Australia’s economic and political strategy: Deny climate change

coal-renew-150x150Australia over the past 24 hours has made its intentions clear to the world: Climate change is not a significant issue, and nothing will derail its goal to fully exploit its coal and gas reserves.

That is the inescapable conclusion of the Abbott government’s green paper on energy – supposedly designed to provide a long-term blueprint of Australia’s energy future, and of its message to the UN-sponsored climate summit in New York. If the repeal of the carbon price, and the determination of the government to dismantle the renewable nervy target and other climate and clean energy institutions did not make it clear enough, then these last two events certainly punctured the rhetoric that might pretend otherwise.

The green paper – as we outlined on Tuesday – is almost entirely focused on the ability of the fossil fuel industry to extract coal and gas, and for their possible replacement in the future by nuclear. Wind and solar and other renewables are marginalised – the department of energy that lies within Ian Macfarlane’s broad Industry portfolio thinks that they are only useful, at best, in off-grid and edge of grid applications.

The green paper does this by virtually ignoring the potential of climate change to impact Australia’s domestic energy market and its exports, and by not even countenancing the competition of renewables on the basis of costs. Climate change is mentioned only six times in the green paper, and its potential impact on Australia’s electricity market – which accounts for one third of the country’s emissions – and its exports, is dismissed in a single paragraph that concludes that post-2020 climate change commitments “could have implications for the composition of the global energy mix.”

Could have?

Julie Bishop’s speech – you can read it in full here –pretty much reaches the same conclusion as the green paper. It is striking for its lack of ambition; it ignores the government’s own advice (from the Climate Change Authority) that it should dramatically increase its targets, and puts the emphasis only on economic growth. It is completely out of step with the rhetoric of other major nations.

In other words, as other ministers from PM Tony Abbott through Treasurer Joe Hockey, Industry Minister Ian Macfarlane and environment minister Greg Hunt have stated, the primary concern is that of fossil fuel extraction and fossil fuel exports, despite the fact that Australia has zero ability to influence ultimate demand.

In effect, Australia has redefined its national priorities: Those priorities are no longer to protect the country, its economy and its people from the impact of climate change and help limit warming to 2C. It is to protect the interests of the fossil fuel industry.

Australia is punting its future on the premise that Coal will remain King. And apart from a few sympathisers such as his international “bestie”, Canada’s Stephen Harper, and his not-so bestie, Russia’s Vladimir Putin, it is completely out of step with other nations.

Given that Abbott has made security and counter terrorism activities his single biggest priority – and deliberately avoided the UN climate summit – the words of US president Barack Obama were an interesting counterpoint:

“For all the immediate challenges that we gather to address this week – terrorism, instability, inequality, disease – there’s one issue that will define the contours of this century more dramatically than any other, and that is the urgent and growing threat of a changing climate,” Obama said.

“No one can stand on the sidelines any more.”

Yet that is exactly what Australia is doing. The New York summit may be downplayed some for its failure to elicit binding promises – 350.Org’s Bill McKibben borrowed a baseball analogy in describing Obama’s actions as a “bunt for a single” when the team is down 10 runs in the 9th innings – but that was never the point of the summit.

The purpose, as defined by UN secretary general Ban ki-Moon, was to develop momentum and to galvanise political and public attention. That it did, with more than 400,000 marching in New York, and 120 leaders attending.

The actions of China – now the largest polluter – remains the key. Over the past five years it has rapidly evolved its position from one that counted on others to act, to one where its own actions could help deliver a more ambitious climate target than anyone thought possible.

At the summit, China made clear its intentions for a national emissions trading scheme, to put a cap on total energy consumption, to vigorously develop renewable and other clean energies in a move away from fossil fuels, and to reach “peak” emissions.

Numerous studies in recent weeks have pointed to how emissions can be dramatically slashed – and meet the 2C target to which Australia is a party – without threatening economic growth.

It requires, however, as the research by Nicholas Stern, Jeffrey Sachs, and Australia’s Climateworks have pointed out – investment in new technologies, and a recognition that economic opportunities lie in the new, rather than the old.

And that money is starting to flow and it is looking for a home. Fund managers want a carbon price, and are looking to develop a huge green bond market. Even the Rockefellers are dumping fossil fuels in favour of renewables. As Frank Pegan, the CEO of Catholic Super, a $5 billion fund, told a media conference in New York: “Investors are looking for opportunities. Carbon pricing will open up a completely new market for investors. It could be trillions of dollars.”

Not, it would seem, in Australia just now.

 

 

Comments

32 responses to “Australia’s economic and political strategy: Deny climate change”

  1. Barry Avatar
    Barry

    A possibly more important thing that happened in the same 24 hour period was the Rockefellers announcing that they would divest from fossil fuels, especially coal, and invest in clean technology. What do they know that our Government does not?

    1. john Avatar
      john

      In the scheme of things just remember AU is a tiny place with zero significance and yes correct the divestment of some $59b from fossil to other investments is rather significant

      1. Barry Avatar
        Barry

        In the scheme of things remember AU is one of 30 countries that are each responsible for 1% to 2% of global emissions, which include the UK and Korea. All together these 30 countries are responsible for about 40% of global emissions. If we all avoid our individual responsibility and free ride off the efforts of others then we won’t achieve the reduction in emissions required to avoid increases in global temperatures about 2 degree. Further, we should consider the opportunities this provides. Developing and integrating solar into energy systems is going to be a massive market – one in which AU could be a world leader rather than seeing itself has having zero significance. As for the Rockefellers annnouncement, that will trigger many other investors to examine closelye why they are divesting from fossil fuels and investing in clean tech.

        1. john Avatar
          john

          Absolutely Australia is so dragging the chain.
          This country has so many riches to exploit to deal with mitigating our energy mix. Without a doubt we have perhaps the best situation to utilise our natural recourses in solar in wind in geo thermal in our very high level of research.
          We should be a country that is able to go to zero in a very short time because of the above riches.
          I absolutely agree with you AU is so dragging the chain.
          The announcement on the divestment by the Rockefeller Fund is rather significant as it sends a very clear message from an old historical identity that they are moving on just remember this is the outcome of the first monopoly ruling

        2. Peter Lyons Avatar
          Peter Lyons

          Barry you are absolutely right. The fossil-fuel cheer squad keeps telling us Australia’s emissions are a drop in the ocean, so anything we do to cut them will make no difference. This is an amoral and bankrupt argument for at least three reasons. First, since all the other one- and two-percenters could make the same weaselly excuse, this would collectively mean 30-40% of world emissions would be ignored. Second, the climate neither knows nor cares where the emissions come from. Every country needs to pull its weight. Third, if Macfarlane and Newman succeed in their manic desire to flog every last lump of coal and molecule of LNG, Australia’s contribution to worldwide emissions will be much more than 1.5%.

      2. rosshas Avatar
        rosshas

        .003 % of the population. 1.5 % of CO2 emissions. Says it all.

    2. Miles Harding Avatar
      Miles Harding

      The answer is probably nothing. It’s that they choose to act.

  2. johnnewton Avatar
    johnnewton

    I wonder how long they can ignore reality? Business will surely get impatient with these idiots

  3. Phil Gorman Avatar
    Phil Gorman

    Blind folly and wilful ignorance alone cannot explain this Government’s
    intransigence. It takes 19th Century laissez fair economics and rule by corporate interests to inform their raison d’etre. Their slavish adherence to the diktats of the IPA agenda is a betrayal of Australia’s people and utterly opposes our national interests.

    The truly astonishing thing is that the electorate is so easily gulled by corporate propaganda. People will actually vote against their own interests. This is where our democracy has finally been broken; in the blind folly and wilful ignorance of so many Australians. I grieve for our country.

    1. john Avatar
      john

      Mate they get their info from the shock jocks and other drivel outlets like Fox so what on earth would you expect. If your told all the time that this climate thing is a scam you believe it

      1. rosshas Avatar
        rosshas

        They don’t want the facts to get in the way of a beautiful story (for a few).

    2. rosshas Avatar
      rosshas

      Spot on Phil. So lets make sure we inform the vote to get rid of him and his kind.

  4. Thylacine Avatar
    Thylacine

    I am struggling to understand what the basis is for this government’s policy on energy. Is it just that they are ‘locked in’ to their stupid ‘Axe the Tax’ sloganeering or do they sincerely believe that fossil fuels are best for our long term future. The cynic in me believes there is a connection between the fossil fuel industry and the Liberal Party that obligates them to pursue this policy with such fundamental zeal.

    1. john Avatar
      john

      When you use the slogan “Axe the Tax” there is NO going back

    2. Adam Lucas Avatar
      Adam Lucas

      Have you been following the ICAC proceedings over the last 12 months? Clearly, it isn’t just the Liberal Party that likes playing footsy with the fossil fools. Can anyone remind who Martin Ferguson is working for now?

  5. rosshas Avatar
    rosshas

    AUSTRALIAN MINING MAGAZINE ARTICLE

    Coal will be continue to be king in world energy production:
    Rio Tinto
    10 September, 2014 Vicky Validakis

    Rio Tinto’s energy boss said coal will remain the number one
    energy source for decades to come but said the technology needed to be cleaned
    up to help fight climate change.

    Speaking at a business lunch in Sydney, Harry Kenyon-Slaney
    said energy security was a top priority for countries and ranked as high as
    water and food security in the priority list.

    Like others working in the coal sector, Kenyon-Slaney said coal would continue to help modernise areas in nations such as China and India where “having once experienced a modern industrial economy, they will not surrender it”.

    “All these people – and the world still has a couple of billion more who aspire to it too – now have the same expectation as you or I that when they press that switch by the door, their lights will come on,” Kenyon-Slaney said.

    And with this demand, coal is set to “light up” darkened parts up the world for decades to come.

    “The world needs to generate enough energy in coming decades to support modernisation and equitable progress for all nations. The alternative is economic stagnation with the social and political unravelling that always follows.

    “Put simply, that all-important requirement – for large-scale, reliable, affordable energy – means one thing only. A great deal of it will be generated from coal.

    “That’s because coal is abundant – with estimated global reserves plentiful for more than another century. However, Kenyon-Slaney was upfront about the need to tackle
    climate change which has said “is real, is upon us and must be addressed”.

    He said while there was no “silver bullet” answer, developments in Carbon Capture and Storage technologies were showing promising signs of ramp-up to commercialisation.

    “By the end of last year there were 12 projects demonstrating CCS internationally, that can permanently store 25 million tonnes of CO2 annually,” Kenyon-Slaney explained.

    “This has the same effect on global emissions as installing 13.6 GW of photovoltaic solar panels.

    “To underline the scale of this, that’s the solar power capacity of the USA, the UK and France, combined. From 12 demonstration projects. The potency of CCS becomes clear.”

    He said the challenge of comercialisng CCS is one the world needs to tackle, but doesn’t think it is realistic for Australia to launch into a huge process to try and commercialise it.

    “It has to take place in areas where capital costs a low and where there’s a significant growth in energy demand.

    “The challenge here in Australia is to make sure we are ready to utilise it when it has been commercialised and that really means focusing on the geological storage aspect of CCS and there’s plenty of work going on in that field.”

    The Rio executive said all forms of energy sources would be important contributors to the mix going forward, including wind, power, solar power and hydro power – but coal will remain the number one contributor.

    “Wind has its place and solar has its place. But it’s my contention that the base-load, the heavy lifting of supplying that reliable power and making sure that everybody around the world can turn on their light switch reliably will be founded on coal and we must clean up coal and there is a way of doing so.”

    While he wouldn’t be drawn on price estimates for thermal coal, Kenyon-Slaney said an oversupply had led to a very challenging industry.

    “Producers here and around the world have taken an axe to their costs and they’re fighting to survive,” he said.

    However Kenyon-Slaney remained optimistic about the future of the sector and said the demand for thermal coal continues to rise and the orders continue to come in.

    “We believe that over the long-term there is a bright future for thermal coal.”

    MY RESPONSE

    As the CEO of a large coal mining enterprise it is not surprising that Mr.Kenyon-Slaney is putting his hopes on CCS. CCS is one of the very few strategies left to avoid stranded assets but despite the billions of dollars being invested by companies and taxpayers to ramp up this technology it will at best slow coal’s demise..

    With the divestment (away from fossil fuels) movement gaining pace and the increased realisation that coal is an out of date technology for supplying new energy, fossil fuel companies need to focus on embracing some of these new technologies and not defending business as usual.

    For the moment the fossil fuel industry and their lobbyists have significant influence over government but communities are waking up to the fact that traditional energy sources are health hazards, inefficient, increasingly expensive, wasteful and impoverishing the communities that rely on them.

    Voters will increasingly demand access to clean, reliable, renewable energy sources that can be owned locally. The tide has turned and if Rio and others don’t realise it then they will disappear – well before Mr. Kenyon-Slaney’s 100 year time frame.

    Company directors have a fiduciary responsibility to maximise returns to shareholders. Committing to the ongoing development of fossil fuels will land them in trouble.

    1. Miles Harding Avatar
      Miles Harding

      Could it be that there is a *little* surprise waiting for our colossal fossil fools?

      There is usually no mention of the costs of adding CCS to coal power. It will something like 30% more coal being needed to run the CCS part of the operation, good for the coal miner, but I suspect that the additional costs will make the entire CCS venture nonviable.

      This reminds me of one of despair.com’s demotivational on government:
      http://demotivators.despair.com/demotivational/governmentdemotivator.jpg

      1. Barry Avatar
        Barry

        When ever I see these I am reminded how at the beginning of the GFC so many people in the US who joked for decades that the scariest words you could ever hear were “I’m from the Govt and I’m here to help” repeatedly went to the Govt begging for help

    2. Henry WA Avatar
      Henry WA

      Please note the giveaway qualification in Kenyon Slaney’s speech
      “It (CCS) has to take place in areas where capital costs (are) low and where there’s a significant growth in energy demand.”
      In other words, it must first take place in developing countries who cannot afford it – the rich countries should wait until it has been commercialised, is cheap and is found to be effective. In other words never.

      1. rosshas Avatar
        rosshas

        Exactement !

  6. Chris Fraser Avatar
    Chris Fraser

    But what they do not understand, is that investing in renewable energy IS conducive to economic growth. Clearly it isn’t the Rockefellers whispering in their ear …

  7. Graeme Henchel Avatar
    Graeme Henchel

    No doubt in ten years time after Abbott has been rejected to the dustbin of history and the realities of the renewable energy world are evident for all to see. Abbott will do an interview and say he is now “embarrassed” that he had it so wrong.

    1. john Avatar
      john

      how very astute of you Graeme having heard the John interview

    2. rosshas Avatar
      rosshas

      Beautifully said. Please send it to the newspapers as public comment.

  8. Rob G Avatar
    Rob G

    One has to ask why this government are so absolutely addicted to fossil fuels. Do they really think it is in the interests of Australia and that voters here will be happy with this move? No, I don’t think so. I recall when Rudd beat Howard, that the public were already concerned about climate change. Rudd’s first task was to sign the Kyoto Protocol in 2007. Today, public awareness is greater and climate change is more obvious. Somehow we got stuck with a government that is even more climate hazardous than Howard ever was. They parade their apparent ignorance as proud as can be, with Julie Bishop trumpeting to the heavens of our commitment to a 5% emissions reduction. Is this all a charade?

    I can only conclude 2 possible scenarios for this pigheadedness. 1. (Most likely) that they Liberal party have recieved an insane amounts of money for fossil fuel interests OR 2. That someone has made very serious personal threats towards individuals within the parties. Sure this is speculation, but really why are they doing this?

    I simple cannot accept the explanation that these guys really don’t believe in climate threats – nobody can be that stupid in this day and age. They are aware of it – heck even big coal is aware of it. They are wilfully pushing Australia back into fossil fuel land and actively destroying renewables. That takes more than just a belief or not in the science, it takes something like bribes or threats as far as I can see. It might be time for ICAC or the federal police to step in…

    1. john Avatar
      john

      or
      3 they are actually so Science dumb they have been informed by Rupert who told them that only 33% of change is man and that is in dispute.
      I was almost going to say that the person may have a problem with his logic so I will just say perhaps the Fox New outlet may have had a persuading input.
      For those who have no idea what I mean perhaps 1 plus 1 = -3 is about the outcome from this mob of clowns.

    2. Daylight Times Avatar
      Daylight Times

      The Australia Liberal Party is said to have received about $900,000 in donations from the fossil fuel giants prior to the Abbott victory – Vote them out ASAP!

      1. Rob G Avatar
        Rob G

        That’s $300,00 each elected a year (3 years) to ruin Australia’s renewable movement and make Australia a Banana republic in the eyes of the world. Insane. You can hardly buy a house for that in Sydney. There will be documentaries in the future on this debacle, its our very own watergate.

  9. Chris Fraser Avatar
    Chris Fraser

    Clearly with those targets, Australia is not a leader, it’s more like a cautionary tale.

  10. Marg1 Avatar
    Marg1

    Abbott and his cabal of fossil fools should be tried for crimes against
    humanity. He is an evil and dangerous creature. The sooner he is caste
    out and gone from politics the better off ordinary Australians will be.
    People – write or talk to your local Federal members telling them that
    you want them to act now on AGW, make them listen to us.

    1. rosshas Avatar
      rosshas

      Agreed. Good on you !

  11. Les Johnston Avatar
    Les Johnston

    Best analysis of COALition ideology. Election funding support from the fossils is a major driver. Federal ICAC – Commission of Inquiry required for the truth to be revealed.

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