Turnbull says gas is “bonkers”, Australia may have to face frontier carbon taxes

Former Bank of England Governor Mark Carney and former Australian Prime Minister Malcolm Turnbull swapped pleasantries and received wisdom this morning at the Smart Energy Council’s online Smart Energy Summit. But the biggest brick-bats were destined for Australia’s gas strategy and its lack of action on climate change.

Both Turnbull and Carney spoke approvingly of policy certainty as a necessity for a rapid transition away from fossil fuels, and Turnbull insisted that renewables and storage were clearly the cheapest form of new generation, particularly in Australia.

“That’s abundantly clear, especially so in Australia. And so the opportunity really is now to put aside all the arguments about how much we prepared to pay to save the planet,” Turnbull said.

“The answer should be quite a lot. But as far as electricity is concerned, we can have cheaper power and clean power. And what is all that is lacking is the opposition of really crazy ideological politics on the right. And in the media, and, of course, vested interests in the fossil fuel sector.”

Carney, like Turnbull a Goldman Sachs alumnus, is both United Nations special envoy for climate action and finance and finance advisor for the UK presidency of the COP26 United Nations Climate Change conference. He added that recent research showed that for every million spent, green projects created 4 to 5 more jobs.

Asked about the notion of a gas-led industrial recovery, Turnbull said there was no such thing as cheap gas on the east coast of Australia, because of the cost of getting it out of the ground.

“The mistake, the false premise there is that there is cheap gas. Now, there are people who are trying to persuade the government to literally spend billions and billions of dollars to pay for infrastructure to in effect, subsidise gas. And that is what is bonkers.”

Asked about government intervention and private investment, Turnbull said: “The problem with renewables for energy investment in Australia, any number of investors can confirm this is the uncertain political environment created by the, you know, crazy Australian climate wars, which we are all so exhausted by and that has made Australia a less attractive place for investment.

“One very large, one of the largest investors in renewable energy in the world market said to me not so long ago that they would not invest in Australia, because of the political uncertainty, they found China a more attractive than states stable environment for investment.

“So if we get the, you know, we get a stable policy environment without random interventions from government, disturbing and disincentivizing, the private sector, then I think we’ll get, we’ll get a lot more investment because the economics of it.”

Turnbull then pointed to the recent Integrated System Plan of the Australian Energy Market Operator, and its analysis that only by making some heroic assumptions about the cheapness of gas and the expense of charging batteries could gas be seen to be economically viable in 2030, either as a bridging or firming source.

Both Carney and Turnbull saw the prospect of the European Union (and perhaps others) creating carbon taxes for other nations not taking enough climate action as a real possibility, with Turnbull saying French president Macron had made that very clear.