Energy White Paper: The true cost of backwards thinking | RenewEconomy

Energy White Paper: The true cost of backwards thinking

The federal government’s draft energy paper fails to factor in the cost of externalities, mainly health related, from fossil fuel mining and combustion.


The Draft Energy White Paper (EWP) displays a grave misunderstanding of energy issues in the 21st century. Energy policies which, in the past century, brought us a new and healthier life, particularly in the Western nations, are now recognised as the fundamental cause of global changes that have to be arrested if civilisation is to prosper in the true sense of the word.

The philosophy displayed in the paper’s foreword compounds the problem: that today’s affluence conferred by cheap energy has been built on environmental debt; the financial bonds for CO2 debt have been repeatedly rolled over and no one is yet repaying them. On this scale, Greece is but a pimple.

The cost of this increasing world debt is enormous and estimated by respected economist William Nordhaus, to be $4.1 trillion by 2050 if no action is taken – and, indeed, no effective action has been taken, as demonstrated by the uninterrupted annual increase in emissions.

Four priorities are defined: resource development for domestic use; resource development for export; finance for distribution; and finally, a carbon tax to drive cleaner energy.

The promotion of resource development has nothing to do with Australia’s energy security, because enough coal and gas is produced for domestic use. The need for massive export is questionable, due to global impact. The fact that resource development is listed as the first of the four priorities suggests that this document could have been written by industry, or US Senator James Inhofe, rather than our government:

Our role as an energy exporter can be further strengthened through the safe and sustainable development of our energy resources, creating jobs and wealth.

What should be the goals of an energy policy?

The building blocks of an energy policy must be based upon meeting goals of sound science and on true economic cost. Energy security is in this equation, but this must not include ‘security to do whatever the market wants,’ to provide energy for profitable market projects that unnecessarily increase the debt.

An essential goal is to meet the emission targets set by government, however meagre these are at the present time – and which will have to be much more stringent long before 2030, the intended time frame of this document. Indeed, there is now firm scientific opinion, led by NASA scientist James Hansen, that drastic action is vital by 2020.

A crucial building block is the renunciation of decisions on accounting systems that ignore true cost of energy. It is this system which has lead us to face a world temperature rise of 4°C this century. Now, we cannot change this outmoded accounting system overnight but we can make adjustments for it in our decisions on policy.

This can be best illustrated by analysing the cost of health impacts from past resource usage.

The word “Health” is mentioned only once in the 33 page Executive Summary, and in the 350 page doc it refers to the health of markets, economies and fuel sectors but public health is mentioned once in relation to fuel quality standards. Other references relate to occupational health and safety. On P93 it is stated:

Australia is a world leader in occupational health and safety performance in the mining industry, with a strong risk‐based regulatory regime focused on the identification, mitigation and monitoring of hazards at individual mine sites.

We agree, but the public health safety around some of these mines is appalling.

Policy based on the lie of costs; health

The comprehensive study on the externalities, mainly health costs, from coal mining and combustion in the USA assesses the true cost of electricity as two to three times greater than at present. This erases the supposed cost advantage of coal. The EWP ignores this fundamental issue.

These costs are incurred from pollution causing cardiorespiratory and other diseases, and by reduced life expectancy, which has been demonstrated by epidemiological studies in the US and confirmed in other countries.

The benefits of reducing air pollution have been clearly demonstrated in Europe and the US. In the US, the EPA has calculated that $30 is saved for every $1 spent, saving $2 trillion per year by 2020.

In Europe the EEA estimated the cost of air pollution in 2009 to be between €102 and €169 billion. In Australia, 2.3 per cent of all deaths are attributable to air pollution, while the combined economic costs from lost productivity, health and welfare due to burning fossil fuels run into billions – $4.7 billion per annum in the Greater Metropolitan Sydney area alone.

There is the huge additional debt of world pollution from emissions that the Australian policy of export ignores. Science tells us of the overall impact, but the health impact is already considerable, and the international death toll from each new mine can now be equated from WHO data. The resulting economic loss is rising rapidly and the EWP should be cognisant of these issues and should detail them.

Now, it would be foolish to believe that the coal industry could be replaced by a masterstroke of accounting reform, but it should be accepted that the only reason for expansion might be export to developing countries struggling to provide electricity to poor populations.

But by accepting the reality of true cost, including those paid by the community in suffering and health problems, the EWP should define those measures that can be taken now to move towards parity. These are:

– Withdrawal of all subsidies to fossil fuel industries;

– Introduction of producer-pays monitoring of all existing and projected coal mining and combustion projects;

– Introduction of producer-pays, but independent, national EPA and health impact assessment processes.

These measures would raise Australian standards to those of many other developed countries and would begin to reduce the health burden on coal communities around the nation.

The health costs of the gas industry

The gas industry has the similar debt and health impacts as the coal industry though the components of the debt vary. The EWP is so out of touch with scientific reality and so ridden with misleading statements that it undermines its credibility. It is interesting to read:

The regulation of new industries such as coal seam gas should beconsistent and based on sound scientific information regarding potential impacts. This includes impacts on human health and safety as well as environmental impacts such as air and water quality.

Better understanding of Australia’s groundwater resources and the impact of energy related developments and other human activities is increasingly important.

To date there has been approval and investment of billions of dollars without any health investigation of potential health impacts. It is unacceptable, therefore, that definitions provided in the draft EWP, allow gas (and CCS) to be considered as as “clean and sustainable” energy solutions.

Indeed the expansion of gas is repeatedly promoted as a method of reducing Australia’s emissions. To this end its further development is given special treatment.

But gas is neither clean nor sustainable. Replacing coal with unconventional gas has been shown to increase climate change in the short term with net benefits only occurring after a century. There are also significant concerns regarding local air pollution, the potential for water contamination and over- extraction, air and soil pollution, adverse social impacts and damage to agriculture, tourism and marine environments.

Potential social and health externalities deserve serious consideration and due to the irreversibility of food and water security should not be undertaken without a thorough, long-term confirmation of safety.

Some conclusions

The fundamental inadequacy of this EWP are emphasised by statements such as:

Australia must have a mature debate about our energy sector and implications of different decisions. This means there must be a deeper community engagement in energy policy issues and outcomes. This includes ensuring that consumers have appropriate understanding and awareness of energy issues (energy literacy) to empower them to engage and participate in energy markets.

The EWP is not the basis for mature debate, for much of it is erroneous. Deeper community engagement is required, but there can be no informed debate without full disclosure and consideration of all energy costs.

The “appropriate understanding and awareness of energy issues” must extend to government, which must rid itself of misconceptions. For example:

There is a growing need to build further community support, understanding and engagement around critical energy sources such as coal seam gas and geothermal as well as build support and understanding of important technologies, including carbon capture and storage.

To suggest that the community concern and lack of support can be overcome through promotion of industry is arrogant and ill informed. It puts the cart fairly and squarely before the horse and undermines any open and genuine attempt to assess the real risk environment and health consequences.

This EWP is adverse to national and international needs. It is surprising that it has emerged from a government that eschews human rights and values health and environmental sustainability.

In our opinion, it should be rewritten with the assistance of other interests and departments and in addition to fossil fuel interests these should be health, environment, agriculture, renewable energy science, climate change science and ‘irrational’ economists.

In the US, to counter fossil fuel industry attacks on climate change legislation, the Obama administration has developed logical energy policy, supported by the national EPA, to reduce emissions. Australia unfortunately does not have the same options to balance increasing obstruction from the states.

In the EWP, it is stated that:

There is international recognition that addressing climate change is a first‐order challenge, and reaching a binding and effective international agreement on emissions reduction targets remains a critical goal.

But the EWP has failed to address this critical goal by not recognising that emission reduction outcomes are determined by policy directed to existing sources rather than simply leaving renewable energy to swim in a polluted sea with subsidised sharks.

George Crisp and David Shearman are members of Doctors for the Environment Australia  – To read their full analysis of the Draft Energy White Paper, click here.

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1 Comment
  1. Michel syna Rahme 9 years ago


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