The Tony Blair Institute of Global Change recently published an article asserting that reducing emissions was difficult and would fail unless we expanded use of technologies that are expensive and a challenge to living standards. This is reminiscent of nineteenth century economist William Stanley Jevons’ in “The Coal Question”, warning of the limits that finite coal resources placed on British prosperity. The hole in both visions is the absence of international trade.

Specialisation in line with comparative advantage removed the limitations on countries without the natural resources of coal, oil, or gas becoming great centres of industrial activity. International specialisation and trade along the supply chain of zero-carbon goods production can render the limited renewable energy resource endowments of Europe and Northeast Asia compatible with prosperity through early movement to zero net carbon emissions.

Success will require open minds and open economies—just as sustained prosperity of regions without rich fossil carbon resources required open minds and open economies.
Open economies are threatened by US retreat from international exchange, though this is a setback but not in itself a fatal blow either to the global mitigation effort or to prosperity in the rest of the world. The challenge is for other countries to remain open to each other, while we await the return of America, or confirmation of its departure.

In this lecture, Prof Ross Garnaut will discuss how international trade in zero-carbon goods amongst the rest of the world can deliver continued prosperity through transition to zero net emissions.