CANADIAN Foreign Minister John Baird has cast doubt on the fundamental analysis underpinning Australia's carbon tax policy, saying neither his nation nor the US would ever introduce an emissions trading scheme.
While avoiding any criticism of the Gillard government, Mr Baird told The Australian he did not believe any effective carbon-trading system would come into effect.
The ability to trade greenhouse gas emissions, or carbon credits, is central to the Australian government's carbon tax.
Under Labor's scheme, Australia's greenhouse gas emissions would continue to rise but the nation would achieve its carbon reduction targets by purchasing credits on an international scheme.
Mr Baird said he did not believe Canada would introduce a carbon tax or an ETS.
"The people of Canada spoke unequivocally about that at the last election," he said.
Mr Baird's conservative government, under the leadership of Prime Minister Stephen Harper, won an absolute majority in the Canadian parliament for the first time by advocating a policy of no-carbon tax and no ETS.
"I think there's only one member of parliament who advocates it, and that's the lone Greens member," Mr Baird said.
He also does not believe the US will introduce either a carbon tax or an ETS: "I think even President (Barack) Obama has conceded that when he had massive majorities in the house and the Senate, he couldn't get it passed.
"The chances of anything comprehensive coming out of the congress is not likely."
Mr Baird was at pains not to comment on or criticise the Gillard government in any way.
However, his comments are devastating for the Gillard government's proposed scheme, because if the US and Canada do not go down a market road for cutting greenhouse gas emissions, it is impossible that anything remotely resembling a global market could emerge.
Even more devastating is Mr Baird's judgment that carbon-trading schemes are inherently unreal and non-productive.
Asked if Canada would participate in a carbon-trading scheme, he replied: "There's nothing to participate in. Where is it going on today?"
He spoke more generally about the ineffectiveness of so-called market mechanisms in dealing with greenhouse gas emissions: "Everyone just lines up to get credit. My province has a lot of forests -- where do we get credit for that? At the end of the day, it's like a pyramid marketing scheme. You don't have to sell this dog food, you just have to get 10 of your friends to sell it and get the royalties from that."
Instead, Mr Baird said, the Canadian government had decided to reduce greenhouse gases through regulation.
"We've taken the decision to use regulation as the centrepiece of our approach."
If he is right in his two judgments -- that Canada and the US will never embark on a carbon tax or ETS, and that an international carbon trading regime is impractical, impossible to implement meaningfully and subject to endless manipulation -- then it follows that the Australian approach of a carbon tax and purchase of offshore carbon credits stands no chance of succeeding.
Mr Baird was toodiplomatic to comment directly on the Australian scheme, but the implications of his analysis are inescapable