At US President Joe Biden's climate summit, on Thursday night Australian time, world leaders made a series of stunning announcements.
The world is on the move, yet Australia is not even trying to catch up. Instead, Prime Minister Scott Morrison recommitted the nation to piecemeal policies that will undermine our international reputation, threaten jobs, and increase our tax burden.
It doesn't have to be this way.
President Biden kicked off the summit announcing that the US would cut its emissions by at least 50 per cent by 2030, relative to 2005 levels. It was an announcement which cast shade not only on the policies of President Trump, but also his former boss President Obama. In fact, the US now has the most progressive position on climate change in the nation's history.
And further announcements followed. Less than a year after all of our major trading partners committed to net zero emissions, including China, Japan, and South Korea, many leaders announced they would go further. Japanese Prime Minister Yoshihide Suga declared Japan would cut its emissions by 46 per cent by 2030 relative to 2013 levels.
The Coalition's fellow travellers in the UK agreed to go even further. Boris Johnson proclaimed that the UK would cut its carbon pollution by 78 per cent on 1990 levels by 2035.
As for Australia? Well, we are still crab-walking to a net-zero target by 2050 ... maybe ... perhaps ... if we can.
The Prime Minister instead emphasised Australia's reliance on "new technology solutions", something White House officials have already dismissed as "insufficient".
It is incredible to see how far our closest ally has gone in recent days to rebuke Australia on the international stage. US Secretary of State Antony Blinken, the President's special envoy for climate John Kerry, and White House officials have all gone out of their way to criticise Australian inaction.
Australia prides itself as a good international citizen that punches above its weight in international affairs. That reputation is now in tatters, and it will not be repaired easily.
There will be economic consequences too.
A sparsely populated, sun-drenched island, Australia has some of the best renewable resources in the world. We have a skilled workforce and companies experienced in energy exports - what economists might call a natural comparative advantage in clean energy. We could also use that clean energy to value add to our world-class mineral reserves - tapping the growing market for green steel and aluminium, as well as for critical metals for renewable and other new technologies.
Yet these export industries and the jobs they bring are now at risk.
The economics of new, technology-intensive industries means that countries that move first by expanding into new industries gain a competitive advantage - one that can be almost impossible to match, even for latecomers with natural advantages.
We are already seeing the impacts. For example, the United Kingdom is prioritising collaboration with Chile, rather than Australia, on hydrogen trade, because of our determination to push hydrogen made using coal and gas, not renewables.
Countries with strong credible commitments will have the best seats at the table writing the rules that govern new green industries, leaving Australia on the periphery and our exporters further disadvantaged.
Finally, the Morrison government's claims that by focusing on technology we are avoiding taxes don't stack up. The money to subsidise fuels and technologies comes from taxes. By not pricing carbon, Coalition governments are placing the burden to pay for these subsidies on other areas, like income tax. Even worse, successive Australian governments have spent billions subsidising oil, gas and coal - so-called fossil fuel subsidies.
Because they are doubly distorting, it is difficult to find a government policy more universally condemned than fossil fuel subsidies. Their reform is on the agenda at both the WTO and APEC, and the Biden administration intends to drive action on the issue. Yet the Morrison government is making them the center of their "gas-led recovery".
The Coalition's lack of action on climate is also placing our emissions-intensive export sectors in danger of taxes from overseas. The European Union may introduce a carbon border adjustment in the next year, and the Biden administration plans to do the same. Carbon border adjustments are essentially import taxes, which apply a carbon price on imports equivalent to that faced by domestic producers in the importing country. If well designed, they can be implemented in a way that Australia will not be able to challenge them under World Trade Organization rules.
Carbon border adjustments will help reduce emissions from our exports - but compared to taking our own action, they are more costly to both Australian taxpayers and industries. The revenue collected will help alleviate the tax burden of workers and businesses in Europe and the US, rather than in Australia. Meanwhile our exporters - both clean and dirty - will be further limited by the administrative burden of complying with our trading partners' multiple tax regimes.
There is another way, as world leaders showed at the summit this week. The question is: when will the federal government choose to take it?
Time is running out both for our climate and our economy.
- Emma Aisbett is associate director (research) of the ANU's Zero-carbon Energy for the Asia-Pacific Grand Challenge, and a fellow at the ANU's School of Regulation and Global Governance. Christian Downie is an associate professor at the School of Regulation and Global Governance.