Blog

As global supply chains pivot towards low-emissions production, Australia will need to lead, or risk being left behind. The country’s challenge is not a lack of technology, capital, or ambition. It’s a gap in policy architecture. Without bankable demand, Australia’s most promising clean commodity projects – green iron, sustainable aviation fuel, and clean ammonia – remain stuck at the starting line.

To meet that challenge, we propose a new demand-side policy model: the Clean Commodities Trading Initiative (CCTI) – a flagship example of green energy statecraft. At its heart is a new tool for national transformation: Clean Commodity Credits that reward innovation and emissions savings.

A market-friendly mechanism to kickstart large-scale clean production.

Green energy statecraft is a strategic approach to governance that uses the clean energy transition to simultaneously advance a nation’s economic, environmental, social, and geostrategic goals. Unlike conventional industry policy, which focuses on domestic market corrections, statecraft treats clean energy as key to national security and prosperity – used to build alliances, secure supply chains, boost productivity, and shape global rules.

The European Union, China, Japan, and South Korea are all pursuing variations of green energy statecraft. Australia must do the same – on its own terms, with tools suited to its advantages, institutions, and budget.

The CCTI is the tool for our times.

The CCTI is a market-friendly mechanism to kickstart large-scale clean production. Its core function is simple: government acts as an early buyer of clean commodities – not to stockpile goods, but to create the conditions for investment. Clean production projects face long lead times and high capital costs. But their biggest barrier is price uncertainty. Firms can’t justify investment if they don’t know whether the market will pay a green premium to offset higher costs. The CCTI removes that uncertainty. It contracts with producers to buy a baseline volume at agreed floor prices. These offtake agreements give developers and financiers the confidence to proceed.

But the real innovation lies in what happens next.

Upon purchasing clean commodities such as green iron, the CCTI would decouple the physical products from their clean attributes by creating Clean Commodity Credits, or Innovation Credits, since the clean attributes reflect not just lower emissions but innovation in production. This dual-market approach allows the physical commodities to be sold in conventional markets while the credits are banked or traded later.

A clean commodity contains two price components: the base cost of the commodity; and the cost of producing it with low emissions. This second factor – the “green premium” – raises prices above conventional alternatives. Clean Commodity Credits solve that problem. They let clean commodities enter traditional markets without the higher price tag. Meanwhile, the CCTI can offset its support costs by monetising the credits in flexible ways. As we argue in our new paper, it could:

• Bank credits for future sale as regulatory markets mature
• Sell credits into voluntary markets to recover costs
• Create bundled products combining physical commodities with clean attributes

This flexibility allows the CCTI to adapt as markets evolve, maximising taxpayer value while supporting market development. 

In effect, these credits create bankable demand for green innovation. They send a clear price signal – not just for carbon, but for the kinds of technologies, processes, and business models that will define the clean economy. They give governments a strategic mechanism to stimulate private investment and build advantage in future-facing sectors.

If Australia continues to rely on patchwork subsidies and fragmented supply-side measures, it will fall behind.

Traditional carbon markets, while important, work by penalising emissions. But in heavy industry, where low-carbon alternatives are still emerging, penalties alone often aren’t enough to drive change. Establishing a market for these credits flips the model. Instead of punishing laggards, it rewards leaders. Governments can set clean production targets – say, 30 per cent green steel by 2030 – and let firms meet them by innovating or buying credits from early movers. It creates a race to the top, not just a drag on the bottom line.

This model rewards firms that act now with firm demand at a price that justifies production – not in 2030 when carbon prices bite or regulation finally arrives. And it allows government to recover its support as credit markets develop. Once established, the same principle can apply to any product the government deems strategic, regardless of its carbon value. Thus Innovation Credits may be the better name.

Japan and South Korea, two of Australia’s key trading partners, seek long-term access to clean industrial inputs they cannot produce domestically. Australia, with its renewable energy resources and export capacity, is a natural partner. By embedding Clean Commodity or Innovation Credits into trade relationships – through joint offtake agreements, shared credit markets, or co-investment in CCTI-backed facilities – Australia can deepen economic ties and build geopolitical resilience. This is green energy statecraft in action: aligning clean industry development with alliance-building and regional stability.

The energy transition is a global race. Other countries are moving decisively. If Australia continues to rely on patchwork subsidies and fragmented supply-side measures, it will fall behind. The CCTI offers a smarter, faster, and more strategic path forward. It reflects the kind of governance Australia now needs: bold, integrated, efficient, and effective.

Green energy statecraft isn’t just theory. It’s practice. And with the right tools, Australia can lead.

This article relates to a Studies in Statecraft series from the Asia-Pacific Development, Diplomacy & Defence Dialogue (AP4D).

Dry eye disease (DED), a condition that is defined by disruptions to the tear film of the eye,¹ has recently increased in diagnosis rate, which can be linked to increasing awareness around the condition and greater use of laptops, phones, and TVs. According to Johnson & Johnson, up to 1 in 11 people are diagnosed with DED worldwide,² with 75% of ophthalmologists reporting more cases than 5 years prior. However, with the increased prevalence comes increased awareness and more treatments dedicated to mitigating the worst of the symptoms of DED.

DED primarily affects the tear film of the eye,¹ with any disruption to the tear film causing watering, itching, blurred vision, or burning sensations. Although each reason for DED is different, most cases of DED have to do with the eyes not producing enough tears or tears that evaporate too quickly, with some cases having both of these root causes. Aqueous deficient dry eye occurs when the lacrimal glands do not produce enough tears, whereas evaporative dry eye is linked to meibomian gland dysfunction causing the evaporation of the tears. To formally diagnose DED, ophthalmologists and optometrists may use the tear breakup time test, which tests how quickly tears evaporate, or the slit lamp test, which shines a light into the eye to examine the eyes and eyelids.

Meibomian gland dysfunction accounts for 86% of those who have DED, according to Johnson & Johnson,² making it a primary focus for treating DED, which primarily effects those 50 years and older. DED overall can be difficult to treat due to why dry eye presents itself. However, meibomian gland dysfuction does have a means of being addressed due to advances in care.

Perfluorohexyloctane ophthalmic solution (Meibo; Bausch & Laumb) has been approved by the FDA for use in dry eye associated with meibomian gland dysfunction.³ The twice-daily drop has been found to decrease the dryness of the eye when used regularly, as it prevents evaporation and stabilizes tears. Although this is the only treatment to specifically target meibomian gland dysfunction, there are other means of addressing chronic dry eye.

Treatments for chronic dry eye include lacrifill, 0.05% cyclosporine ophthalmic emulsion, 0.09% cyclosporine, 0.1% cyclosporine ophthalmic solution, lifitegrast, and varenicline. Lacrifill works through the injection of a hyaluronic acid-based gel into the tear duct so that natural tears are kept in the eye. The 0.05% cyclosporine ophthalmic emulsion and 0.09% cyclosporine were both created to target the inflammation of the eye through drops twice per day in each eye, although it can take 3 to 6 months before it starts to work. The 0.1% cyclosporine ophthalmic solution, by contrast, aims to increase tear production in the eye using the same active ingredient as the previous 2 medications but with a higher concentration and with a different delivery. Varenicline is a nasal spray that can be used to stimulate the production of mucin, oil, and tears, and it provides an alternative to those who would rather avoid eye drops.

Not only are there already treatments for DED that patients can use, there are also several treatments in development that may help to pinpoint the root causes of DED and address those areas of concern.³ An ointment produced by Azura Ophthalmics is currently being tested as a means of preventing the buildup of proteins in the meibomian gland ducts, which could produce healthier amounts of oil. Alcon is currently developing a drug, Acoltremon, that targets nerve cells in the cornea and eyelid to produce a cooling sensation that produces more tears. Both of these treatments have seen positive results in early trials.

As Dry Eye Awareness Month begins, it is important to be aware of the symptoms of dry eye so that they can be easily identified for those who may be living with DED without having a proper diagnosis. Speaking with an ophthalmologist or optometrist about any experienced symptoms can help the health care provider diagnosis the type of DED the patient has and recommend means of treating the condition that can improve overall quality of life.

References

1. Dry eyes. Cleveland Clinic. Updated June 20, 2025. Accessed July 7, 2025. https://my.clevelandclinic.org/health/diseases/24479-dry-eye

2. McCarthy LF. By the numbers: understanding dry eye disease. Johnson & Johnson. July 18, 2024. Accessed July 7, 2025. https://www.jnj.com/health-and-wellness/by-the-numbers-understanding-dry-eye-disease

3. Mukamal R. Improved dry eye drugs for 2025 and beyond. American Academy of Ophthalmology. January 24, 2025. Accessed July 7, 2025. https://www.aao.org/eye-health/tips-prevention/new-dry-eye-treatments-ocular-surface-disease