Former United Nations climate chief Christiana Figueres has repudiated Australian mining giant BHP for its refusal to stop mining coal, suggesting the decision is uneconomic and poor nations do not need the “toxic” and “expensive” fossil fuel.
BHP chief executive Andrew Mackenzie said this week the company is “not going to move away from coal mining”.
BHP Billiton chief executive Andrew Mackenzie says the company will continue to mine coal, despite climate change concerns.
His
position comes despite a warning last month by the Intergovernmental
Panel on Climate Change that coal must be virtually phased out by 2050
if the world is to keep global warming below the 1.5 degree threshold,
beyond which the effects of climate change would be catastrophic and, in
many cases, irreversible.
Addressing shareholders on Thursday, Mr
Mackenzie said BHP had a moral obligation to combat climate change, but
the developing world needed coal to lift citizens out of poverty.
“For many countries in the world, coal is still their cheapest source of energy, their most reliable source of energy,” he said.
“To
deny them that right away would run the risk of actually plunging them
... into poverty or preventing them from ever lifting themselves out of
poverty or even getting onto the grid.”
Mr
Mackenzie said BHP “will not be emitting any additional molecule of CO2
into the atmosphere from 2050 onwards”. This would occur by using low-
or zero-emissions power in its operations, supporting reforestation and
wilderness preservation and “just making everything much more
efficient”.
In response to the comments, Ms Figueres, the former
executive secretary of the United Nations Framework Convention on
Climate Change, said poorer nations did not need Australia’s coal.
“Developing nations will unlock the solutions to poverty with renewable energy. Not with toxic, expensive coal,” she said.
Former UN climate chief Christiana Figueres says the developing world does not need Australia's "toxic, expensive" coal. Credit: Reuters
Solar and wind power were already
cheaper than fossil fuels in many markets and “renewable energy will
out-compete fossil fuels everywhere by 2020”, she said, adding that
investors were “withdrawing from coal on all fronts”.
The World
Bank, among other financiers, has largely ruled out funding new coal
plants. It says coal contributes to poverty through air pollution, which
causes illness, and climate change, to which the poor are particularly
vulnerable.
Ms
Figueres, who led the Paris climate talks in 2015, said as well as the
health impacts, global warming was hurting the environment and
“contributing to the die-off of the beloved Great Barrier Reef”.
BHP
mostly mines coking coal used to make steel and iron. It also mines
thermal coal, which is burned for electricity. This includes the large
Mount Arthur mine in NSW, and a major stake in Colombia’s Cerrejon mine
where a massive expansion is proposed.
Mr
Mackenzie said there was “no real alternative” to coking coal, which
produces significant emissions when used to make steel. This meant those
emissions must be cut through carbon capture and storage, in which BHP
is investing, he said.
BHP boss Andrew Mackenzie says the company is committed to becoming carbon neutral by 2050. Credit: Bloomberg
Veteran physicist and climate scientist
Bill Hare, founder of international think tank Climate Analytics, said
renewable hydrogen could replace coal in steel production.
Such use of hydrogen is at the experimental stage, however, the capture and storage of carbon is also unproven at large scale.
“By
backing coal only weeks after the world scientific community has spoken
on the urgent need to phase this out, [BHP] is turning its back on the
future,” Dr Hare said, adding that claims coal was needed to overcome
poverty was “a denial of science”.
Meantime, the ACT is nearing its goal of sourcing all electricity from renewable sources by 2020.
The
Crookwell 2 wind farm, near Goulburn, has begun feeding electricity
into the grid and is expected to produce enough electricity to power
about 42,000 Canberra homes.
Federal
Energy Minister Angus Taylor, who has campaigned against wind farms,
did not attend a launch event on Saturday despite the project being
located in his electorate. A spokesman said Mr Taylor had a “prior
engagement”.
ACT Climate Change Minister Shane Rattenbury said the
wind farm was “a key milestone as we progress towards our ambitious
clean-energy future” and would provide significant flow-on benefits to
the region.
Extreme Ultraviolet Imaging telescope (EIT) image of the sun with a
huge, handle-shaped prominence, taken in 1999. Solar radiation is a
primary driver of climate.
Earth system science is the study of how scientific data stemming
from various fields of research, such as the atmosphere, oceans, land
ice and others, fit together to form the current picture of our planet
as a whole, including its changing climate.
Climate scientists separate factors that affect climate change into three categories: forcings, feedbacks, and tipping points.
Forcings: The initial drivers of climate.
Solar Irradiance. Solar radiation is the source of
heat for planet Earth. Scientists also use evidence from proxy
measurements, such as sunspot counts going back centuries and ancient
tree rings, to measure the amount of sun that reaches Earth’s surface.
The sun has an 11-year sun spot cycle, which causes about 0.1% of the
variation in the sun’s output.1 The solar cycle is incorporated into climate models.
Greenhouse gas emissions. Since the industrial revolution, concentrations of greenhouse gases such as carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O)
have risen in the atmosphere. Burning fossil fuels such as coal, oil
and gas has increased the concentration of atmospheric carbon dioxide
(CO2) from 280 parts per million to 393 parts per million.2 These greenhouse gases absorb and then re-radiate heat in Earth’s atmosphere, which causes increased warming.
Aerosols, dust, smoke, and soot. Very small airborne
particles come from both human and natural sources and have various
effects on climate. Sulfate aerosols, which result from burning coal,
biomass, and volcanic eruptions, tend to cool the Earth. Other kinds of
particles such as black carbon have a warming effect.3 The global distribution of aerosols is being tracked from the ground and from satellites.
Climate feedbacks: processes that can either amplify or
diminish the effects of climate forcings. A feedback that increases an
initial warming is called a "positive feedback." A feedback that reduces
an initial warming is a "negative feedback."
Clouds. Clouds have an enormous impact on Earth's
climate, reflecting about one third of the total amount of sunlight that
hits the Earth's atmosphere back into space. Even small changes in
cloud amount, location and type could have large consequences. A warmer
climate could cause more water to be held in the atmosphere leading to
an increase in cloudiness and altering the amount of sunlight that
reaches the surface of the Earth. Less heat would get absorbed, which
could slow the increased warming.
Precipitation. Global climate models show that
precipitation will generally increase due to
the increased amount
of water held in a warmer atmosphere, but not in all regions. Some
regions will dry out instead. Changes in precipitation patterns, such as
increased water availability, may cause an increase in plant growth,
which in turn could potentially removing more carbon dioxide from the
atmosphere.
Greening of the forests. Natural processes, such as
tree growth, remove about half of human carbon dioxide emissions from
the atmosphere every year. Scientists are currently studying where this
carbon dioxide goes. The delicate balance between the absorption and
release of carbon dioxide by the oceans and the world’s great forested
regions is the subject of research by many scientists. There is some
evidence that the ability of the oceans or forests to continue absorbing
carbon dioxide may decline as the world warms, leading to faster
accumulation in the atmosphere.
Ice albedo. Ice is white and very reflective, in
contrast to the ocean surface, which is dark and absorbs heat faster. As
the atmosphere warms and sea ice melts, the darker ocean absorbs more
heat, causes more ice to melt, and makes the Earth warmer overall. The
ice-albedo feedback is a very strong positive feedback.
Climate tipping points: When Earth’s climate abruptly moves between relatively stable states.
Ocean circulation. As Arctic sea ice and the
Greenland ice sheet melt, ocean circulation in the Atlantic may divert
the Gulf Stream. This and/or other changes would significantly change
regional weather patterns. A change in the Gulf Stream could lead to a
significant cooling in Western Europe. This highlights the importance of
ocean circulation in maintaining regional climates.
Ice loss. Due to the strong positive feedback of the
ice albedo, if enough ice melts, causing Earth’s surface to absorb more
and more heat, then we may hit a point of no return. Shrinking ice
sheets contribute to sea level rise. Many hundreds of millions of people
live near a coast, so our ability to predict sea level rise over the
next century has substantial human and economic ramifications.
Rapid release of methane. Deposits of frozen
methane, a potent greenhouse gas, and carbon dioxide lie beneath
permafrost in Arctic regions. About a quarter of the Northern hemisphere
is covered by permafrost. As the environment warms and the permafrost
thaws, these deposits can be released into the atmosphere and present a
risk of runaway warming.4
Footnotes
Claus Frohlich and Judith Lean, “Solar radiative output and its variability: evidence and mechanisms,” The Astronomy and Astrophysics Review, 2004, doi:10.1007/s00159-004-0024-1.
A. Vaks et al, "Speleotherms Reveal 500,000-Year History of Siberian Permafrost," Science, April 12, 2013: Vol. 340 no. 6129 pp. 183-186, doi: 10.1126/science.1228729
The Government has prioritised economically supporting the fossil fuels industry instead of tackling urgent climate change issues.
Pollution kills 9 million people annually yet our Government still won't act. (Image via Flickr)
AUSTRALIA'S CLIMATE CHANGE culture war is a hideous spectacle.
Despite the obvious reality of human-caused climate change and the
urgent need to act, the powerful fossil fuels industry (FFI) has
captured the Coalition Government to wring the last dollar of profit
from their soon-to-be stranded assets.
The Coalition has proudly undone policies designed to mitigate
climate change, notably in scrapping the carbon pricing scheme and
reducing the federal Renewables Energy Target
(RET). These government actions were driven by willful ignorance,
lavish campaign contributions and the persistent revolving door between
government and industry delivering financial reward and influence to
those eager to act against the common good.
One conservative ideological obsession is the incessant complaining
about subsidies to the renewable energy sector. Such support is provided
by federal and state RET programs, about $2.5 billion annually for
investment by the Clean Energy Finance Corporation (CEFC) and Australian Renewable Energy Agency (ARENA), and various initiatives by state governments.
Yet the same ideologues who stridently oppose renewable energy
subsidies remain silent or actively rent-seek for more support to the
FFI. Research demonstrates that FFI subsidies tower over those received
by renewables.
Negative externalities Externalities
are a cost or benefit imposed upon third parties who were not party to
the transaction that generated the cost or benefit. The FFI generates
negative externalities in pollution costs though few see how pervasive
these are.
There have been numerous studies published, typically in developed
nations, attempting to estimate just how widespread the costs have
become.
The following lists some of the research:
Globally, the FFI has looted
an average US$12.7tn (1995-2013) to US$27tn (1959-2013), rising to an
upper range of US$115.5tn (1995-2013) to US$246.1tn (1959-2013);
The single largest global externality
arises from coal power generation and, in aggregate, all externalities
equated to US$7.3tn or 13 per cent of global GDP in 2009;
The cost of coal in the U.S. conservatively doubles to triples the price of electricity from coal per kWh generated;
The U.S. EPA’s estimate of the social cost of carbon
of US$37 per ton was found to be a gross underestimate and instead
ought to be closer to US$220, demonstrating the costs are many times
larger;
If FFI externalities
were internalised, a gallon (3.8 litres) of petrol would cost an extra
US$3.8, US$4.8 for diesel and electricity generated from coal would rise
US24c per kWh and US11c for gas;
The total social cost of a gallon of petrol was estimated in a 1998 report at between US$5.60 and US$15.14, rather than the then market price of US$1;
Energy subsidies reached US$5.3tn or 6.5 per cent of GDP globally in 2015, with coal accounting for the largest portion;
A summary of 63 external cost estimates demonstrates coal, oil and gas have the largest maximum, mean and median costs in terms of cents per kWh generated;
The health costs arising from air pollution stemming primarily from the FFI in Australia has been estimated from $11.1bn to $24.3bn;
The cost of deaths from air pollution, mostly generated from coal
and oil consumption, was estimated at US$1.5tn in OECD nations in 2010
and US$5.8bn in Australia;
The cost of air pollution in the Greater Sydney area was estimated at a midpoint of $4.7bn annually between 2000-2002; and
Australia’s energy sector receives a carbon subsidy of between $14bn to $39bn annually, with the electricity industry accounting for between $7bn to $20bn.
There is no time series available demonstrating the ongoing negative
externalities arising from the consumption of gas and black and brown
coal in the generation of electricity nationwide, so I’ve developed a
general estimate. This report calculates
that greenhouse and health care costs amount to $52/MWh for brown coal,
$42/MWh for black coal and $19/MWh for gas in Australia. In 2017, these
costs amounted to $8.2bn for electricity generation alone.
This estimate likely understates the true cost, especially for gas,
given numerous other issues not considered. These consist of groundwater
pollution, permanent changes in groundwater pressures, risks of
desertification of large inland areas within a couple of decades,
fugitive emissions and, worst of all, the toxic by-product of contaminated salt.
Tax concessions
Australia’s tax concessions (tax expenditures) for the FFI are enormous, estimated at $11bn for 2018, sourced from Federal Government budget papers. This does not include state-based royalty holidays. As the IMF argued correctly, tax concessions compromise fairness, tend to be inefficient and poorly targeted and are vulnerable to industry lobbying.
Given Australia offers the largest tax concessions relative to GDP in
the OECD and the FFI already benefits enormously from polluting without
limit, no argument can be mounted to support them. Further, the nation
has lost around $90bn in rent resource taxes from the oil and gas industries.
Miscellaneous subsidies
There are numerous other supports
provided to the FFI. These mainly involve Federal and State Government
assistance via infrastructure, capital investment and research support.
The Export Finance and Insurance Corporation (EFIC) also aids the expansion of the FFI.
Not well known is the condition for licencing
new coal mines, including expansions, is that such mines are obliged by
government to provide their output to coal-fired generators at prices
far below export rates. Otherwise, generators would have to purchase
coal at current export rates, sharply increasing costs and rendering the
plants unprofitable.
Although the FFI have made stupendous profits, corporate owners have
often refused to or only partially funded the cost of rehabilitating
abandoned and exhausted coal mines, leaving extensive damage to the surrounding environment (another negative externality). Just filling the holes and craters from mining is estimated at a conservative $18bn. Taxpayers will have to foot the bill for rehabilitation or tolerate toxic sites and landscape scars of staggering size.
To date, there has been insufficient research to know the full extent
of these miscellaneous subsidies, though they no doubt amount to many
billions of dollars annually.
Private taxes are enormous
One of the greatest deceptions imposed upon us is the pretence that taxes are levied only by government. As I’ve explained elsewhere, capitalist markets impose their own form of taxation and hence wealth and income redistribution.
These market-imposed taxes should be called private taxes, for
obvious reasons. Clearly, negative externalities are a form of private
tax, as people unwillingly bear these costs which benefit those who own
and control the FFI.
Unlike public taxes which are measured to the dollar for as far back
as the 18th century and are subject to endless research and commentary,
private taxes like external costs are simply ignored. This suits
polluters and free-riders just fine.
While the framework of mainstream neoclassical economics is
technically capable of understanding and calculating private taxation,
the real problem arises in recognising the sheer extent of the problem.
In the early 1970s, U.S. economist E.K. Hunt challenged the reigning orthodoxy by explaining that the general assumption of efficient markets is unlikely to hold given the presence of catastrophic deluges of externalities.
Hunt argued that the profit motive provided every incentive to
externalise costs, which meant capitalist economies would be suffocated
by externalities. Here, he accurately inverts the famous maxim of Adam Smith:
Every individual necessarily labours to render
the annual external costs of the society as great as he can. He
generally, indeed, neither intends to promote the public misery nor
knows how much he is promoting it. He intends only his own gain and he
is in this, as in many other cases, led by an invisible foot to promote
an end which was no part of his intention. Nor is it any better for society
that it was no part of it. By pursuing his own interest he frequently
promotes social misery more effectually than when he really intends to
promote it.
His analysis was further refined by U.S. economists Michael Albert and Robin Hahnel in their book Quiet Revolution In Welfare Economics. They argue that‘in postfeudal history,
a plausible case can be made that no economic failure has contributed
more to the waste of productive resources than misallocations of markets
uncorrected for external effects.’
Hunt, Albert and Hahnel argued that externalities were one of the
major flaws of capitalism, though it did not revolve around a handful of
large polluters. Instead, billions of individuals and firms each emit a
small externality (such as a daily car trip). While individually
rational, the aggregate of these billions of small externalities is a
social and ecological disaster.
Their research may sound like an exaggeration if not for climate
change, which, given its adverse effects, is arguably the largest
private tax in history (the privatisation of land rent is a potential
contender). Poisoning of the oceans, resource depletion and widespread
banking and financial risks are other major uncorrected externalities.
The evidence demonstrates
millions of lives and billions of livelihoods are imperilled by climate
change, stemming from the inefficiencies and rational insanity of
capitalist markets and the FFI. No other economic system in history has
threatened the planet with global environmental ecocide. Pollution kills 9 million people annually, which every 11 years equals the highest estimate for the numbers who died under communism.
IMAGE
Enter the conservative nanny state
Cost externalisation is a policy favoured by the corporate elite to
internalise the benefits while externalising costs onto others. The
political oligarchy ensures the public has limited to non-existent political representation to defend themselves against the onslaught of private taxation.
Conservative forces such as the Coalition and IPA claim to support
lower taxes — a form of deliberate deception. Their agenda is to reduce
public taxes to make room for private taxes, which explains their
visceral attacks on the carbon pricing scheme. Extensive redistribution and taxation are considered perfectly acceptable when the corporate sector engages in it, legally stealing with impunity.
In addition to making super-profits by levying enormous private
taxes, the highly-concentrated oligopolistic FFI pays little or no
corporate income tax, as revealed by investigative journalist Michael West. This is achieved through financial engineering using trusts, tax-free havens, loopholes and a severe lack of transparency.
Not to be outdone, the Coalition wants to subsidise the construction of new coal power plants and indemnify these plants against future carbon-related liabilities. The Government has suggested policies that pervert decent ACCC recommendations to benefit some of the most powerful FFI corporations.
Conclusion
There is no need for a single cent of support for renewables if the
subsidies to the FFI are removed. Electricity prices from coal and gas
generation would rapidly become prohibitively expensive if the total
social costs imposed were fully reflected in market prices.
Pricing externalities into oil derivatives like petrol, diesel and
kerosene would also cause internal-combustion vehicle usage costs to
skyrocket. We would see a staggering investment shift into renewables
(far greater than what is currently occurring) and the FFI exposed as an
economic fraud.
The evidence shows the FFI would not exist if not for its ability to loot
via cost externalisation. FFI profits are therefore maintained by
levying enormous widespread private taxes upon the public, the
environment and future generations.
The FFI has done untold damage while incessantly rent-seeking and
lying to maintain illegitimate privileges. No other industry threatens
our welfare as does the FFI, which perfectly illustrates the rational
insanity promoted by unfettered capitalist markets.
Despite the hold the FFI has upon a bankrupt and authoritarian system
of political oligarchy, the FFI is destined to die a much-deserved
death. Research by Stanford academic Tony Seba and futurist Ramez Naam
demonstrates that solar PV, wind, battery storage and autonomous
electric vehicles are exponential, disruptive technologies that will
transform economies rapidly during the 2020s to be almost entirely
renewable by 2030.
Willamette University student Arabella Wood,
right, rallies with others in Eugene, Ore., on Oct. 29, 2018, to support
a climate change lawsuit brought by 21 young people against the federal
government in 2015. On Nov. 2, the U.S. Supreme Court refused a federal
government request to disallow the lawsuit. (Andy Nelson/AP)
The Supreme Court on Friday night refused to halt a
novel lawsuit filed by young Americans that attempts to force the
federal government to take action on climate change, turning down a
request from the Trump administration to stop it before trial.
The
suit, filed in 2015 by 21 young people who argue that the failure of
government leaders to combat climate change violates their
constitutional right to a clean environment, is before a federal judge
in Oregon. It had been delayed while the Supreme Court considered the emergency request from the government.
Justices
Clarence Thomas and Neil M. Gorsuch would have stopped the suit. The
other justices did not indicate how they voted on the government’s
request.
The court’s three-page order said
the government should seek relief from the U.S. Court of Appeals for
the 9th Circuit. It noted the government’s assertion that the “suit is
based on an assortment of unprecedented legal theories, such as a
substantive due process right to certain climate conditions, and an
equal protection right to live in the same climate as enjoyed by prior
generations.”
The justices acknowledged that the 9th Circuit had
previously turned down the government but said those decisions came when
there was a “likelihood that plaintiffs’ claims would narrow as the
case progressed.” That no longer seems the case, the unsigned opinion
said, suggesting the possibility that the 9th Circuit might see things
differently now.
And it left open the possibility that the government could return to the Supreme Court.
The United Nations panel on climate issued a report warning of unprecedented temperature rise between 2030 and 2052 if global warming continues. (Reuters)
The goal of the lawsuit is to compel the government
to scale back its support for fossil fuel extraction and production and
to support policies aimed at reducing the greenhouse gas emissions that
contribute to global warming.
“We’ve been
confident throughout this case that we would get to trial, and I believe
we will get to trial,” Julia Olson, the attorney for the youths and
executive director of Our Children’s Trust, said in an interview with
The Washington Post on Friday evening. “We have overcome everything the
government has thrown at us. It is not luck. It is the strength of the
case and the strength of the evidence and the strength of the legal
arguments we are making.”
The
Obama and Trump administrations had repeatedly asked lower courts to
dismiss the lawsuit, questioning its merits, saying discovery requests
were “burdensome” and arguing that the suit would usurp the authorities
of Congress and federal agencies.
The
plaintiffs “seek nothing less than a complete transformation of the
American energy system — including the abandonment of fossil fuels —
ordered by a single district court at the behest of ‘twenty-one children
and youth,’ ” Solicitor General Noel J. Francisco wrote in a brief to the Supreme Court.
“As
the government has maintained since first moving to dismiss this suit
in 2016, [the] assertion of sweeping new fundamental rights to certain
climate conditions has no basis in the nation’s history and tradition —
and no place in federal court.”
Francisco
acknowledged that he was asking for “extraordinary relief” by asking the
high court to intervene before a trial began. But he said the unique
nature of the lawsuit deserved such an exception.
If
the long trial were allowed to proceed, “it could well be years into
the future” before the government could “seek relief from such an
egregious abuse of the civil litigation process and violation of the
separation of powers.”
The government has made
similar arguments in lower courts, but time and again, judges allowed
the case to proceed. The government also went to the Supreme Court this
summer seeking a stay, but the court in an unsigned opinion called the
request “premature.”
In a 103-page filing this
week intended to keep the trial on track, the plaintiffs argued that the
Trump administration would not suffer “irreparable” harm in having to
go through with the case.
“This case clearly
poses profoundly important constitutional questions, including questions
about individual liberty and standing, the answers to which depend upon
the full evaluation of evidence at trial,” the lawyers wrote, adding:
“These young plaintiffs, mere children and youth, are already suffering
irreparable harm which worsens as each day passes with more carbon
dioxide accumulating in the atmosphere and oceans.”
The
young activists also used the chance to once again demand that the
courts compel the government to “cease their violation of plaintiffs’
rights, prepare an accounting of the nation’s greenhouse gas emissions,
and prepare and implement an enforceable national remedial plan to cease
the constitutional violations by phasing out fossil fuel emissions and
drawing down atmospheric CO2.”
Olson said the
youth plaintiffs were filing a request with the district court in Oregon
for a hearing soon in hopes of moving toward the long-awaited trial.
Officials at the Department of Justice could not be reached immediately for comment Friday.
Labor was lashed for doing something about carbon emissions; the Coalition is being lambasted for doing nothing
Former Labor minister Greg Combet says if the world is to do what is
necessary to contain warming at 2C, then almost all coal-fired power
will be gone by 2040.
Photograph: Julian Smith/AAP
Seven
years ago, Greg Combet, then a Labor minister, implemented a carbon
price in a minority parliament, an experience so arduous it helped curtail his political career. Now, safely outside political life, he looks on with bemusement about where the climate and energy debate has washed up.
On Tuesday, Combet launched a new report by the Industrial Relations
Research Centre at the University of New South Wales investigating how
countries such as Australia can achieve a fair transition for coal
workers displaced as the economy decarbonises.
It got a bit lost in the wash of the week – let’s face it, it’s hard for substance to compete with the rolling spectacle of political dysfunction – but it’s an interesting bit of analysis funded by the CFMEU’s mining and energy division.
In 2011 Combet had to fight almost everyone in the country to get the
clean energy package legislated. Business was hostile. The energy
sector was hostile. Barnaby Joyce was screeching apocalypticallyabout $100 lamb roasts.
But while Combet’s experience was everyone shouting at him for doing
something, we’ve now come full circle. Now, all the shouting is about the current government doing nothing.
Business and energy retailers are on the frontline of increasingly
frantic calls for policy certainty. The Gillard government would have
killed for the conditions the Coalition has blown away over the last three years with reckless abandon.
In any case, Combet ventured out this week about the future of coal.
He insists the outlook is clear. If the world, and specifically
Australia, is to do what is necessary to contain warming at 2C, then
almost all coal-fired power will be gone by 2040. “That’s only 22 years
away,” he tells Guardian Australia. “The energy companies get it. This
is very much front of mind for the asset holders, and they want rational
policy. They aren’t fighting it anymore. They don’t want stranded
assets.”
A hands off approach has left many retrenched workers and their communities with very difficult transition problems
He says the energy market is going to transition “whether or not we’ve got Scott Morrison at the helm” and government owes it to people who will be materially affected in the transition to play it straight.
“Workers in coal power stations need to know the truth. You really
have to tell people the truth about structural change when it’s coming –
you can’t be populist about it”.
Earlier
this year I asked the resources minister Matt Canavan whether he felt
an obligation to help Australian communities face up to the
inevitability of a carbon-constrained future. He responded as if I’d committed a thought crime.
Labor, for its part, is putting a package of measures together. It’s
likely to include a new statutory authority to oversee the transition
and the programs intended to ameliorate it; specific industrial
relations arrangements to ensure workers are managed through the
process; and programs to drive economic diversification.
Labor took a policy on coal transition to the last federal election,
but it has to be re-engineered in some respects to take into account lessons learned from the closure of the Hazelwood plant, and also to reference the requirements of the reliability obligation in the national energy guarantee.
Scott Morrison dumped the emissions reduction component of the Neg
– it was a casualty of the Liberal leadership implosion – but Labor is
likely to keep the policy with its own tweaks. A Labor Neg will have a
higher emissions reduction target than the 26% proposed by Malcolm
Turnbull, which will drive coal closure, but the reliability obligation
(which requires retailers to provide sufficient quantities of
dispatchable power to the grid) could mean that some coal persists in
the system in a reserve capacity.
Labor’s objective is to land the policy before the party convenes in Adelaide in mid-December for its national conference.
The government’s new energy minister, Angus Taylor, is pushing in the
opposite direction. Taylor is a bright bloke, with a lot of expertise
in energy, which makes some of the positions he is pursuing hard to
comprehend.
While the science says the energy sector has to transition, and quickly, Taylor is digging in for coal.
He’s signalled he wants to extend the life of existing plants and
achieve new investment in generation by offering government support,
including the possible indemnification of new coal-fired power from future carbon risk, which transfers the risk of these projects from private proponents to taxpayers.
Taylor will also meet with the energy companies in Sydney next week to waggle his finger censoriously at them over their pricing behaviour.
Now, why? Because he needs an outcome on that before voters go to the
polls next year, because Morrison, in the spirit of handing on a
poisoned chalice, has dubbed him the minister for getting power prices
down.
Power prices are high, and it would be terrific if they were lower.
Ministers should stick up for the interests of consumers, that’s a
given, but we also need ministers to think about interests that extend
further than the next six months – something this government has become
incapable of doing, which is what happens when the sum of your mistakes
forces you to live minute to minute, without much care for whether
anything connects to anything else, or whether things make sense.
As the chairman of the Clean Energy Finance Corporation, investment banker and company director Steven Skala, noted this week,
the transition is on in the energy market. It can’t be reversed.
Business has moved. The financial markets have moved. “The question now
is not one of direction, but of pace,” he said.
Unlike some disruptions, which present too quickly for governments to
ameliorate the effects, we can see this one coming. We are living
through the first phase of it.
When it comes to Australia’s 8,000 coal workers and the communities
that depend on those workers spending their incomes locally, governments
can either pretend they can hold back the future, indulging inane,
virtue signalling with Alan Jones
about “fair dinkum” power while letting real people be crunched in the
transformation, or they can act to make the shift as just as possible.
The report Combet launched this week warns that a hands off approach
has left many retrenched workers and their communities with very
difficult transition problems.
“Because of lack of subsequent support, some problems – like
intergenerational unemployment, poverty and poor physical and
psychological health – continue and worsen with time, becoming
entrenched and systemic,” it says. “These people, their families and
communities have been left to carry the main costs of structural
adjustment. This represents a very unfair transition.”
So here’s a thought.
Instead of “fair dinkum” power, perhaps we could contemplate some “fair dinkum” action?
The world’s scientists estimate we have a decade
to reduce global greenhouse gas emissions, prevent dangerous levels of
global warming beyond 2° Celsius, and avoid the worst impacts of climate
change – but there’s no single silver bullet solution.
As government officials and other policymakers determine how to meet
emissions reductions commitments pledged under the Paris Agreement or
reach clean energy deployment and decarbonization goals, they need to be
able to identify which policies work and how to design those policies.
It’s a daunting challenge, and each day that passes makes the
challenge ahead more difficult, but the technologies, policies, and
strategies to meet it exist today: Energy Innovation’s new book Designing Climate Solutions: A Policy Guide for Low-Carbon Energy finds that 10 policies applied to the 20 largest-emitting nations, can meet the 2°C target.
Policy contributions to meeting the 2°C global warming target. (Analysis done using data with permission from the International Institute for Applied Systems Analysis) Energy Innovation
Doing The Math On Emissions
The vast majority of GHG emissions come from a handful of countries – nearly 75% of global greenhouse gas emissions are generated by just 20 countries. Energy use (power plants, vehicles, and buildings) or industrial
processes (cement or iron and steel manufacturing) is the predominant
source of emissions in these countries, so focusing efforts accordingly
can drive the fastest emission reductions.
The top 20 emitting countries are responsible for roughly 75 percent of global emissions. (Graph data reproduced with permission from CAIT Climate Data Explorer, 2017. Energy Innovation
The Paris Agreement, signed in 2015 by 189 countries responsible for
nearly 99% of the world’s GHG emissions, committed each country to
reduce emissions over the next 10-30 years. If these targets are met,
they would move the emissions curve a third of the way toward the 2°C
target, and if existing policies and the Paris pledges are extended to
2100 with the same ambition, the emissions curve moves about 80% of the
way to a 2°C pathway.
Pledges made as part of the Paris Agreement get us partway to the 2°C pathway. (Graph data reproduced with permission from Climate Interactive and Climate Action Tracker) Energy Innovation
Even if the United States withdraws from the Paris Agreement,
commitments from remaining countries still cover more than 80% of the
world’s current emissions – without counting pledges from U.S. states,
cities, and businesses to meet the Paris goals.
Many policymakers understand the need to reduce GHG emissions, but
need data to evaluate available policies. Different policies are best
suited for different circumstances, and some policies look good on paper
but fail to perform in the real world. Despite this, a practical
consensus about successful policy is emerging, and can generally be
classified as one of four types, each of which reinforces the others:
Performance standards improve new equipment and help capture savings that economic signals cannot because of market barriers.
Economic signals can be highly efficient and encourage the uptake of more efficient equipment driven by performance standards.
Research & development (R&D) and supporting policies
lower the costs of performance standards and economic signals by
pushing new technologies to market and lowering the costs of existing
technologies by removing deployment market barriers.
A portfolio of policies including these four policy types is the most
effective, lowest-cost way to drive down GHG emissions. Properly
designed, they reinforce each other through system dynamics that emerge
organically.
Reducing Power Sector Emissions The power sector is responsible for 25% of annual GHG emissions, or about 12 billion tons of CO2 emissions.
This is expected to grow to nearly 18.9 billion tons by 2050,
comprising roughly 30% of annual GHG emissions in 2050. Without
additional policies, the power sector will be responsible for 28% of
cumulative emissions through 2050.
The emissions growth is largely caused by increasing amounts of coal and natural gas for power generation. For example, the U.S. Energy Information Administration projects
global coal electricity generation will grow from 8.1 terawatt-hours
(TWh) in 2010 to 11.1 TWh in 2050, while global natural gas electricity
generation will grow from 4.6 TWh in 2010 to 11.1 TWh in 2050.
Toronto's WindShare turbine in Toronto, Ontario David Dodge, Green Energy Futures
Reducing power sector emissions involves using low- or zero-carbon
technologies to produce power and reduce electricity demand, and the
best policies for increasing carbon-free power generation are renewable portfolio standards and feed-in tariffs. Complementary power sector policies encouraging utilities to pursue cleaner options
and reduce electricity demand are also important, as are policies that
reduce demand by improving the efficiency of energy-consuming products
(e.g., appliances). In total, smart power sector policies can contribute
at least 21% of the reductions needed to meet the 2°C target.
Reducing Transportation Sector Emissions The transportation sector generates more than 15% of annual GHG emissions, with the most recent data showing about 7.5 billion tons of CO2 emissions
in 2014. This number is expected to grow to more than 9 billion tons by
2050, and without additional policies the transportation sector will be
responsible for 14% of cumulative emissions through 2050.
Transportation’s emissions growth is largely due to increasing car
ownership and freight transport: Passenger travel demand is expected to
more than double between 2010 and 2050, and freight transport is
expected to increase nearly 60% over the same period. Without action,
the vast majority of this demand will be met with petroleum fuels,
causing emissions to grow.
Smog from vehicle traffic in China Energy Innovation
Reducing Building Sector Emissions Our buildings are responsible for 8% of annual GHG emissions, or about 4 billion tons of CO2 emissions.
This total is expected to grow to between 5-6 gigatons by 2050, and
without policy solutions, the building sector will be responsible for 8% of cumulative emissions through 2050.
Buildings and appliances are also significant drivers of electricity
demand. For example, buildings are responsible for 54% of global
electricity demand, and that share is expected to grow to nearly 60% by
2050. When electricity emissions attributable to the building sector are
included, its share of global GHG emissions increases to 20% and grows
to 26% by 2050, largely due to a growing building stock filled with more
energy-consuming technologies.
Air conditioners on a residential building Wikimedia Commons
Reducing building sector emissions requires improving the efficiency
of building equipment (e.g. air conditioning and heating equipment), the
thermal efficiency of buildings, and the efficiency of appliances used
in buildings. Decarbonizing the building sector and reducing electricity
demand are essential emissions reductions strategies, and building codes and appliance standards
can achieve at least 5% of the reductions required to meet the 2°C
target. This can rise to an even higher share later on, because higher
efficiency standards take years to reach full effect.
Reducing Industrial Sector Emissions The industrial sector, including agriculture and waste, is responsible for 38% of annual global GHG emissions, with CO2e emissions of about 19 billion tons.
Emissions are expected to grow to more than 42 billion tons by 2050.
Without additional policies, this sector will be responsible for 49% of cumulative emissions
through 2050. The industrial sector is also responsible for roughly 44%
of global electricity demand, although that share is expected to fall
to about 36% by 2050.
Industry sector emissions can be broken into two categories:
emissions from fossil fuel combustion for energy use and process
emissions (released in industrial processes such as cement clinker
manufacture and metallurgical coal coking). Non-energy emissions in
agriculture and waste also fall under process emissions, and the share
of industrial process emissions is significant. At least 10 billion tons
of CO2e per year come from industrial processes: about 5.2 billion tons of CO2e per
year from agriculture, 1.5 billion tons from waste, and 3.2 billion
tons from more traditional manufacturing-related processes.
Source: Pixabay
Reducing industrial sector emissions requires improving industrial production efficiency, thus lowering energy demand, and eliminating industrial process emissions.
Heavily decarbonizing the industry sector is essential – industrial
energy efficiency improvements can achieve 16% of the necessary
reductions to meet the 2°C target, and reducing process emissions can
achieve at least 10% of the necessary reductions.
The Decarbonization Role of Cross-Sector Policies
In addition to sector-specific policies, cross-sector policies are crucial to decarbonization. Carbon pricing
is one of the most important decarbonization policies and operates
across multiple sectors, delivering large emission reductions.
Similarly, support for R&D is critical to lowering long-run
decarbonization costs, and typically targets technological breakthroughs
in different economic sectors.
These policies are essential for cost-effective economic
decarbonization, and although carbon pricing’s effect is directly
related to the price or emission cap used, strong carbon pricing set at
the social cost of carbon can achieve 26% of the emission reductions
necessary by 2050 to hit the 2°C target.
Challenges in making assumptions about R&D achievement and
spending make explicitly modeling R&D’s emissions reduction effect
difficult, but R&D breakthroughs lower
the costs of meeting the 2°C target and reduce the number and strength
of policies needed. For example, decades of R&D coupled with strong
policies driving deployment mean building
new zero-carbon electricity generation like solar and wind turbines is
cheaper than running existing fossil fuel generation in many parts
of the country. The history of research-based cost declines coupled with
well-designed policy shows how R&D fits together with other policy
types to drive down costs and accelerate the clean energy transition.
How to Win on Climate
Climate change requires action as soon as possible to limit emissions
and avoid exceeding 2° C of warming. Policymakers around the world have
committed to reducing emissions, laying the foundation for deeper
emission cuts that put the world on a trajectory to a lower-carbon
future. The key now is in turning these pledges into reality—with
laser-focused, well-designed policy.
We have the technology today to rapidly move to a clean energy system
– and the price of that future, without counting environmental
benefits, is about the same as a carbon-intensive one. So the challenge
is not technical, nor even economic, but rather a matter of enacting the
right policies and ensuring they are properly designed and enforced.
