Renewable energy technologies have become better and cheaper, but Australia’s politics haven’t embraced the energy market’s transition.
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Pixabay |
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Author
Grant Wyeth
is a researcher at the Asia Institute, University of Melbourne.
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However, the incoming administration of Joe Biden, who has plans to take the issue of climate change more seriously, will place greater pressure on Australia to do likewise. Canberra will find it difficult to avoid this state-level pressure; Australia will also face difficulties in avoiding pressure coming from the energy market itself.
Until recently, the global energy market was dominated by fossil fuels — for a long time, no other technology could produce energy in a cheaper way. However, over the past decade this reality has shifted. Renewable energy technologies have considerably improved and the cost of production and delivery has become much cheaper. In many places in the world, power generation from renewable energy sources is now cheaper than power generation from fossil fuels.
This trajectory could be maintained — and could flourish locally in a country
with geographic advantages for both solar and wind generation — if Australia’s
energy industry had a stable policy framework for the market to function
within. Yet the Australian government has persistently proved unable to
develop such a framework.
There have been attempts. The most
recent effort was the
National Energy Guarantee
(NEG). But these attempts continue to come against the internal politics of
the Liberal Party, making them impossible to implement. The NEG led to a party
revolt that
removed
Malcolm Turnbull from the prime ministership in 2018.
If we are being generous to the government, there are genuine economic
concerns for the regions whose economies are reliant on fossil fuel
generation. But any serious plan to combat the effects of climate change will
also address these regional economic effects, as the jobs created by the
renewable industry may not have the same geographic distribution as the
existing fossil fuel industry.
However, the Australian government
has refused to confront this reality, instead deciding to just kick this
problem down the road in the hope someone else will discover a solution. This
isn’t helped by there being distinct electoral calculations for political
parties attached to fossil fuel generating regions, especially
in Queensland, where Australian elections are typically won and lost.
Yet the Liberal Party hasn’t shown any similar concern for other industries whose decline has come via market forces. There were regions that relied heavily on the manufacturing of motor vehicles, but when the market no longer saw an advantage in manufacturing cars in Australia in 2017 the Liberal-led government did not seek to intervene.
This remains one of the great riddles of Australian politics: Why is the party
of free markets so opposed to the forces and mechanisms of the market in the
energy sector? The electoral calculations are understandable as political
parties will always place their ability to win votes above any philosophical
consistency.
But there is also something else going on, something
deeply psychological that is preventing the party from acknowledging the
reality of climate change. This is driving the Liberal Party to undermine its
own adherence to liberal economics by
protecting
industries that are rapidly
losing
viability.
In
an essay
I wrote for Quillette in September, I argued that the pace of change over the
past several decades has proved highly confronting to what British philosopher
Michael Oakeshott identified as the “conservative disposition.”
My broad argument was that it has been the mechanisms of
increasingly free markets driving this rapid economic and social change, and
it has been conservative parties themselves who have been the primary drivers
of these economic ideas and structures. The central point is that conservative
parties have failed to align their political ideals to their psychological
needs.
The threats posed by climate change are also highly confronting to those who
value stability and have an instinctive suspicion toward change in general.
The fear for those of a conservative disposition is that human beings will
need to reorganize themselves in such a dramatic fashion to mitigate the
effects of climate change that people’s current comfortable existences will be
upended.
Faced with this potential disruptive prospect, their
reaction has instead been to simply deny the phenomenon. This has led to
Australia’s conservative parties and their media allies developing a political
identity built around this denialism, making it now almost impossible for the
issue to now be approached as one of “economics and engineering,” as has
become the
common phrase used
by Turnbull.
The current trajectory toward more
affordable
renewable energy is a result of the energy market doing what conservative
parties over the past 50 years have told us that markets do: They find
solutions to problems and make these solutions cheaper and easier to access.
While these market forces do often extinguish industries and
impact regions that are reliant on these industries, they also offer
considerable new
opportunities, and in doing so they make humanity’s ability to confront its major
challenges often far less dramatic than they may otherwise be perceived to be.
Yet an obstinate government that actively seeks to hinder these
market forces will prevent Australia from taking advantage of these
opportunities, and increase the continued serious
threats
that climate change presents to the country, as well as to its more
precarious
neighbors.
Links
- Australia still back of the global pack on climate, despite best efforts of states
- Taylor avoids mention of bushfires as Australia given a zero for climate policy
- Chart of the day: Renewables are increasingly cheaper than coal
- How government strangled the National Energy Market
- 4 astonishing signs of coal’s declining economic viability
- Renewable Energy Is Now The Cheapest Option - Even Without Subsidies
- Renewable Energy Job Boom Creates Economic Opportunity As Coal Industry Slumps
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