The most important task for global climate policy is to get First World countries to finance the developing world’s mitigation efforts. A crucial feature of Australia’s Clean Energy Future package is that it allows companies to purchase international “offsets” — credits for reducing emissions overseas. Many environmentalists attack this, because we should cut our own pollution rather than pay foreigners to reduce theirs. However, perverse as it may sound, “sending Australian money offshore” is exactly the right strategy if we hope to avert dangerous warming.

To an economist, such internationalism is plain commonsense. Many environmentalists, trapped by reflexive nationalism, think otherwise. Fergus Green in Crikey characterises use of international offsets as a “travesty of policy making” precisely because this approach seeks to reduce emissions efficiently on a global basis.

Why should Australians pay for emissions reductions overseas? Because over 97% of future emissions increase will occur outside the OECD. Because over two thirds of the lowest cost abatement opportunities are in the developing world. Because developing countries’ annual mitigation expenses — estimated at over $US140 billion — far exceed their own capacities.

Consider Indonesia, a major emitter of greenhouse gases, but also a country where around one third of the population lacks access to electricity, and per capita annual incomes average just $US4400. Does it seem likely that Indonesian voters, whose per capita emissions are quite low, will choose emissions restraint over access to electric lighting and refrigeration? Fortunately, Indonesia also presents Australia with opportunities; Indonesia’s emissions could be reduced cheaply through better management of forests and peatlands.

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Tony Abbott spins webs of confusion around climate change, but he is correct to note that any Australian efforts are futile if pollution from developing countries such as China and Indonesia goes unchecked.

If a global agreement based on legally enforceable targets is unlikely, this raises a question — how should a rich, educated, ecologically vulnerable country like Australia respond?

Australia’s answer has been to promote international co-operation through policy that could support an efficient global response. And this is no futile gesture. Around the world there are significant experiments in progress. Several networks of states in North America are working towards GHG emissions trading, China is promising carbon pricing, and the Clean Development Mechanism already connects the European emissions market to abatement projects in the developing world. None of these initiatives is perfect, but in time they might expand and grow stronger. Australia’s outward-looking policy gives confidence to climate campaigners everywhere.

Fergus Green lambasts “boffins” (such as Ross Garnaut) who conceived of The Clean Energy Future Package for their naive faith in cooperation. It must warm the hearts of climate deniers to read this assault on a policy forged in the fierce heat of rationalist economic analysis. The co-operative global approach to which Garnaut’s policy is geared is the only politically plausible response that might also be effective. If Garnaut’s optimism is misplaced, which it may be, then we are at the end of the road. In this case our last defence against the dire predictions of climate science will be drawn from science fiction — a vast global experiment in “solar radiation management” to block sunlight and cool the planet.

Yet Fergus Green is no climate denier. He outlines his own idealistic vision — Australia must reject ‘economistic’ thinking, shut down its energy export industry, provide massive direct support for the renewable energy sector and unilaterally embrace a low-carbon future. Obviously, such policies would be economically ruinous. But, by only limiting Australian emissions, they would also do very little to avert dangerous climate change. And international experience suggests that myriad forms of state capture and rent seeking arise where governments attempt such green interventionism. The astronomical cost of emissions reductions in Germany illustrates this point.

Impractical thinking is common across the political spectrum — take Adam Bandt’s enthusiasm for “local electricity plants owned and run by streets and neighbourhoods” or the Liberal’s reliance on magically storing carbon in soil. It speaks volumes about the serious commitment of Bob Brown’s Greens that a quasi-socialist party has embraced a market-based approach. The irony that Tony Abbott promotes government intervention and derides the expertise of scientists and economists is equally revealing. This, in Malcolm Turnbull’s words, is the total triumph of know nothing.

The lack of effective global co-operation to address climate change is deeply worrisome. Australia must respond through investments in energy research and development. We should also seek international agreements to lift the global research effort. However, such measures should be additional to current policies.

It is bewildering that anyone with genuine concern about climate change should condemn a scheme that, given the poisonous political environment, is a wondrous miracle of good public policy. The Clean Energy Future Package is perhaps the worst climate policy imaginable, excepting all other policies that other countries have tried. With climate sceptics waiting to form government, and with no politically viable alternative in sight, this is the only game in town.

*Dr Jonathan Symons is an assistant professor at Lingnan University, Hong Kong. He is co-editor of Energy Security in the Era of Climate Change: The Asia Pacific Experience.