Calls for Morrison to end fossil fuel stimulus, redirect funds to clean tech

There are fresh calls for prime minister Scott Morrison to place support for clean energy, and measures to account for fossil fuel subsidies, at the heart of economic stimulus measures being introduced as a result of Covid-19.

Professor of political philosophy Jeremy Moss, of UNSW Sydney, has argued that following parliament’s passage of the largest ever spending commitment in Australian history, that it is a crucial time for governments to reconsider the effective stimulus being given to the fossil fuel industry.

“If Prime Minister Morrison really wants to lessen the impact of the coronavirus on Australians and save jobs, then this gross level of subsidies must be phased out. A$47 billion pa has the potential to sustain communities. That’s around 600,000 hospital workers for instance,” UNSW professor Jeremy Moss writes.

“It would also help retrain or provide generous redundancy packages for the relatively small number of workers in fossil fuel industries and their dependent communities.”

As reported by RenewEconomy last year, the International Monetary Fund estimated that Australia contributes as much as US$29 billion (A$47 billion) each year in fossil fuel subsidies.

Globally, fossil fuel subsidies exceeded US$5.2 trillion (A$8.3 trillion).

The subsidies range from direct government funding gifted to the fossil fuel industry, as well as a continued refusal to place a price on carbon emissions, despite their negative economic and environmental and health impact.

“Moreover, these subsidies produce very few direct jobs in fossil fuel extraction. According to the Australian Bureau of Statistics, there are only 64,300 direct jobs in coal, oil and gas extraction. And only around 10% of those employed in the coal industry are women,” Moss added.

“That means for every direct job in the coal, oil and gas industry, the governments of Australia spend A$730,000.”

“Shockingly, every Australian is paying A$1,832 per year for these subsidies compared to around A$78 as a one-off payment for bushfire relief or the $750 initial coronavirus support payment.”

Meanwhile, the latest figures for employment in the renewable energy sector show employment surging, reaching record levels in the 2018-19 year, demonstrating the ability of the sector to deliver new jobs.

The latest ABS figures showed the renewable energy sector creating 5,770 new full-time jobs in the 2018-19 year.

Environmental groups have warned that the Covid-19 pandemic should not be used as an excuse to go soft on climate change action, as the issue of global warming will continue to be a real and present threat after the immediate threat of coronavirus subsides.

The next round of international climate talks has been delayed until 2021 as a result of the disruption caused by Covid-19, raising fears that governments may lose focus in a year when countries were expected to present updated and enhanced plans for reducing global emissions.

Professor Moss argues that Covid-19 creates an ideal opportunity for the federal government to reign in the effective subsidies gifted to the fossil fuel industry and redirect resources into more pressing concerns.

“When resources are so desperately needed for health and the broader economy these subsidies, that create few direct jobs in dying industries, are unconscionable,” Moss says.

“The coronavirus will force us as a country to re-evaluate how we distribute taxpayer funds. As the head of the International Energy Agency Fatih Birol notes, we now have a ‘historic opportunity’ to use stimulus to transition to clean energy.”

“Directing funds to companies that have had 30 years to prepare for the demise of their industry is simply throwing money away when it could be put to so much better use elsewhere.”

IEA head Fatih Birol himself issued a call for governments to place clean energy at the centre of any economic stimulus in the context of Covid-19.

Large-scale investment to boost the development, deployment and integration of clean energy technologies – such as solar, wind, hydrogen, batteries and carbon capture (CCUS) – should be a central part of governments’ plans because it will bring the twin benefits of stimulating economies and accelerating clean energy transitions,” Birol said.

“The progress this will achieve in transforming countries’ energy infrastructure won’t be temporary – it can make a lasting difference to our future.”

Birol echoed the call of environmental groups that the current period of economic disruption presented an opportunity for governments, and the energy industry, to lean into the clean energy transition and accelerate the decarbonisation of the energy sector.

“Governments can use the current situation to step up their climate ambitions and launch sustainable stimulus packages focused on clean energy technologies. The coronavirus crisis is already doing significant damage around the world,” Birol said.

“Rather than compounding the tragedy by allowing it to hinder clean energy transitions, we need to seize the opportunity to help accelerate them.”

The Australian  Greens attempted to amend legislation passed by the federal parliament on Wednesday that authorises the latest round of stimulus measures, to prevent some support payments from being directed to companies involved in oil, gas and coal extraction.

However, the Greens’ amendments were voted down in the Senate.

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