Carbon Justice: The scandal of Australia's biggest contribution to climate change

CARBON JUSTICE

JEREMY MOSS is professor of political philosophy at the University of New South Wales, Sydney. His main research interests are in political philosophy and applied philosophy. He has written about several dimensions of climate justice, including justice and climate transitions, historical responsibility, complicity and climate harms, and the ethics of fossil fuel exports. His books include Reassessing Egalitarianism, Climate Justice Beyond the State and Climate Change and Justice. He is the recipient of the Eureka Prize for Ethics and the Australasia Association of Philosophy Media Prize.

Also by Jeremy Moss:

Reassessing Egalitarianism

Climate Justice Beyond the State (with Lachlan Umbers)

Climate Change and Justice (Ed.)

CARBON JUSTICE

THE SCANDAL OF AUSTRALIA’S

BIGGEST CONTRIBUTION

TO CLIMATE CHANGE

JEREMY MOSS

A UNSW Press book

Published by

NewSouth Publishing

University of New South Wales Press Ltd

University of New South Wales

Sydney NSW 2052

AUSTRALIA

newsouthpublishing.com

© Jeremy Moss 2021

First published 2021

This book is copyright. Apart from any fair dealing for the purpose of private study, research, criticism or review, as permitted under the Copyright Act, no part of this book may be reproduced by any process without written permission. Inquiries should be addressed to the publisher.

Internal design Josephine Pajor-Markus

Cover design Luke Causby, Blue Cork

Cover image Rusty Elliott/stock.adobe.com

All reasonable efforts were taken to obtain permission to use copyright material reproduced in this book, but in some cases copyright could not be traced. The author welcomes information in this regard.

NewSouth Publishing sought the most sustainable options available in the printing of this book. It was printed on paper using fibre supplied from plantation or sustainably managed forests, and the cover includes a varnish coating instead of plastic lamination.

CONTENTS

Introduction: Australia’s dirty secret

Chapter 1: Climate justice

The currency of justice

Distributive principles

Scope

Agents

Do no harm

Chapter 2: It wasn’t us

Complicity

Measuring the contribution

Influence

When did they know?

A perverse response

A carbon budget deficit?

Chapter 3: Time to adopt the contribution model

But how much harm do they really cause?

Follow the money

Backing winners?

Climate harms are different

What they say and what they do

Chapter 4: A just response

Creating a national inventory

Phasing out fossil fuel production

Banning political donations and appointments

Liability for the past

Avoiding ‘green swans’

How fast? How much?

Export targets and a reverse OPEC

What is a fair share?

Climate clubs

Chapter 5: Sharing the benefits, not the risks

A research dividend

A predictable response

Banning mine sales

Net zero or greenwashing?

Full accounting

‘Pollute now, pay later’

Conclusion

Appendix: Methodology: Calculation of fossil fuel emissions

Acknowledgments

Endnotes

Bibliography

Index

List of figures

Figure 1: Australia’s top ten carbon majors

Figure 2: Emissions produced by Australia’s top six carbon majors

Figure 3: BHP’s emissions

Figure 4: Australia’s domestic vs exported emissions

Figure 5: Australia’s top ten carbon majors and tax

Figure 6: 2018 and 2019 CO2-e emissions of Norway, Canada and Australia

Figure 7: Carbon majors and net zero targets

Figure 8: BHP spending on new oilfield compared to spending on ‘Climate Investment Program’

Introduction

AUSTRALIA’S DIRTY SECRET

Australia is the largest coal exporter in the world. When combined with our exports of gas, this enormous volume of exported fossil fuels produces a correspondingly huge volume of greenhouse gases as those fuels are consumed across the globe. The exports of coal, oil and gas confer on Australia the unwelcome distinction of being one of the world’s largest contributors to climate change. Each year Australia’s ‘exported emissions’ from coal, oil and gas are double those of its entire domestic consumption. If the emissions from Australia’s exports are combined with domestic emissions, Australia contributes around 3 to 4 per cent of global emissions. Calculated in this way, Australia is the sixth-largest emitter in the world, behind China, the USA, India, Russia and Japan.¹ Far from being a tiny contributor to climate change because of a relatively small population, Australia is a key driver of climate change through its fossil fuel exports.

This huge production of fossil fuels is occurring as the world sets calamitous new climate records. According to NASA, the last five years have collectively been the warmest in modern record-keeping.² This warming is caused mostly by burning fossil fuels; 76 per cent of all emissions originate from fossil fuels.³ Unless there is some drastic reduction in the current rate of emissions, a probable rise of 1.5 degrees Celsius over pre-industrial levels is likely locked in.⁴

Yet despite these threats, exported emissions are not officially recognised as part of Australia’s emissions, and do not feature in our carbon-reduction plans. Australia’s continued contribution to climate change through the export of fossil fuels is Australia’s great climate scandal.

The export of such enormous quantities of fossil fuels is made possible by the actions of governments at many levels. But it is not the governments themselves that do the exporting (although one could be forgiven for thinking that is the case). The export of fossil fuels is carried out by private companies, the largest of which are the Australian ‘carbon majors’ – the major fossil fuel producing companies. These companies extract the coal, oil and gas that generate electricity and fuel cars and planes. Many of them are household names – Shell, BHP, ExxonMobil – and have, in some cases, existed for over 100 years. While governments should be held accountable for their role in enabling the export of fossil fuels, the carbon majors themselves have escaped adequate scrutiny as the actors who do the actual exporting.

The size of the problem created by the carbon majors is immense. In 2018, the volume of emissions produced from the coal extracted by Australia’s top six coal producers – Glencore, BHP, Yancoal, Peabody, Anglo American and Whitehaven – produced 551 megatons of CO2-e, more than the whole of Australia’s domestic emissions for 2018 (534 megatons of CO2-e).⁶ If the top ten Australian carbon majors were a single country, it would be the eighth biggest emitter on Earth.⁷ There are other, smaller, fossil fuel producers that operate in Australia, but most of the fossil fuels sold come from the top ten.

Figure 1: Australia’s top ten carbon majors⁵

Many of these companies have also been big emitters for a long time. For instance, over a 15-year period from 2004 to 2018, fossil fuels exported by BHP produced more than 2300 megatons of CO2-e. In 2019 the emissions produced by BHP’s products globally were 567 megatons of CO2-e – more than was produced by the whole population of Australia!⁸ If consumed, the 2018 coal assets of Glencore, the second-largest carbon major in Australia, would produce more than 29 times Australia’s 2019 greenhouse gas emissions.⁹

Some of these companies operating in Australia are part of huge global corporations. Glencore, for instance, had projects in 35 countries and employed 145 000 people in 2019.¹⁰ Chevron, which operates the huge Gorgon gas project in Western Australia, has over 1.1 billion barrels of net oil equivalent proven reserves and annual revenue of over US$94 billion.¹¹ In 2020 BHP had revenue of over US$42 billion, more than US$100 billion in assets and employed 80 000 workers or contractors.¹² Other carbon majors are Australian-based, but are very large companies nonetheless. Woodside supplies 6 per cent of the world’s LNG and in 2020 had revenue of US$3.6 billion.¹³ The top ten Australian carbon majors on which we will focus here collectively make a huge contribution to climate change.

Many of these global corporations also have enormous carbon footprints. Richard Heede, for instance, has found that around 63 per cent of global emissions over the period 1854 to 2010 are traceable to the activities of just 90 large corporations – mostly oil, gas, and coal companies, together with seven cement producers. They are not only historically some of the biggest companies on global stock exchanges, but some, like Saudi Aramco or Gazprom, are enormous state-owned companies.¹⁴

The Australian carbon majors make a huge contribution to climate change, yet their role has escaped proper scrutiny. There has (rightly) been a great deal of discussion about Australia’s high level of domestic emissions, but the export of fossil fuels by the carbon majors is a far bigger contribution to climate change. The absence of discussion about the carbon majors and exports more generally is even more startling when we realise how long this industry has been a central part of Australia’s history.

When I began researching Australia’s contribution to climate change I came across some startling facts about Australia’s association with coal. Not only did I find that Australia was the world’s largest exporter of coal, but the first export of coal from Australia occurred as far back as 1799. In fact, the ship on which Captain Cook arrived in Australia was a converted coal barge. No sooner had white settlement begun than Australia was establishing its coal industry.¹⁵

There are many possible reasons why the issue of exports escapes proper scrutiny. Fossil fuel exports such as coal or gas are, for the most part, extracted away from major urban areas and are thus largely hidden from view. Of the roughly 95 operating coal mines in Australia in 2019, most are located away from major cities.¹⁶ The campaign against Adani’s Carmichael coal mine in Queensland notwithstanding, the industry simply does not get enough national attention.

These exports also fly under the radar because the companies responsible have distorted the political process. Through donations to political parties, and activities including public campaigns, lobbying, recruitment of former government ministers to senior industry roles (and governments’ reciprocal appointments of individuals associated with the fossil fuel industry to government positions), the carbon majors seek to promote their interests and those of the fossil fuel industry. When the federal government’s plans for repairing the economy post the COVID-19 pandemic are via a ‘gas-led’ recovery, and a former board member of the world’s largest carbon major is appointed to run it, it is clear that the industry is able to shape decision making.¹⁷

In addition, powerful commercial interests have successfully maintained several fictions that have formed the perception of the industry. One egregious example is the idea that fossil fuel exports create huge numbers of jobs. In fact, jobs per tonne of coal have been declining in Australia and the number of people directly employed in the industry is vanishingly small. Despite this, the claim about the industry’s creation of large numbers of jobs has gained wide acceptance. Much the same is true of the carbon majors’ claim that they pay large amounts of company tax in Australia. The ten carbon majors pay very little company tax and receive generous subsidies to boot.

One claim that really stands out, and has been made persistently by governments and corporations alike, is that the greenhouse gas emissions from exports are simply not our problem. When Australian companies sell coal, oil and gas, those fuels are burnt in other countries and the emissions produced are therefore their responsibility, not ours. Yet this view can’t be right. The idea that being the world’s largest coal exporter should not count at all towards assessments of Australia’s contribution to climate change doesn’t hold up. We scrutinise the export of live animals, of uranium, we make decisions about arms sales to governments who abuse human rights. Yet, when it comes to exporting coal, oil and gas in a world that is facing dangerous climate change, we ignore the obvious moral questions that must be confronted. Such scrutiny is doubly warranted because the export industry is privately owned. People cannot vote to change what the industry does in as direct a way as they can for governments.

Even those who have focused attention on the issue of exports have not always made the connection between the responsibility of Australia’s carbon majors and their ‘exported emissions’ in the right way. Simply noting the huge volume of emissions produced by the consumption of exported fossil fuels does not establish who is responsible. That is because the language we need to address the question of exports is not that of mathematics but morality. We need to be able to say why supplying and exporting fossil fuels makes a company responsible for climate harms. The focus has naturally rested on the countries and companies that receive and consume the exports as the agents responsible for the greenhouse gas emissions. Indeed, it