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...attempting implement globally--orientated, internationally significant policy, spite of Canberra's traditional monopoly on foreign relations and the centralisation of political power, characteristic of Australian federalism. Through the NETS, the state and territory governments have collectively rejected the Commonwealth's authority on an issue of external affairs, undertaking development of policy of national scope and significance without Federal Government participation. While it is premature to predict the end of collaborative federalism, the NETS highlights the policy flexibility and capacity for intergovernmental conflict inherent in Australian federalism.
Introduction
Global efforts to mitigate climate change have focused on the Kyoto Protocol, which provides legally binding greenhouse emissions reduction targets for industrialised nations. (1) The Australian Commonwealth Government, however, has refused to participate in the agreement, arguing that it would damage the nation's economy, while failing to significantly reduce global emissions. (2) Instead, despite considerable support for ratification from the public, business groups, and civil society, the Commonwealth has limited itself to a range of voluntary, low cost and 'no regrets' measures, which have been subject to severe international criticism. (3)
In response, Australia's state and territory governments have developed independent greenhouse strategies, often in opposition to Commonwealth policy. Currently, subnational governments are working to establish a collaborative domestic carbon trading scheme, which would impose greenhouse gas emission limits on the stationary energy industry. The National Emissions Trading Scheme (NETS) has been framed in largely economic terms, particularly as an attempt to manage the costs and structural adjustment issues associated with Australia's eventual entry into the global carbon market. The Commonwealth Government has not participated in debate over domestic emissions trading, waiting, instead, for a legally-binding global framework. Differences in national and subnational policy agendas mean that movement towards development and implementation of the NETS has the potential to affect Australian intergovernmental relations in interesting ways.
The concurrent nature of Australian federalism, where legislative and regulatory powers overlap, rather than being clearly divided between the various governments, has long complicated intergovernmental relations. Foreign relations has traditionally remained under Commonwealth control however, because the Federal Government is granted authority over external affairs in section 51 (xxix) of the Australian Constitution. In general, this has meant that inherently global issues, like climate change, have necessitated a national response, coordinated and controlled largely by the Federal Government.
Globalising processes, however, are complicating intergovernmental relations in federal systems. In particular, the liberalisation of trade and financial markets has aided the erosion of traditional distinctions between domestic and external affairs, encouraging subnational governments to assume an international presence and participate in the world economy. (4) In addition, the ability of the nation--state to mediate relationships between non--central governments and the global economy has weakened, meaning that subnational governments must operate within transnational regimes, and the global economy, as well as inside the nation--state. (5) As a result, it is possible to consider Australian states and territories increasingly autonomous global actors, with political and economic goals independent of the Commonwealth.
Currently, Australia's states and territories are developing a collaborative national carbon trading scheme, despite opposition from the Federal Government. Through the NETS, the states and territories are considering implementation of a globally--orientated, internationally significant policy, which, to some extent, can be considered a challenge to both Canberra's monopoly on foreign relations, and the centralisation of political power characteristic of Australian federalism. While the Commonwealth holds exclusive jurisdiction over external affairs, and global issues have traditionally remained under Commonwealth control, increasingly subnational governments are independent participants in global activity on climate change.
The idea that subnational governments possess, let alone exercise, an ability to participate in global issues and institutions, has significantly challenged the norms of both Australian and international politics. Globalising forces however, encourage subnational activism, and Mingus suggests that 'there is substantial support for the idea that subnational governments have become serious actors on the international stage.' (6) Duchacek links increases in paradiplomacy, the foreign relations of subnational governments, to a growing awareness amongst subnational actors of the consequences of heightened international interdependence, and the need for improved government responses. (7) While these trends may be characterised in a variety of ways, paradiplomacy indicates that non-central governments may behave in ways that are 'parallel to, often coordinated with, complementary to and sometimes in conflict with macrodiplomacy' (the foreign affairs of nation--states). (8) While subnational governments in adjoining nations frequently engage in both transborder and transregional diplomacy, largely focused on cooperative regulatory schemes, global paradiplomacy refers to those 'political--functional contacts with distant nations that bring non-central governments into contact not only with trade, industrial or cultural centres on other continents ... but also with the various branches or agencies of foreign national governments.' (9)
This research attempts to understand trends in Australian external affairs and intergovernmental relations, in light of federal--state conflict over climate change policy. The scope of this paper is necessarily limited, and it has been impossible to consider the technical, legal or commercial implications of the NETS. Rather, this paper investigates to what extent, if at all, a shift is occurring within Australian intergovernmental relations, as subnational governments, increasingly empowered by their autonomous involvement in the global economy, seek to participate in international affairs, particularly around climate change. However, it is important to remember that development of the NETS remains in the early stages, with the National Emissions Trading Taskforce running behind schedule in their plans for scheme implementation, and the Commonwealth Government taking a hands-off approach to the process. Nevertheless, current developments in national climate change policy have the potential to provide important insights into the continuing evolution of Australian federal relations. This paper is structured in two parts. Initially, I detail the development of Australian greenhouse policy, and, in particular, tensions between federal and state policies. In the second section I consider the National Emissions Trading Scheme and its impact on Australian intergovernmental relations.
While it is premature to predict the end of collaborative federalism, the NETS highlights the capacity for policy flexibility and intergovernmental conflict inherent in Australian federalism. Globalisation may encourage a broadening of Australian external affairs interests, as subnational governments attempt to achieve better social, economic, and environmental outcomes for their citizens through international activism. Where the states and territories develop global...
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