The world is moving away from fossil fuels, while in Australia, it’s all systems go for coal and gas
The government seems determined to consign us into being an international pariah and bear the brunt of increasingly damaging climate impacts
The International Energy Agency has produced a groundbreaking report on how the world can meet the Paris agreement’s long-term temperature goal of limiting warming to 1.5C. In particular, it shows, from the IEA perspective, how the energy system can reach net zero by 2050.
It has two really important top line messages.
First, the path to get to net zero emissions by 2050 and to limit warming to 1.5C remains open, but, as we all know, the window is closing on this open unless action is rapidly ramped up.
Second, to get there, all new fossil fuel investments and infrastructure – oil, coal and gas – need to stop. Not next year, not in 2030, but today: 2021. And what is key here is that this statement doesn’t come from some activist organisation, but from the world’s leading – and very conservative – energy advisor. To those of us in the scientific and energy policy community working on these issues – and indeed to others paying attention – none of these conclusions should be surprising, or shocking. Advertisement What is really shocking is the reaction of the Morrison government, a government that appears to be betting the farm, the economy and Australia’s international standing in a wider sense – betting that the world will just walk away from the Paris agreement and of the increasing global momentum towards limiting emissions to net zero by 2050. On the very day the IEA report was released, the federal government announced it is about to pour $600m into a new gas-fired plant in Kurri Kurri in the Hunter Valley. Aside from the climate change implications, all advice given to the government, from its scientific advisor to the Australian Energy Market Operator, admitted new gas plants would be more expensive. Globally, it is well understood that renewable energy and storage is far less expensive than coal and gas, not least because its fuel (sun, wind, waves, water) is free, and in Australia this is truer than most other places. The government argues that the Kurri Kurri plant will reduce costs for consumers, whereas most energy analysts argue the opposite. The world is moving away from fossil fuels, as can be evidenced from almost daily announcements from the investment community as bank after bank announces new policies to divest from these climate changing fuels. Why is the government willing to bet the farm and the country that the world will not implement the Paris agreement?
The Asia Development Bank’s announcement that it will no longer fund coal in the region is the most recent. We also have the European Investment Bank, which announced some time ago it will not fund coal projects and it is also abandoning gas. These public, government-backed banks moving away from fossil fuels also undermine investments from private institutions, which rely on the big public banks to back their investments. Along with the banks, we’re also seeing insurance companies and superannuation investment funds divesting from fossil fuels. In 2019 the world’s largest sovereign wealth fund, Norway’s Government Pension Fund Global (GPFG), announced it would no longer fund oil and gas, having already ditched coal. Globally, there is a big move towards countries setting zero goals and upgrading their 2030 targets, the major focus of international efforts this year ahead of the Glasgow Climate Summit in November. The Morrison government has shown little or no signs of joining this effort in any serious way. This is not an academic, political parlour game with no consequence. About three quarters of Australia’s markets for LNG and coal are now aiming to achieve net zero emissions by 2050, or the latest before 2060. And each of these is taking steps to lower their emissions by 2030 which will have rapid effects on the market for coal and also for LNG. It cannot be assumed by the industry or the government that the transition from thermal coal will be to LNG. For other markets governments are moving to replace coal or gas with green hydrogen or other carbon free alternatives. Meanwhile, in Australia, it’s all systems go for coal – and for gas, again, out of step with the rest of the world. The government seems determined to consign the country into being an international pariah, along with having to bear the brunt of increasingly damaging climate impacts, such as the potential loss of the Great Barrier Reef, bushfires and floods. As the US and EU get on with green recovery, Australia has missed a huge opportunity Bill Hare Read moreSo, why is the Australian government refusing to react to the clear messages from a scientific and international energy agency and many others? Why does an Australian prime minister make spurious claim after spurious claim, whether it is Australia meeting and beating its targets (it’s not) or Australia being a world leader (the opposite is true), that building a 600 megawatt gas power station at Kurri Kurri will lower energy prices (most analysts say it won’t and renewables are cheaper). Why is the Australia government willing to bet the farm and the country that the world will not implement the Paris agreement? The common denominator in all this appears to be the disproportionate influence of the fossil fuel industry and its associates on government over a sustained period of time. It’s not just the federal government – one can look for example at the West Australian government and its obsession with gas. In a larger sense it’s about the influence that the fossil fuel industry, supported by the Murdoch media and its climate denialism, has had on politics in Australia, on both major parties.
The Morrison government is emerging as an extreme ideological representative of the fossil fuel industry and seems wilfully willing to set aside the longer term interests of Australia in favour of protecting the short term concerns of this industry. Malcolm Turnbull has colourfully described this as “ideology and idiocy”, and it surely is, but with a qualification on the idiocy side because the Morrison government is clearly effective in transferring large volumes of taxpayers money to support the fossil fuel industry and carbon intensive activities in general, at the expense of the clean energy transition that we all need and will benefit from.