Morrison in denial as South Korea's net zero target adds to Australia's carbon export woes | RenewEconomy

Morrison in denial as South Korea’s net zero target adds to Australia’s carbon export woes

South Korea’s new net zero target adds to a drumbeat of death knells for Australia’s coal exports.


The ink has barely dried on the piece I wrote yesterday for RenewEconomy, in which I detailed how Japan’s newly announced net zero target for 2050 has significant consequences for Australia’s fossil fuel exports (notwithstanding the fact we need much more detail on these ambitions before we can bank them as certain). Today, South Korea has announced a similar target.

By my reckoning, that puts 85% of the total fossil fuel export revenue Australia earned in 2019-20 (for principal markets only) solidly into the ‘threatened species’ bucket – where customers may still be buying Australia’s fossil fuels right now, but have commenced the long process of figuring out how to ditch that substance entirely.

While there’s plenty of reason to take these ambitions seriously, there is definitely no guarantee of success, or even guarantee of a rapid pace of change. These three countries have not had particularly significant success over the past decade, with, surprisingly, China leading the three in terms of deploying renewables in a way that reduces the output of fossil fuels in their electricity sector, as shown in Ember Climate’s global electricity review:Of course, past performance is no reliable indicator of the near or mid-range future. The facts are relatively simple: for the world to keep the climate as safe as possible, the burning and extraction of fossil fuels need to hit a hard stop. Signals from investors, businesses, communities and industries around the world have been clear for some time, and these net zero announcements are reflections of a deep change that has been happening for several years. Far from being ‘virtue signals’ or empty promises, they might perhaps be better understood as reactive ‘symptoms’ – announcements that reflect a worried governmental acknowledgement of deeper shifts in energy economics that now have their own momentum, and that governments will now scramble to keep up with.

“I am not concerned about our future exports”, said Australia’s Prime Minister, Scott Morrison, in a press conference today. ” I’m very aware of the many views that are held around the world but I tell you what, our policies will be set here in Australia”, he insisted. It is a classic Morrisonism, in which he passionately argues against an argument that nobody was making. It doesn’t matter what Australia’s policies on coal and gas mining are. Morrison could happily subsidise all the coal and gas extraction in the country, but it would be fruitless if there were to be zero demand for the product around the world.

In a memorable display of truly awkward timing, the Minerals Council of Australia (the country’s core fossil fuel lobby group) released a new analysis insisting that insists Australia’s coal exports will continue to grow. The report file was created on the 25th of October, after China’s net zero announcement but prior to Japan and South Korea’s announcements.

“The report updates 2018 analysis of seaborne thermal coal demand in the Asia Pacific region to 2030 and projects that Asian thermal coal imports are expected to grow by more than 270 million tonnes (Mt) to 1.1 billion tonnes per annum”, the MCA cheerfully declares, accompanied by a stunning chart showing demand for thermal coal ballooning outwards over this decade:

It is a nice illustration of how fossil fuel companies see the future – as one in which their product continues to cause harm to society, unabated by the actions of governments, companies or people. ‘Net zero’ is nowhere to be found in the MCA’s predictions. “In the long term, government policy in relation to both energy sources and emissions reduction are important drivers of coal’s share of power generation and therefore import demand”, the reports author euphemistically add, right at the end. The report also pointedly highlights developing regions in Asia, such as Thailand, Vietnam, Pakistan and Bangladesh – as targets for the sale of future high-emissions, high-pollution fuels, as these regions develop and grow.

Of course, a ‘net zero’ world, in which countries act to quickly cut down on coal consumption to protect us from those climate impacts, looks completely different, as we can see in BP’s ‘Energy Outlook‘ report, released earlier this year (with limited countries in their data download, so only a selection of the countries above):

The Minerals Council’s tragic-comic timing has been missed by the coal mining company Adani, which declared on Twitter that “We welcome the @MineralsCouncil’s Commodity Insights Report released today that demonstrates there is a strong demand for thermal coal in Asia & India over the next 10yrs”. That tweet was posted only a few hours prior to publishing a five-tweet defence of secretly photographing the nine year old daughter of anti-coal activist Ben Pennings, as part of their process of suing him for opposing the Carmichael Coal project. The backlash against the company for these actions has been justifiably intense – a stark reminder of the extreme lengths that proponents of coal mining must now go to, to ensure a future for their operations.

The key question here is how long this grade of denial can last. More dominoes will fall, and most importantly, the actual burning of fossil fuels will – if things go right – begin to decrease far sooner and far faster than even the most optimistic projections. Australia’s exposure to this trend is increasing, but as that ratchets up the level of denial from fossil fuel companies and the country’s federal government increases too. Something’s going to give, and it is not going to be pretty.

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