An interesting social phenomenon has emerged in recent years where the more an organisation breaks the law, the more they immediately turn around and start lecturing the rest of us about how we should live.
You can see examples of this from governments, unions and all types of corporate organisations. But perhaps the starkest example is the banks.
The banks were exposed at a royal commission charging fees to dead people. In response, they appoint themselves the moral finance guardians of the galaxy, denying banking services to industries they deem evil, like coal or cattle farming.
The banks have fancy words to dress their edicts up in a veneer of sophistication. Their practices are known as ESG. ESG is meant to stand for environment, social and governance standards. In practice, what ESG really means is Exempting our Selves from Guilt.
The latest example of this modern-day right of penance comes in an arcane set of new rules passed by the European Parliament. Europeans through history have invaded and ruled more countries than any other. They have done many good things, but there was also a lot of bad things about European imperialism.
Long after almost all colonial regimes have ended, however, Europeans still seem to be living under the illusion that they can tell the rest of the world what to do.
In just four months time the European Union’s Deforestation Regulation will come into effect. Under this new regulation, any cattle grazier that does not comply with European land use regulations will not be able to export beef to Europe. According to the Europeans, this law intends to reduce carbon emissions by at least 32 million metric tonnes a year and address all deforestation driven by agricultural expansion.
I am not sure how the European Parliament came to the view that they had the right to regulate how Australian land is used. Their politicians are not elected by Australians or accountable to Australians. If nothing else, the EU’s regulations are anti-democratic.
And like most times when democracy is sidelined, the autocratic outcomes will be worse because Brussels (where the European Parliament is based) has almost no understanding of Australian farm practices or the harsh Australian environment. For example, under the current interpretation of the regulations, farmers will not be able to clear basic weeds like lantana. Not only would that cripple our cattle industry it would be terrible for the local environment.
The European regulations restrict the conversion of forest land to agricultural land in the future. This regulation most impacts Indigenous Australians who have native title rights in parts of the country that have remained largely undeveloped, including in Cape York. Europeans already colonised the land of Aboriginals once before and now they are trying to do it again.
The Europeans have released maps of Australia designating how much of our country is covered by the forest they want protected. They have identified 143.3 million hectares of forest land, which is curiously 8 per cent more than Australia’s official definition of forest. And, our definition includes all areas with more than a 2m height canopy whereas the European definition covers only areas with more than a 5m canopy. So the European numbers seem way out of whack.
Of even more concern, 44 per cent of the land that Europe designates as forest in Australia has actually been grazed for generations. This error means that even the clearing of “regrowth” may not be allowed. If applied broadly most of Central Queensland’s grazing areas would be put out of action within decades.
I do not expect European bureaucrats to understand the harshness of the Australian bush or the unique economic challenges facing Indigenous Australians. But this is why the regulation of Australia’s environment should be left to democratically elected Australian governments.
The Australian Government has raised these concerns with European regulators. The US Government raised similar concerns recently too. But nothing seems to be getting resolved just months from the regulations coming into force.
The impact of the regulations will not hurt the overall strength of our beef industry, less than 1 per cent of our beef exports would be affected.
But, Europe’s clumsy regulations will have a big impact on global beef markets. Every time new ESG restrictions are imposed on farming, energy or manufacturing they cut supply and that pushes up the price of almost everything. A big part of our inability to get inflation down is because of the ESG-inspired green and red tape that stops production increasing.
And that gives another interpretation to what ESG stands for: extreme shortages guaranteed.
