching a global pact in 2015. “We look forward to working with our partners in the international community.”

As chairman of the annual Group of 20 leaders’ summit in November, Abbott initially sought to keep climate change off the agenda. “I’m focusing not on what might happen in 16 years’ time, I’m focusing on what we’re doing now and we’re not talking, we’re acting,” he said after Obama and Xi announced their commitments out to 2030.

Ultimately, climate change made it into the final communique, with Abbott saying all G-20 leaders “support strong and effective action.”

Both Canada and Australia emphasize the need for commitments that are realistic and “meaningful.”

‘Transparent Commitments’

“Canada is committed to achieving a new international climate agreement in 2015 that includes meaningful and transparent commitments from all major emitters,” Christine Roger, a Canadian environment department spokeswoman, said in an e-mailed response to questions last week. An agreement must “apply to all” and “ensure that commitments reflect current global realities,” she said.

“Australia will work with all other countries to ensure we are on track to deliver a realistic and meaningful 2015 agreement in Paris,” Foreign Minister Julie Bishop, who is leading the Australia delegation in Lima, said last week in an e-mailed statement. An agreement “must deliver real cuts in emissions and not put countries at a competitive disadvantage.”

Harper and Abbott first met in October 2005 in Ottawa over lunch at the Australian High Commissioner’s residence when Abbott was in Canada to attend an international conference on avian influenza in his capacity as Australia’s health minister. What followed was an intense conversation about policy and politics. It was clear the two men got on quite well, according to someone who was at the meeting and asked not to be identified.

Imposed Reductions

That relationship has only deepened over the years, especially now that they both lead their countries.

“He has taken me under his wing when he was an experienced Prime Minister and I was a mere neophyte Opposition Leader,” Abbott said of Harper in June. “I look forward to a strong partnership in all of the forums of the world in the months and years to come.”

Negotiators in Lima will attempt to lay the foundation for a global agreement in Paris next year, with nations setting pledges, like the U.S. and China have done, in the first quarter of 2015. The European Union has promised to cut emissions by 40 percent by 2030 from 1990 levels, the most ambitious program announced to date. The U.S. now has a target of as much as 28 percent by 2025 from 2005 levels and China will stabilize CO2 output by 2030.

‘Destroy Jobs’

With China’s new policy commitment, Canada and Australia are in jeopardy of losing one of their favored arguments -- that previous negotiations had imposed emissions reductions on industrialized countries while allowing China and other developing nations to boost CO2 output as their economies caught up.

“For a very long time, certainly from the start of Prime Minister Harper’s tenure as prime minister, he said this just won’t work,” said John Kirton, a director of the G-8 and G-20 Research Groups at the University of Toronto who is writing a book on climate-change politics.

In the end, Harper and Abbott’s lack of enthusiasm for a comprehensive climate treaty may not matter, given the growing momentum for action reflected in the U.S.-China deal.

“The major global economies are now aggressively tackling climate change,” said Martijn Wilder, head of global environmental markets at law firm Baker & McKenzie. “Australia and Canada cannot stop what countries like China, India and the U.S. do.”

The question is how the Harper-Abbott alliance will respond as the new round of climate talks proceed. In his June visit to Canada, Abbott praised Harper for being an “exemplar” of “center-right leadership.”

Harper, speaking the language preferred by both, responded: “No country is going to undertake actions on climate change that are going to deliberately destroy jobs.”

That message will be tested in Lima.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE