(AU) Reserve Bank Warns Climate Change Posing Increasing Risk To Financial Stability

The Guardian - Katharine Murphy

The Reserve Bank says climate change can result in a decline in the income or value of collateral that banks are lending against. Photograph: Saeed Khan/AFP/Getty Images

Australia’s central bank has delivered a clear warning that climate change is exposing financial institutions and the financial system more broadly to risks that will rise over time if action isn’t taken.
The RBA’s financial stability review, released Friday, concluded that while climate change is not yet a significant threat to financial stability in Australia, it is becoming increasingly important for investors and institutions to actively manage carbon risk.
The bank notes Australian insurers are the most directly exposed to the physical impacts of climate change, and points out that inflation-adjusted insurance claims for natural disasters this decade are more than twice what they were in the previous 10 years. It notes “this impact is likely to grow over time”.
“An increase in the frequency and severity of natural disasters will increase the incidence of damage to, or destruction of, physical assets that are insured or used as collateral,” the RBA said.
“Assets that are exposed to increasing physical risk – such as property located in bushfire-prone or coastal areas – could decline in value, particularly if these risks become uninsurable.

“Climate change could also reduce certain types of business income that is used to service loans. Examples include changing rainfall patterns that result in lower or less predictable income from agriculture, more frequent storms disrupting supply chains and therefore sales, and damage to natural assets that reduces tourism income.”
The RBA says banks and other lending institutions are also exposed to physical risks because climate change can result in a decline in the income or value of collateral that they are lending against.
It says Australian financial institutions that have exposure to carbon-intensive industries – such as power generation and mining, or to energy-intensive firms – “will also be exposed to transition risk”.
“Transition risk will be greatest for banks that lend to firms in carbon-intensive industries and to individuals or businesses that are reliant on these firms,” the bank said.
“Other financial institutions investing in carbon-intensive industries, such as superannuation and investment funds, are also exposed to the risk that climate change will diminish the value of their investments. This could occur both through direct investments in carbon-intensive industries, or indirect investments in banks that lend to these industries”.
It warns financial institutions “also face reputational damage if they are seen to be contributing to climate change or failing to manage climate risks”.
The RBA concludes that climate change poses a clear systemic risk, but it is not yet an imminent threat to financial stability. But it warns this could change. “Climate change could emerge as a risk to financial stability if it is not properly managed, or if the size of climate-related losses increased materially.
“Rising climate-related losses could also erode confidence in an institution or the financial system, leading to a withdrawal of funding. This would be more likely if the physical impacts of climate change are more severe or occur sooner than currently projected, or if the transition to a low-carbon economy occurs in a disruptive and costly manner.”
The RBA notes that both the banking regulator Apra and the corporate watchdog Asic have become proactive in managing carbon risk, and the Council of Financial Regulators has established a working group on the financial implications of climate change to help coordinate agencies’ actions.
Friday’s analysis builds on a warning by the Reserve Bank deputy governor, Guy Debelle, who said in March climate change posed risks to Australia’s financial stability.
Debelle said policymakers needed to consider warming as a trend and not a cyclical event. He said policymakers and businesses needed to “think in terms of trend rather than cycles in the weather”.
“Droughts have generally been regarded, at least economically, as cyclical events that recur every so often. In contrast, climate change is a trend change. The impact of a trend is ongoing, whereas a cycle is temporary.”
The deputy governor said there was a need to reassess the frequency of climate change events, and “our assumptions about the severity and longevity of the climatic events”.
In March, Apra flagged an intention to increase scrutiny of how banks, insurers and superannuation trustees are managing the financial risks of climate change to their businesses.
Last year Asic said climate change was “a foreseeable risk facing many listed companies in the Australian market in a range of different industries” and warned directors and management of listed companies “to understand and continually reassess existing and emerging risks including climate risk that may affect the company’s business”.
In that same assessment by the corporate watchdog, 17% of listed companies in the Asic sample identified climate risk as a material risk in their operating and financial reviews.
The RBA noted on Friday, according to the Intergovernmental Panel on Climate Change (IPCC), it will take significant effort to limit global warming to 1.5C above pre-industrial levels, as targeted in the Paris agreement.
“Even if targets are met, this level of warming is likely to be accompanied by rising sea levels and an increase in the frequency and intensity of extreme weather including storms, heatwaves and droughts,” it said. “Some of these outcomes are already apparent. These changes will create both financial and macroeconomic risks”.

Links

• Climate change poses risk to Australia's financial stability, warns RBA deputy governor
• Big Money Starts To Dump Stocks That Pose Climate Risks
• Businesses That Ignore Climate Change Could Face 'Kodak Moment', Warns APRA
• Trump Official Goes Rogue, Says Climate Change May Cause Next Financial Crisis
• Norway's $US1 Trillion Sovereign Wealth Fund To Dump Billions In Coal Investments
• Climate Change Poses A Clear Financial Risk To Australia
• Heavyweights Now Speaking With One Voice On Climate Change Risks
• Why Climate Change Risks Are 'Material' For Big Finance
• APRA Demands Banks, Insurers Act On Climate Risk
• The RBA Has Sounded The Climate Change Alarm. Time To Sit Up And Take Notice
• Everything you want to know about climate change in #MyClimateQuestions
• Australia facing climate disaster on its doorstep, government's white paper warns
• Most global investors recognise financial risk of climate change, report finds
• Chief scientist defends Climate Change Authority review against dissenters
• Climate change: John Hewson accuses Coalition of 'national disgrace'

Australia’s Biggest Property Companies Are Making Net-Zero Emissions Pledges – Now We Can Track Them

The Conversation - Amandine Denis

Huge crowds marched last week to demand progress towards net zero emissions – and companies are listening. AAP Image/James Ross

Corporate Australia is taking action on climate change. Most recently, at the UN Climate Summit, Atlassian cofounder Michael Cannon-Brookes announced the A$26 billion Australian software company’s commitment to net zero emissions by 2050.
Net zero pledges like this are becoming more common but currently there is no way to really track momentum towards net zero emissions across different sectors of the economy.
Now, a Net Zero Momentum Tracker initiative has been established by ClimateWorks Australia and the Monash Sustainable Development Institute to track emissions reduction commitments made by major Australian companies and organisations, as well as state and local governments.
The tracker aims to place all commitments to net zero emissions in Australia in one place and evaluate how well they align with the Paris climate goals.

Property sector tracking towards net zero emissions
We began by assessing Australia’s property sector. Last week we released a report examining all property companies listed in the ASX 200, plus all of those required to report their emissions under the National Greenhouse and Energy Reporting Act.
Among the companies we looked at are Dexus, Mirvac, Stockland Corporation, GPT Group, and Lendlease. They develop, own or manage some of Australia’s largest corporate offices, commercial properties, retail centres, retirement villages, and residential developments.
The report found almost half – 43% – of Australia’s largest listed property companies have made commitments that closely align with the Paris Climate Agreement, aiming to achieve net zero greenhouse emissions before 2050 for their owned and managed assets.
Significantly, the six companies with the most ambitious net zero targets represent 36% of the ASX 200 property sector. Among these six, several major companies – Dexus, Mirvac, GPT Group, and Vicinity – are aiming for net zero emissions by 2030, demonstrating the business case for strong climate action.

Sector leaders can inspire copycat action
By highlighting what action organisations are taking and how, the Net Zero Momentum Tracker initiative aims to encourage more organisations to make and strengthen commitments to reduce their emissions, in line with the goal of net zero emissions by 2050.
For example, Australia’s largest owner and manager of office property, Dexus, has a comprehensive strategy for reaching its goal of net zero emissions across the group’s managed property portfolio. This includes reducing energy use, shifting to renewable electricity, electrifying their buildings, and reducing their non-energy emissions from waste, waste water and air conditioning.
Of particular significance is Mirvac’s pledge to be “net positive” by 2030. This means the company aims to go beyond net zero, reducing emissions by more than its operations emit. Mirvac has established an energy company to install rooftop solar on their commercial buildings and is selling power to occupants, among other initiatives. The company also has a “house with no bills” pilot project, to explore how their upstream indirect emissions can be minimised for residential developments.
Another major company, the GPT Group, has extended its commitment beyond the assets it owns and manages to all buildings it has an ownership interest in, including buildings it co-owns or does not manage.
These companies will get multiple benefits from their action, including reduced operating costs, better health and productivity for occupants, and increased sales prices, rents and occupancy rates.

Need to accelerate action
While many property companies are tracking in the right direction, none of the companies we considered had net zero targets which comprehensively covered all of their emissions – such as those from co-owned assets, their supply chains and investments.
There is still significant opportunity for property companies to strengthen their commitments towards net zero emissions. This requires targets which address the full scope of direct and indirect emissions within each company’s influence, supported by detailed plans to achieve this.
By making these public commitments to reduce emissions, the property sector is helping build momentum towards achieving this goal across the entire Australian economy.
The next assessments to be undertaken by the Net Zero Momentum Tracker initiative include the banking sector and state and local governments.

Links

• Atlassian Billionaire Presses United Nations On Net Zero Emissions Pledge
• Net Zero Momentum Tracker
• Net Zero Momentum Tracker - Property Sector Report
• National Greenhouse and Energy Reporting
• We can be a carbon-neutral nation by 2050, if we just get on with it
• Whichever way you spin it, Australia's greenhouse emissions have been climbing since 2015
• Green buildings must do more to fix our climate emergency
• Buildings produce 25% of Australia's emissions. What will it take to make them 'green' – and who'll pay?

Climate Change Is Really About Prosperity, Peace, Public Health And Posterity – Not Saving The Environment

The Conversation - Ezra Markowitz | Adam Corner

What will it take to get people to connect to the climate change story? mauro mora/Unsplash, CC BY

The story of climate change is one that people have struggled to tell convincingly for more than two decades. But it’s not for lack of trying.
The problem is emphatically not a lack of facts and figures. The world’s best scientific minds have produced blockbuster report after blockbuster report, setting out in ever more terrifying detail just how much of an impact we humans have had on the Earth since the dawn of the industrial revolution. Many people believe anthropogenic climate change – rapid and far-reaching shifts in the climate caused by human activity – is now the story that will define the 21st century, whether anyone’s good at telling it or not.
Nor is it merely a problem of delivery. The past decade has witnessed an explosion of climate change communication efforts spanning nearly every conceivable medium, channel and messenger. Documentaries, popular books and articles, interactive websites, immersive virtual reality, community events — all are being used in increasingly creative ways to communicate the story of climate change. Many of these efforts are beautifully designed and executed, visually and narratively engaging and careful to avoid common traps and shortcomings that have tripped up previous efforts.
As communications specialists who have each spent more than a decade observing and studying how people, media and organizations talk and think about climate change, we’ve come to understand that the climate change communication problem runs much deeper: It’s baked into the nature of the issue itself.

It’s hard for a single person to connect
with a global-scale problem. JPL/NASA, CC BY

Climate change is abstract, uncertain, unfamiliar, impersonal, diffuse and seemingly distant, even as the frequency of climate-related events continues to increase in many parts of the world. This is not to say that the well-documented and well-funded efforts to sow misinformation, doubt and denial aren’t also real challenges facing climate change communicators and advocates; of course they are.
But even without explicit efforts to confuse and divide the public, climate change would still be a uniquely challenging issue to talk about in ways that motivate public engagement rather than inspire despair and fatalism.
The sad irony, of course, is that the story of climate change is in fact a deeply human one – we caused it, we will suffer from it and we alone can take action to avoid its worst consequences and prepare for the rest.
But shifting climate change from a scientific reality to a social, economic and political reality has proven extremely difficult. This is still primarily an “environmental” issue in many people’s minds, and that is a real problem for building a broad-based social movement around climate change.

What other health and security benefits come with tackling climate change? sergio souza/Unsplash, CC BY

Solve additional problems by tackling the first
Over the past few years, one suggested solution around this communications roadblock has been to tell the story of what are called climate change co-benefits.
The idea is simple and compelling: If the public won’t or can’t get behind climate action for climate’s sake, maybe they will if all the many nonenvironmental benefits of reducing carbon emissions are brought to the foreground. Hence, climate change as a threat to public health, to national security, to social mobility.
Traditional co-benefits framing tells the story like this: If humanity does something about climate change – if we reduce carbon emissions through massive investments in renewable energy and retrofitting of inefficient buildings, if we improve resilience through investing in green infrastructure, nature-based solutions and all the rest – we will not only solve the climate change problem, we’ll also reduce economic inequality, improve public health, reduce threats to national sovereignty and geo-political stability, and generally make people’s lives better.
These and many other co-benefits of aggressive and proactive action on climate change are real, and they will very much improve the lives of billions of people living on this planet today and in the future. But is this the best way to talk about the issue in service of building a powerful social movement?
The problem with the standard co-benefits narrative isn’t that it distracts too much from the core climate change challenge (it doesn’t), nor that it is somehow manipulative (it’s not) or simply not necessary (it is).
We suggest the problem is that it still leaves too much of the focus on climate change as an environmental or scientific issue while relegating all the other things people often care more about – addressing rampant inequality, increasing access to affordable health care, improving people’s material and emotional lives – to the background.
Leading with “if you really cared about your pet issue, then climate change should be your priority” is neither welcoming and inclusive nor likely to succeed in building a broad base of support for aggressive action on climate. Condescension rarely wins converts.

A wind farm promotes human health – and just happens to benefit the climate?
Brandon Hoogenboom/Unsplash,CC BY

Rethink which benefit drives the story
But that doesn’t mean advocates should necessarily give up on co-benefits. Maybe they just need to flip the script on its head – to lead with and keep the focus on the nonclimate benefits of aggressive decarbonization and adaptation efforts. Maybe “addressing climate change” should be treated as the co-benefit rather than the leading motivation for action that could materially help billions of people, today and in the future.
Ultimately, the most effective long-term approach to getting diverse audiences to engage deeply with climate change may require that advocates stop treating it as a standalone problem that could benefit from being linked to other topics many people care more about. Instead, advocates may need to fundamentally rethink and alter the way they talk about and position climate change as an issue in the first place.
If climate change is now becoming a meta-narrative against which all other stories play out, perhaps no one needs to argue that decarbonization of the global economy will produce some health benefits or improve people’s well-being. Perhaps the best strategy is to simply say that climate change is a health risk, a risk to peace and prosperity, a risk to humanity’s survival – that the climate change story is our story as a species.
This is not about mobilizing the muscle of co-benefits to make the climate change narrative more robust or appealing. It’s about merging the co-benefits and climate change itself so thoroughly that they become one and the same.

Links

• Communicating climate change: Focus on the framing, not just the facts
• Climate change is too middle class – here’s how to fix that
• Climate scientists may not be the best communicators of climate threats
• The counter-intuitive solution to getting people to care about climate change
• Don’t be afraid to talk about the costs of dealing with climate change
• To get conservative climate contrarians to really listen, try speaking their language
• How to win the climate wars – talk about local ‘pollution’ not global warming

Reasons There Might Be No Path To Success On Climate Change

Forbes - Chunka Mui

"Grasp the larger hope" -- Winston Churchill. Gamma-Keystone via Getty Images

I want to scream “You’re not helping!” every time I read a story like this one, which recently ran in USA Today: “End of civilization: climate change apocalypse could start by 2050 if we don't act, report warns.”
I certainly worry about what might befall us and our children by 2030, 2050 and 2100—three often cited milestones (such as here, here and here). But, I want to scream because I fear that such warnings about far-in-the-future calamities make it much less likely that what we do anything today to mitigate or adapt to the challenges we face.
That’s because, ironically, while such climate scenarios are intended to mobilize public opinion towards urgent action, they likely hurt that very cause.

Daniel Kahneman receives the Nobel Prize in Economics. (JONAS EKSTROMER/AFP/Getty Images)

To understand why, consider the pessimism of Daniel Kahneman, the Nobel Prize winning behavioral scientist: “I really see no path to success on climate change,” he told George Marshall in Marshall’s bracing book, “Don’t Even Think About It: Why Our Brains are Wired to Ignore Climate Change.”
Kahneman fears that climate change is a hopeless problem for three reasons:
First, it lacks salience. It is too “abstract, distant, invisible and disputed” to capture our attention. Without attention, there is no action
Second, dealing with climate change is typically thought to require people to accept short-term costs and reductions on living standard in order to address higher but uncertain future losses. Such sacrifice is not in our nature. One University of Chicago poll found that while 72% of respondents believed that climate change is happening, half were unwilling pay even $1 each month to help address it.
Third, climate change seems uncertain and contested—“even if there is a National Academy on one side and some cranks on the other.”
By focusing our minds on what might happen 10, 30 or even 80 years from now, far-off doomsday scenarios reinforce the abstract and distant nature of climate change. They widen the window of scientific uncertainty both the outcome and costs, and therefore enhance the opportunity for rebuttal and confusion.
“The bottom line,” Kahneman concluded, “is that I’m extremely skeptical that we can cope with climate change. To mobilize people, this has to become an emotional issue. It has to have immediacy and salience. A distant, abstract and disputed threat just doesn’t have the necessary characteristics for seriously mobilizing public opinion.”
Kahneman’s pessimism is unfortunately well supported by other researchers—and applies not just to climate change but to the broader challenge of why we, individually and as a society, underprepare for slow moving, predictable disasters. As solidly laid out by Robert Meyer and Howard Krunreuther in “The Ostrich Paradox: Why We Underprepare for Disasters”:
“Our ability to foresee and protect against natural catastrophes has never been greater; yet, we consistently fail to heed the warnings and protect ourselves and our communities, with devastating consequences.”
So, are we doomed? Perhaps. But, remember the observation of Arthur C. Clarke, in what has become known as Clarke’s First Law:
“When a distinguished but elderly scientist states that something is possible, he is almost certainly right. When he states that something is impossible, he is very probably wrong.”
Let’s hope that the distinguished Daniel Kahneman is “probably wrong.” Also, take a lesson from Winston Churchill on the gathering storm of World War II: “Having got ourselves into this awful plight in 1939, it was vital to grasp the larger hope.”

Links

• Top 10 Global Warming Lies That May Shock You
• Don't Even Think About It: Why Our Brains Are Wired to Ignore Climate Change
• Indisputable Facts On Climate Change
• The Ostrich Paradox: Why We Underprepare for Disasters
• Guess Who's Most Effective At Combating Global Warming
• Most Americans want government to combat climate change, poll finds
• Climate Change Or Global Warming? Three Reasons Not To Be Distracted By The Name Game

Climate Change Threatens Oceans, Ice Sheets, Sea Level - And Us

Forbes - Mike Scott

A scientist carrying out tests on a glacier in Greenland. (Photo by Joe Raedle/Getty Images) Getty Images

Sea levels are rising even faster than scientists had predicted and by the end of the century, the oceans could be more than a metre higher than today if global CO2 emissions are not controlled, a new expert analysis has concluded.

Earlier this year, the Intergovernmental Panel on Climate Change, a body comprising the world’s leading climate scientists, published a report on how climate change will affect land. It highlighted how climate change is affecting the production of food, at the same time as agriculture and deforestation are also major contributors to climate change.
Food production will be affected by problems ranging from desertification and more frequent and severe droughts to floods, landslides and heatwaves, it said.
Now the IPCC has produced a follow-up looking at the impact on the oceans and the cryosphere – the bits of the earth that are covered in ice. This report is no more cheerful than the last one.
It says that our oceans, ice sheets and glaciers are absorbing the bulk of rising temperatures and that the impacts are already evident, from the top of the highest mountain to the bottom of the oceans – and they are affecting everyone. Climate change makes the oceans warmer and more acidic, while reducing the oxygen content, with knock-on effects for everything that lives in it.
Warming temperatures are already shrinking Arctic sea ice and the loss of ice from Greenland and the Antarctic is contributing seven times as much to sea level rise as it was just 20 years ago. As a result, sea levels are rising at unprecedented rates and the world could see a 2-metre rise in sea levels by the end of the century in the most extreme scenario.
Melting permafrost in the Arctic and Siberia could release huge amounts of locked-up CO2 and methane, further exacerbating the warming of the planet.
Meanwhile, glaciers could shrink by 20% this century, with some regions such as Central Europe seeing a reduction of more than 80% and Arctic permafrost faces widespread disappearance. It sounds like a geography lesson. But all of this adds up to serious impacts for all of us. The glaciers in the Himalayas provide water for almost 2 billion people and a third of it is predicted to have melted by the time today’s children are adults.
“The open sea, the Arctic, the Antarctic and the high mountains may seem far away to many people,” said IPCC chair Hoesung Lee. “But we depend on them and are influenced by them directly and indirectly in many ways - for weather and climate, for food and water, for energy, trade, transport, recreation and tourism, for health and wellbeing, for culture and identity.”
Some island nations will become uninhabitable by the end of the century – the highest point in the Maldives, for example, is about eight feet above sea level, and the average height above sea level is about four feet. It’s not just islands that are at risk. More than a quarter of the world’s population live within 100km of the coast, and less than 100 metres above sea level, including 17 cities with populations of five million or more. Examples of how this will affect people include the Mekong Delta in South East Asia, where more ferocious storms and higher sea levels will make the water more saline and have a potentially devastating effect on harvests and food prices.
Residents of coastal cities and towns could see what were previously once-in-a-century events, such as massive floods, storm surges and extreme rainfall, becoming annual occurrences by 2050. As well as causing severe damage to property and local economies, these events could lead to a wave of climate change-induced migration, increasing already febrile social tensions.
The fish stocks that we depend on for our food are going to fall by up to a quarter due to the oceans becoming warmer and more acidic, with marine mammals also suffering a 15% decline and “almost all coral reefs” set to degrade.
And if you live in the mountains, home to a tenth of the world’s population, there will be more landslides as glaciers recede, and less water, which will hit everything from food production to hydro-electric power production and tourism.
“The findings of this report are a wake-up call for everyone – not just for those who live near the ocean,” said filmmaker and executive director of the Oceanic Preservation Society Louie Psihoyos. “Our entire global society is reliant on the ocean and ice systems that regulate our planet. We can no longer afford business as usual, and it is going to require the participation of each of us. These signals are too strong for us to ignore any longer – now is the time for bold, urgent climate action to avoid even more catastrophic impacts.”
However, there is some hope in the report. We can limit many of the effects on the oceans if we act now. “If we reduce emissions sharply, consequences for people and their livelihoods will still be challenging, but potentially more manageable for those who are most vulnerable,” says Lee. “We increase our ability to build resilience and there will be more benefits for sustainable development.”
The report points out the benefits of ambitious and effective adaptation for sustainable development and, conversely, the escalating costs and risks of delayed action. “Various adaptation approaches are already being implemented, often in response to flooding events, and the report highlights the diversity of options available for each context to develop integrated responses anticipating the full scale of future sea level rise,” said Valérie Masson-Delmotte, one of the authors.
Strongly reducing greenhouse gas emissions, protecting and restoring ecosystems, and carefully managing the use of natural resources would make it possible to preserve the ocean and cryosphere as a source of opportunities that support adaptation to future changes, limit risks to livelihoods and offer multiple additional societal benefits, the report adds, but it is not going to be easy.
“We will only be able to keep global warming to well below 2°C above pre-industrial levels if we effect unprecedented transitions in all aspects of society, including energy, land and ecosystems, urban and infrastructure as well as industry. The ambitious climate policies and emissions reductions required to deliver the Paris Agreement will also protect the ocean and cryosphere – and ultimately sustain all life on Earth,” said Debra Roberts, another co-author.
“The more decisively and the earlier we act, the more able we will be to address unavoidable changes, manage risks, improve our lives and achieve sustainability for ecosystems and people around the world – today and in the future,” Roberts said.

Links

• Hotter Oceans, Wilder Weather, Less Ice: The IPCC Upgrades Projections To Catastrophic
• Extreme Sea Level Events ‘Will Hit Once A Year By 2050’
• Climate Crisis: Rising Sea Levels And Catastrophic Storm Surges Could Displace 280m People, UN Warns
• Climate Change Evacuation Planning Needs To Start Now, Urges Scientists
• Climate Change May Change The Way Ocean Waves Impact 50% Of The World’s Coastlines
• How Rising Sea Levels Erase Culture
• When Climate Change Interferes With Ability 'To Listen To The Earth'
• Glacial Melting In Antarctica May Become Irreversible
• Rising Sea, Erosion To Wreak Havoc In Low-Lying Suburbs: Report

Drought Plan Must Factor In Climate Change

Sydney Morning Herald - Editorial

There is a case for drought relief but it must encourage farmers to adapt to the changing climate.

August root-zone soil moisture data
Source: BoM

As country towns across the inland run out of drinking water, the federal government has started to show its concern for farmers affected by the drought.
Prime Minister Scott Morrison went to Dalby in Queensland last week to announce a $100 million drought package and Treasurer Josh Frydenberg has taken time off his day job for a three-day tour of NSW and Queensland.
On one hand, country people will be comforted that the government is paying attention to their plight. On the other, they will ask whether another parade of politicians putting on moleskins and fronting a press pack in the dust will make any difference.
Everyone says the government needs to do something but for now the government’s basic approach is to dribble out more money and hope that it rains.
That is probably all that can be done in a crisis.
But it is not the whole answer. It ignores the crucial issue of what to do if the scientists are right and droughts are becoming longer and more frequent.
This question should not be conflated with the equally important issue of whether Australia should have a stronger climate change policy.
Deeper cuts in Australia’s carbon emissions are needed to help slow the rise in global temperatures but it will not solve the farmers’ problems overnight. Scientists say droughts will get worse for decades.
The Herald backs drought assistance to help farmers cope but it should be fair and efficient and it should be designed to encourage farmers to adjust to the new climate conditions.
In fact, the Productivity Commission says a lot of money is already being spent. Sheep, cattle and grain farmers in 2017-18 received about $1.3 billion in state and federal government subsidies. Those farmers now receive 5.8 per cent of their income as subsidies from the government, compared with just 3.7 per cent five years ago, a higher rate of subsidy than any industry sector.
Farmers also receive lots of other indirect help such as state subsidies on freight for fodder as well as generous household payments worth up to $37,000 per couple, far more than age pensioners or single parents.
Yet many people who receive drought relief are not poor. The latest drought package has allowed people with assets up to $5 million to apply.
Mr Morrison says this is not welfare but it is still taxpayers’ money and it should be spent prudently.
Sometimes it seems it is not. The government was left red-faced this week when it emerged that Moyne Shire in western Victoria that got $1 million under Mr Morrison’s announcement was not actually affected by the drought. Equally, it appears that former “drought envoy” Barnaby Joyce was was not required to produce a report to justify his salary and expenses.
Many economists are concerned more deeply that the cash will distort farmers' decisions about how to react to the changing climate. For instance, some drought assistance compensates farmers who decided not to manage their risk by selling stock at a better price early in the drought.
Farmers groups sometimes call for more dams as a panacea. But it is often hard to produce a long-term business case for them. Fans of dams also often ignore the risk that they will reduce water flows to surrounding farms and the environment.
Unfortunately, even with the best government plan, climate change will reshape Australia’s rural society.
Some farmers will adjust their methods and succeed. Some will decide to sell up their farms to big businesses and do something else. Governments should help those in need but rural Australia must accept that the times are changing.

Links

• Andrews hands out $31.5m, admits 'drought packages don't make it rain'
• More Than Climate Change Driving Queensland Fires, Explain Climatologists
• ‘Dead Things Everywhere’: Is Australia Facing The Summer From Hell?
• Farmers Call For National Strategy On Climate Change And Agriculture
• Extreme Weather Caused By Climate Change Has Damaged 45% Of Australia’s Coastal Habitat
• Drought Now Officially Our Worst On Record
• Australian Federation Drought, Painting Grim Future For Australia’s Biodiversity Under Climate Change
• A New Team Is Working To Predict The Danger Zones Of Australia's Deadliest Heatwaves
• 'Drier Than Millennium Drought': Satellite Shows Toll Of Big Dry
• NSW Towns Including Dubbo And Tamworth Face Water Emergency Within Months

The ACT Is Set To Run On 100 Per Cent Net Renewable Energy. What Does That Mean?

Sydney Morning Herald - Nick Bonyhady

The Australian Capital Territory has accomplished an Australian first. Is it now covered in wind farms and solar panels? And are other states following?

ACT Minister for Climate Change and Sustainability Shane Rattenbury at Crookwell 2 wind farm. Credit: Sitthixay Ditthavong

It's the first Australian jurisdiction to legalise medicinal cannabis, the first to enshrine animals rights such as freedom of movement in law and now, as of October, it is set to be the first major place outside Europe to transition to 100 per cent net renewable energy.
Spring has been busy in the Australian Capital Territory.

What about that 100 per cent renewables gong? It's an impressive statement at a time when there is still widespread debate about how Australia should tackle climate change and federal energy policy has produced an impasse that helped see off Malcolm Turnbull twice as Liberal leader.

But if it conjures an image of the national capital overrun with solar panels and a windmill in every back yard, the reality is very different and much more complex.
So what does "100 per cent net renewables" mean? Will it help fight climate change? And will be all soon be following suit?

What does "100 per cent net renewable energy" mean?
Let's break it down. The renewable energy part is fairly simple: it refers to energy that is naturally replenished and does not run out. The 100 per cent means that there is enough of it to meet Canberra's energy needs. It's the net where things get complicated.
If it was a gross target that Canberra had met, it would indeed be running entirely on energy from wind and solar farms. That would require better transmission lines to the ACT, more local generation and huge batteries to make up for varying power output from renewable sources.

By contrast, a net target means the ACT has bought an amount of renewable energy equal to what it needs from suppliers around the country but, because the ACT is connected to the national grid, the energy it actually uses comes from power stations all over the country.

Federal Energy Minister Angus Taylor, a critic of the ACT's scheme, says "93.6 per cent of the ACT’s electricity comes from the NSW grid, which continues to be dependent on coal and gas". According to the Department of the Environment and Energy, "coal and gas account for about 85 per cent of electricity generation" nationally.
But while the ACT is still powered mostly by coal and gas, the renewable energy it has bought is being used in place of coal and gas by consumers in other parts of the country. In short, the ACT and its suppliers are putting the same amount of renewable energy into the national grid as the total amount of energy used in the ACT by homes and businesses.
Shane Rattenbury, the ACT's minister for climate change, likens what the ACT is doing to depositing money in a bank and withdrawing it from an ATM. "You don't receive the same note you deposited but you still have $100," Mr Rattenbury says.

Where does all that renewable power come from?
The ACT is known for its national cultural institutions, a man-made lake and good odds of sighting a prominent politician at the local IGA but not for generating power. While there are some small solar farms on the outskirts of Canberra, most of the ACT's renewable power is generated outside the territory.

There are three ways the ACT has secured renewable power:

• About 77 per cent comes from large-scale contracts the ACT has signed directly with renewable, primarily wind, producers in Victoria, NSW and South Australia.
• Another 21 per cent is what the ACT has bought from renewable energy producers operating within the National Energy Target, a Commonwealth scheme to encourage the production of more renewable energy.
• Households in the ACT with rooftop solar contribute the remaining 2 per cent.

Source: ACT Government

Does it matter?

Electricity accounts for more of Australia's emissions than any other source, at about a third of the country's total, figures from the federal Department of the Environment and Energy show. However, only about 0.2 per cent of national emissions from all sources come from the ACT.
That suggests the ACT's accomplishment will have a minimal impact on national greenhouse gas emissions alone.

But it is part of a broader story. Hugh Saddler, an honorary associate professor at the ANU who also works in the renewable sector, says having guaranteed government demand lets renewable developers access cheap financing to build more wind and solar farms.

And he says that, with the federal large-scale renewable energy target for 2020 nearing fulfilment, government investment is becoming more important for the sector.

How big a step is this?
The ACT is not the first state or country to go 100 per cent net renewable. A report by the Australia Institute, a progressive think tank, notes that regions in Spain, Austria and Germany have done the same. The rural German district of Rhein-Hunsrück was the first of the current wave, in 2012.
Several other countries are also already reliant on renewable power, including Ethiopia, which uses hydro power, as does Iceland in conjunction with geothermal power generation. But Dan Cass, who wrote the Australia Institute report, says those countries' transitions "predate climate challenges and recent renewable development".
The ACT's transition to renewable energy, Mr Rattenbury says, shows how cities, regions and countries "can roll out renewables in a cost-effective way … getting the best deal for consumers".

Iceland has been running on renewables for years – its water comes out of the ground piping hot. Credit: Alamy

What difference does it make to Canberrans' hip pockets?
The ACT government initially estimated that achieving its renewable energy target would cost households at most $5.50 per week next year before later declining.
But the actual cost might be different because the ACT buys most of its renewable power at fixed prices. When the actual power it uses from the grid is cheaper than the fixed price, it pays the renewable provider the difference. When the grid power is more expensive – on a hot summer day, for example – the renewable provider compensates the ACT.
Associate Professor Bruce Mountain, director of the Victoria Energy Policy Centre, says he would be unsurprised if customers in the ACT were currently paying substantially less than $5.50 because market power prices are so high.

Hornsdale wind farm in South Australia.

How did the ACT reach its target?

The ACT legislated a 100 per cent renewable target in 2016, with the goal of hitting it by 2020. It then conducted a series of reverse auctions for renewable power. In a reverse auction, the cheapest bid (in addition to other criteria) rather than the most expensive, wins.

The last of the renewable energy supplies contracted under that process, at the Hornsdale wind farm in South Australia, commences in October, meaning the ACT will achieve its goal as planned.

Are other states following the ACT's lead?
There was wide variation in how much renewable energy each state generated last year, according to a report by the Clean Energy Council, a renewable energy industry body.
Tasmania produced the most renewable energy as a share of production and raw amount but NSW generated the second-highest raw amount, despite being lower in percentage terms. Associate Professor Mountain says, "Of the new wind and solar clean energy sources, in absolute amounts, Queensland, NSW and Victoria will be neck and neck by 2022."


But generation is different to consumption, which is where the ACT claims its 100 per cent net renewable crown. On consumption, the states all have different targets.  

• A Tasmanian government spokeswoman says the state, which has plentiful wind and hydro power, was "on target to deliver full self-sufficiency in renewables by 2022".
• Queensland has a 50 per cent renewable energy by 2030.
• Victoria has a 40 per cent target by 2025 but is exploring how to match Queensland's. It has used reverse auctions similar to those pioneered in Australia by the ACT.
• A South Australian government spokeswoman says the state intends to be 100 per cent net renewable by "early in the 2030s".

• New South Wales does not have a renewable energy target but supports the Commonwealth's target and a net zero emissions target across its economy by 2050.
• Western Australia also has no renewable energy target but Energy Minister Bill Johnston says the state's "aspiration is net zero emissions by 2050".

Spokespeople for the states say their respective governments are investing in a range of renewable energy and infrastructure projects.
Net zero emissions take into account all emissions, rather than only those caused by generating power, but states with general zero emissions targets will still need to increase their use of renewable power to meet their targets.

Where is the ACT going from here?
Going renewable isn't an end in itself. The goal is to reduce emissions overall and the ACT also has a zero emissions target, set for 2045.
As the ACT has little agriculture, natural resource refinement or manufacturing, it is trying to reduce emissions from another source: natural gas.
The government's plan to phase out natural gas use has proved controversial, as it will require switching everything from buses to household heaters and stove tops to electricity.
At the same time, the ACT's population, and therefore power usage, is growing, so the government has announced another round of reverse auctions to buy more renewable power.

How will this affect the grid?
With blackouts in South Australia and some renewable providers struggling to find space on transmission lines to get their power to consumers, it is no secret the Australian electricity grid is struggling.
Associate Professor Mountain says the grid was built for a period in which "each state has historically had its fossil-fuel coal basins and most transmission capacity has been from there."
With renewable energy spread out around the country, "we need to build infrastructure for generation that is not where it has historically been," he says.
If all states were to follow the ACT without improving power infrastructure, the grid would be unable to cope. The ACT's Shane Rattenbury says he is aware of the risk.
"We need to build a grid that can cope with the energy of the future not the energy of the past."

Links

• Wind And Solar Set New Generation Records Across Australia Grid In July
• Clean Energy Set To Provide 35% Of Australia's Electricity Within Two Years
• Call To Arms: How Can Australia Avoid A Slow And Painful Decline?
• CSIRO, NAB Chair Say Shift To 100% Renewables Inevitable, And Likely By 2050
• Australia To Achieve 50% Renewables By 2030 Without Government Intervention, Analysis Finds
• War On Wind And Renewable Energy Must End
• Australia Can Be Powered 100% By Renewables By Early 2030s, Says Garnaut
• Jump In Renewable Energy Jobs As Solar Farms Overtake Hydro Power
• 2018 Was Boom Year For Renewables Despite Political Chaos, Report Finds
• Australia Has Enough Solar, Wind Storage In Pipeline To Go 100% Renewables