Australia’s fossil fuel export trilemma

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It’s long past time Australia joined other countries and committed to no new coal mines or oil and gas wells,

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Australia has been ranked as the worst-performing country in the world on climate action, according to the Sustainable Development Goals (SDGs) Index.

In addition to having one of the world’s highest per capita domestic carbon emissions, the main reason Australia has fallen to dead last is that the SDG Index now factors in Australia’s colossal fossil fuel export footprint.

As the world’s largest coal exporter and 4th largest liquid ‘natural’ gas exporter, Australia’s annual exported CO₂ emissions are 44 tonnes per person, greater than even Saudi Arabia’s 35.5 tonnes per person, and much larger than the US’ 710kg per person.

Australia’s fossil fuel exports have put it deep into the negative ledger for what the SDG index terms spillover effects, which are effects that that countries have on other countries’ ability to meet the SDGs.

The spillover effects of Australia’s exports are making it harder for the world to meet the Paris Climate Agreements. Research shows that emissions just from the oil, gas, and thermal coal to be extracted from already-developed fields and mines would take the world beyond 2°C of warming above pre-industrial levels, and way beyond the much safer 1.5°C target.

Despite this, Australia plans to add billions of tons of new fossil fuel production to the mix, forcing the world increasingly into a trilemma where it must choose between 3 deeply undesirable options or some combination thereof:

A. The world burns all those fossil fuel reserves, pushing passed the Paris Climate Agreement targets, plunging us deeper into climate chaos;

B. The world acts on climate change, and much of Australia’s fossil fuel projects end up becoming stranded assets, thus leaving communities and workers stranded too; and/or

C. The world acts on climate change and other countries are forced to leave more of their fossil fuels in the ground to compensate for Australia’s increased fossil fuel exports.

Options A and B, futures defined by climate chaos and stranded assets, are clearly undesirable for the climate and for fossil fuel dependent communities respectively. Fossil fuel companies in Australia might prefer option C, where Australia gets to increase its fossil fuel production forcing others to leave theirs in the ground.

However, there are three major reasons that is a deeply undesirable option too, namely, it is economically efficient, it would undercut emission reductions efforts elsewhere, and it is unjust.

Firstly, Australia expanding its coal exports is simply not economically efficient. As research in the journal Nature shows, for the world to efficiently meet even a weak 2°C target, Australia would have to leave 90% of coal reserves in the ground.

This is because winding down coal burning is one the most cost-effective forms of climate action, such that burning Australia’s coal is simply not an efficient use of our remaining carbon budget.

Secondly, following the economics of supply and demand, increasing coal supply reduces the global price of coal, which means lower returns for other coal producers and a harder time reducing emissions as cheaper coal undercuts clean energy.

Whereas China and Germany have created a virtuous cycle by deploying solar and wind and bringing down the costs of the technology for everyone, Australia is putting pressure in the opposite direction.

By increasing coal supply, Australia is bringing the global cost of coal down, thus making it economically harder to transition away from coal, as cheaper coal undercuts other energy alternatives.

As research by Fergus Green and Richard Denniss puts it, to effectively act on climate, you have to “cut with both arms of the scissors”, reducing supply and demand. Unfortunately, Australia for the most part is cutting with neither.

Thirdly, Australia expanding its coal is inequitable. As a rich developed nation that has benefitted disproportionately from fossil fuel burning and extraction, and who can most afford the transition away from them, Australia has a moral responsibilityto lead in leaving fossil fuels in the ground.

If Australia and other similarly positioned countries, like Norway, Canada, Germany, and the United States do not act, they shift the burden onto countries who can least afford it, and who have contributed much less to the climate problem (whether through fossil fuel emissions or extractions).

As the world’s largest coal exporter and worst ranked climate actor, Australia has already shifted that burden greatly onto others by taking up much more than its fair share of the fossil fuels we can afford to burn and extract if we are to meet the Paris Climate Agreement target.Increasing the burden on others through increasing its fossil fuel exports would be unjust.

Just the coal in the Galilee basin would use up one-thirdof the remaining budget to keep warming to 2°C and much more of the smaller budget left to hit 1.5°C.

Like the Norwegian government, Australia might object that under the UN Climate Negotiations, their official responsibility is just to reduce domestic emissions, not fossil fuel exports.

Such an objection would ring quite hollow from Australia given that they are not even meetingand just jettisoned their incredibly weak domestic emission reductions targets – targets the Australia Institute has ranked as being deeply inadequate and unfair contributions to meeting the Paris Agreement targets on any recognized approach to justice.

Additionally, just because the UN does not currently count fossil fuel exports as part of a country’s official responsibility, does not mean that it should not be doing so – it can and it should.

In the end, if we are to avert increasingly catastrophic climate destabilization, then the world needs to leave fossil fuels in the ground regardless of whether the UN officially counts it or not.

Fortunately, countries around the globe are beginning to act, with BelizeCosta RicaFranceNew Zealand, and Denmark all having put in place moratoria on new oil and gas exploration, and even China has been curtailing domestic coal production.

It’s long past time Australia joined other countries and committed to no new coal mines or oil and gas wells, and the gradual phase down of exports in line with an equitable approach to meeting the Paris Climate Agreement targets.

If Australia doesn’t, they will be forcing the world deeper into an undesirable trilemma choosing between climate chaos, stranded assets and unjust climate action or likely some combination of the three.

Alex Lenferna is an Endeavour Research Fellow at the UNSW Practical Justice Initiative, and a Fulbright Scholar and PhD Candidate at the University of Washington Department of Philosophy. 
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