14/02/2021

(AU) ‘Real Struggle’: Map Shows Silent Crisis Threatening Australia

Yahoo News - Nick Whigham

Australia is facing an uncertain future when it comes to our continent’s most precious resource – water.

That’s the daunting warning laid out in a draft report on Thursday by the government’s Productivity Commission which highlights the immense challenges facing the nation as it looks to reform national water policy.

If not, a grim future awaits.

The twin trends of population growth and climate change mean Australia’s drying continent will struggle to cope with our future needs as water scarcity becomes an increasingly pressing issue, the major review finds.

In a worst case scenario imagined in the report, demand for water in the city of Melbourne could outstrip supply in just seven years.

Water has to be stored, distributed as needed and carefully managed. Water is heavily used in some areas while in others the percentage used is fractional. Source: PC      LARGE IMAGE
“In major cities where readily-available supply sources have already been accessed, ongoing population growth is likely to create significant pressure on water supplies,” the report says.

“Scenarios developed for Melbourne, for example, include a worst case of demand outstripping supply by around 2028.”

Signed in 2004 during the Millennium drought, the National Water Initiative (NWI) has been credited with positive changes in water usage by placing caps on how much water can be taken from river and groundwater systems, improving industry efficiency, and allocating water for the environment. However, the review found the NWI had “reached its use-by date”.

“If we look at the current NWI, it really will struggle in the face of our future challenges,” Commissioner Jane Doolan said.

Climate change central to Australia’s looming water woes

The draft report into the NWI, a federal-state reform agreement which has informed water policy for 17 years, urged governments to make climate change a top consideration with severe droughts and floods set to increase.

“Climate projections point to hotter, drier and more extreme weather — particularly in southern Australia. This will likely mean material reductions in water availability for most of the country and an increase in the frequency and severity of droughts and floods across the nation,” the report says.

Median projections of percentage change in average annual rainfall, potential evapotranspiration and run-off in the coming decades show a drier continent. Source: PC       LARGE IMAGE
Planning will need to include climate and population growth, which are set to sap the amount of water available for the environment, urban populations and farmers.

Ms Doolan said an estimated additional 11 million people would be living in Australia's capital cities by 2050.

“The NWI needs to be refocused to provide strong guidance on how to adapt water management to best meet our needs in a changing climate,” she said.

“The droughts and water scarcity experienced during the past 20 years are likely to be a harbinger of things to come.”

Urban water management will become increasingly important in the years ahead. Source: Getty

The report insists on a greater focus on urban water management, a more stringent economic criteria for projects, and the end of special treatment for mining and fossil fuel companies.

Among the recommendations is a call for mining and petrol companies to no longer be exempt from planning requirements faced by farmers and other water users.

The report also calls for Indigenous people to be given a greater say in water use to support cultural objectives and economic development.

Federal government slammed for inefficient water strategy

The draft report also launches a scathing assessment of governments' funding decisions around dams, weirs, pipelines and other water infrastructure projects.

It finds seven projects received federal funding without businesses cases or environmental approvals.

The Rookwood Weir in Queensland is used as an example of a funding commitment at odds with Infrastructure Australia's independent project evaluations.

The harshest criticism is reserved for the $484 million Dungowan dam near Tamworth in NSW, which is being funded on a 50-50 basis by the federal and state governments.

Dungowan dam near Tamworth was declared an expensive option to improve water supply. Source: WaterNSW

The dam is estimated to provide an extra six gigalitres of water a year with a current market value of $11 million.

Directly purchasing the same amount of water would cost two per cent of the dam.

Based on the cost of the dam, the extra six gigalitres would be valued at 44 times the current market rates for irrigators.

Prime Minister Scott Morrison and Nationals leader Michael McCormack have made separate funding announcements for the dam over the past 18 months.

The commission warns maintaining the same approach to funding water infrastructure will unnecessarily burden taxpayers.

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(AU) Carbon Tariffs: What Are They And What Could They Mean For Australia?

The Guardian - 

Several major economies and Australian trading partners are looking at introducing them. Adam Morton explains why

Countries that have pledged to be more ambitious in combating the climate crisis are looking at charging some products from countries not taking similar steps. Photograph: Dean Lewins/AAP
Countries that have pledged to be more ambitious in combating the climate crisis are looking at charging some products from countries not taking similar steps. Carbon tariffs, and what the Morrison government thinks of them, are in the news.

We know the minister responsible for emissions reduction, Angus Taylor, is “dead against” them. The trade minister, Dan Tehan, is concerned they may be a “new form of protectionism”.

But some experts say it is a matter of when, not if, they are introduced – and the Australian government and business community should be prepared.

What is a carbon tariff? Is it a carbon tax?

 In simple terms, it is a charge imposed on overseas businesses that make products that lead to greenhouse gases being pumped into the atmosphere but don’t face a cost for them at home.

Countries that have pledged to be more ambitious in combating the climate crisis are looking at imposing greater carbon costs on their own businesses to drive emissions cuts. But they don’t want locally made goods to be unfairly disadvantaged against overseas competitors.

The answer in some cases is likely to be a carbon tariff – or, if you like, a tax – charged on some products coming in from countries that are not taking similar steps to deal with climate change.

The idea is not to penalise the overseas companies or – as the Morrison government appears to be suggesting – to embrace old-school protectionism.

It is to level the playing field so local businesses in countries applying a tariff can compete while this vast global problem is addressed.

Who is doing it?

 No one just yet, but that may soon change.

The idea of carbon tariffs is not particularly new – there have been studies and proposals dating back years – but the global push to cut emissions has accelerated in recent months.

Several of the world’s biggest economies are now planning much deeper cuts in emissions under plans to reach net zero emissions by 2050.

The European Union and Britain both made commitments late last year to make significant cuts by 2030 (55% and 68% compared with 1990 levels, respectively).

Joe Biden has promised a 2030 target for the US before he hosts a leaders’ summit on climate on 22 April.

Australia’s major trading partners in Asia – Japan, South Korea and China – have set net zero goals for either 2050 or 2060 and each is considering what they will do by 2030, with announcements expected this year.

The EU is the most advanced in its carbon tariff thinking, with plans to introduce a system no later than 2023.

The European Commission president, Ursula von der Leyen, proposed a tariff – known as a carbon border adjustment mechanism, or CBAM – as part of a green deal put forward in 2019. The plan was strongly endorsed by the European parliament’s environment committee earlier this month, and is due to be tabled in parliament in June.

As explained above, the goal is to avoid emissions cuts on the continent being undermined when it brings in goods from countries that are not acting on climate in the same way.

The rationale is if it didn’t go down this path there would be a risk of “carbon leakage” – local production shutting down and moving to countries without strong climate policies. Obviously enough, this would do nothing to cut global emissions.

Revenue raised from the charge would be largely used to help pay for the EU’s green transition.

The EU has pledged its system will comply with World Trade Organization rules that aim to ensure fair treatment for all.

It means the tariff will be levelled only on big emitting industries that compete directly with local industries paying a carbon price. Those affected in the short term are likely to be steel, cement, chemicals and fertilisers.

The tariff is not initially expected to apply to industries that do not currently face a carbon cost under the EU emissions trading scheme, such as agriculture. That could change as steps are introduced to make deeper emissions cuts in the years ahead.

A short paper by advisory firm RepuTex noted the current EU carbon price is now about A$60 per tonne of emissions – more than twice what Australia’s carbon price reached before it was repealed in 2014 amid bad faith claims about its catastrophic impact.

It is forecast to hit more than $70 a tonne next year and keep rising.

What about countries outside the EU?

The issue has had a flurry of attention in recent days after reports the British prime minister, Boris Johnson, is considering using the presidency of the G7 this year to forge an alliance on carbon border taxes.

Bloomberg reported the proposal was in its early stages, and Johnson was more likely to push for an agreement in principle at a meeting in Cornwall in June than a binding commitment. The UK is pushing hard for stronger global action on climate in line with what scientists say is necessary on climate ahead of a major climate conference in Glasgow in November.

Johnson has been emboldened by Biden’s election. The new US president has promised to make climate a major priority this year, and already made a raft of executive orders that experts have described as “breathtaking”.

Biden’s election platform included a commitment to introduce a “carbon adjustment fee against countries that are failing to meet their climate and environmental obligations”. It is early days in his presidency and he is facing no end of major domestic issues, but watch this space.

The suggestion the G7 may reach an agreement on a carbon border tax accelerated further on Thursday when the Nikkei newspaper reported that Japan was looking at introducing one, with a decision expected by the middle of the year.

Are the proposed tariffs aimed at Australia?

 Not specifically. They appear mainly designed to deal with emissions-intensive goods from emerging economies, notably China and India.

But to stand up under the WTO they will need to be applied equally, so don’t expect Australia-specific exemptions.

What will it mean for Australian government and business? Tennant Reed, a climate policy expert with the Australian Industry Group, expects the EU carbon tariff to have little direct impact here in the short term for the simple reason the country sells few goods to the continent that compete directly with local industries that are caught by the EU emissions trading scheme.

Australia’s biggest single export to the continent is coal for use in steelmaking. It could be affected, but the actual cost would likely be quite small as the EU scheme does not cover “fugitive” methane emissions released during coalmining.

If Japan was to follow the EU’s lead it is possible some industries could be affected – agriculture, for instance – but coal and gas exports are less likely to be charged. Japan overwhelmingly relies on imported energy and there is very little local fossil fuel extraction to level the playing field with.

If China, which buys Australian coal and has its own substantial coal industry, were to head down the carbon tariff path it would be a different story.

The world is moving increasingly rapidly on climate, and what happens in the years ahead will turn largely on how the Morrison government (and its successors) act.

If Australia maintains its current increasingly isolated stance – claiming that climate change will eventually be solved through technology alone, and that businesses and consumers should not face anything that might be described as a tax or regulation that forces emissions cuts – the pressure from the international community is likely to grow.

It stands to reason that if more countries adopt carbon tariffs, more Australian industries will be hit. In the case of the US, aluminium imports could be affected if Biden follows through on his pledge.

But in the short term, the most clear impact if countries make good on their emissions pledges will be shrinking demand for Australia’s fossil fuels and carbon-intensive goods.

Thermal coal, used in power plants, is already in decline and that is expected to accelerate. Metallurgical coal for steelmaking and gas are not as immediately at risk but may follow sooner than the Australian political debate suggests.

Planning for that – and a world in which the global community expects the cost of emissions to be reflected in government policy – may be a good idea.

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Shift To Green Energy 'Could Cost Oil States $13 Trillion' By 2040

BBC News - Andrew Walker

Getty Images
A new report says that oil and gas producing countries face a multi-trillion-dollar hole in their government revenue.

The report from the think-tank Carbon Tracker looks at the financial impact as the world cuts back on fossil fuels.

It says some countries could lose at least 40% of total government revenue.

It estimates the cumulative total revenue loss for all oil-producing countries by 2040 will be $13 trillion (in 2020 dollars).

That is as efforts to contain the rise in global temperatures drive the decarbonisation of energy supplies.

Carbon Tracker describes its report as a wake-up call to oil producing countries and international policymakers. It says they have planned on the basis that demand for oil will increase until 2040.

But the agency warns that demand will have to fall to meet climate targets, and oil prices will be lower than oil producers and the industry currently expect.The report looks at what would happen to government revenues if the increase in global temperature is limited to 1.65C.

The $13 trillion figure for lost revenue is compared with what it calls "business as usual" expectations of continued growth. It includes countries whose economies are not dominated by oil - such as the UK, the US, India and China.

The main focus of the report, however, is a group for which the loss of oil income will be much more challenging, 40 countries it calls "petrostates".

Saudi Arabia relies of oil for 60% of its revenue. Getty Images
The predicted damage to government finances in these nations is stark; an average loss of 46% of oil and gas revenue.

The dependence on oil and gas revenue is very marked for some countries - more than 80% for Iraq and Equatorial Guinea. For another seven including Saudi Arabia the figure is more than 60%.

Some countries face very large losses of total revenue. For seven countries, including Angola and Azerbaijan the predicted loss is at least 40%. For another 12, including Saudi Arabia, Nigeria and Algeria it is in the range of 20% to 40%.

For some in the Middle East and North Africa, the effect is moderated somewhat because their low production costs would give them a more prominent role in global oil and gas supply.

There is also a concern about what the report calls emerging petrostates. What they have to confront is a loss of potential revenue from oilfields where development is planned in the coming years. Ghana, Uganda and Guyana are among the countries facing this risk.

'Diversification'

Some of the countries facing severe losses - from existing or potential oil and gas production - are among the poorest.

The report says diversification - of government revenue and national economies - is an urgent task. That will need to be tailored to the needs of each individual country but there are some steps it suggests will be of widespread use.

These include investing in education and improving the quality of government and the climate for business. Capital that is not invested in oil and gas can instead be used to invest in industries that are more resilient to the energy transition.

The report also says there is a strong case for the rest of the world to support this transition. It says there are moral reasons to do so as many of the countries concerned are so poor.

It would help get better climate outcomes. It could also help address the risk of petrostates becoming less stable. They could see social unrest as spending is cut or underfunded security services struggling to contain existing threats. 

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