As global carbon border taxes bite, Australian businesses should be fuming

No sooner does the person playing the prime minister announce he'd prefer a national target, than other government figures begin to call out, 'Oh no, we wouldn't' from stage right. It is all a distraction from the grim reality: Australia has no official proposal on foot for a credible plan to reach net-zero emissions, let alone any actual mechanism.

But while Australia's politicians guffaw hot air, a group of other nations, including our traditional allies, are busy forming a "climate club", to urgently tackle climate change at a global scale. And Australian businesses have been put on notice.

The European Union has just approved plans to put a 'carbon levy' on imports. The EU's Carbon Border Adjustment Mechanism will require exporters to the EU to pay a levy based on the amount of carbon used in making and shipping their products.

The US and Japan are now reportedly considering similar moves.

To spell out what this means, it's a border tax on imports from countries that lack climate ambition and have weak climate laws and policies. 'Climate club' countries with higher 'carbon prices' and strong climate policy would be exempt from having to pay the levy.

For Australian exporters, this spells trouble. The world is rapidly aligning itself along climate lines, with countries who have meaningful policies and a plan to reduce greenhouse gas emissions on one side, and those who do not on the other. Australia currently falls firmly into the latter camp.

The parochialism on show in the last few weeks - as Australian politicians seem to think the rules just shouldn't apply to us - is a complete misread of where the geopolitics of climate are headed. The stakes could not be higher. According to a Bank of America research report published earlier this month "climate strategies offer a route to global supremacy".

Australian businesses are set to pay the price for our federal government's lack of climate and emissions policy. It's hard to imagine they'll take this lying down. After all, Australia's peak business bodies themselves now favour binding emissions targets.

The truth is despite the gaping absence of Federal climate policy, many Australian companies are now committed to reducing their emissions and making a complete switch to renewable energy.

They recognise the business risk from global warming and are taking the necessary steps to reduce their climate impact, speeded by the newly minted climate-realism adopted by major investors such as Blackrock.

Over 30 of Australia's biggest electricity-using companies have now made 100 per cent renewable electricity commitments that, together, will generate new renewable power equivalent to powering 1.3 million households - almost all the homes in Brisbane and Perth combined - creating over 5000 clean energy jobs along the way.

The direction many Australian businesses are heading in is clear. Like their global counterparts, they're moving rapidly to get in front of the transition to renewable energy and play their part in tackling climate change. Privately many corporate leaders are fuming at what they see as the kind of incompetence and lack of leadership from our government they do not feel would be tolerated in the boardroom.

Already there's no doubt things would be far simpler for business if the Morrison government established a credible and effective emissions reduction policy - but a climate tax on imports will start costing them serious money, too. And this woeful intransigence from a government that claims to be the friend of business.

It's time for Morrison to get his house in order and follow the start that has been made on emissions reduction set by the states and territories, major businesses and, now, our global trading partners. Otherwise, in the rapidly forming climate-focused world order, Australia faces an awkward, embarrassing and expensive isolation.