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Feb 12 2012

Australia’s real climate policy

If you live in Australia you’ve no doubt heard of the Gillard Government’s climate and energy policy: a carbon price branded as the way to a “Clean Energy Future”. But just as a magician misdirects an audience’s attention, the Clean Energy Future diverts attention from Labor’s real energy policy. The Draft Energy White Paper (EWP), released on 13 December while you were distracted by the holiday season, makes clear that despite the rhetoric, the Government still intends Australia’s energy future to be as dirty as ever, and has no qualms about allowing global warming to spiral out of control.

The wrong objective

The main objective of any government energy plan in 2011 should be transitioning to zero-carbon energy sources, as is urgently needed. But according to the EWP, the core challenge is “ensuring that our energy markets deliver efficiency to minimize costs for consumers while also providing a commercially attractive environment for investment” (p. ix). It also lists four policy priorities; one is “clean energy” but as I will explain the actual policies will ensure the opposite. The others are review, deregulation, and – in direct conflict with climate action – developing Australia’s energy resources.

A fossil-fuelled future at home…

Figure 1: Sources of electricity generation in Australia from 2011 to 2050 according to two different Treasury models. Red = renewables; blue = gas and oil; purple = brown coal; black = black coal; teal = gas CCS; green = coal CCS.

At a time when the world urgently needs to phase out fossil fuels, the Gillard Government advocates a “portfolio approach” – a mix of fossil fuels and renewables. The EWP wrongly claims “Suggestions that Australia should aggressively move exclusively to one or two renewable energy technologies to supply its energy are neither feasible nor realistic” (p. xv). Actually, it is both possible and necessary: the Zero Carbon Australia 2020 Stationary Energy Plan has shown 100% renewable energy can be done with existing technologies; and it must be done, to stop reliance on fossil fuels.

The EWP envisages fossil fuels continuing to play the major role for decades to come, referring to Treasury modeling of the Clean Energy Future. Although the modeling may make some questionable assumptions, it does give an indication of the consequences of Government policies.

Currently, 90% of Australia’s electricity comes from fossil fuels. The modeling predicts they will still supply ~60-70% of electricity by the mid-2030s, after which the Government hopes its pipe dream of carbon capture and storage (CCS) will come true so fossil fuels can still provide ~60% in 2050. The projected ~40% renewable electricity is mostly from wind and geothermal, with only a few percent from solar thermal, the most promising replacement for baseload coal. While the percentage of electricity generated by coal decreases in the modeling, the percentage from gas triples from 15% to 44% by 2050.

It’s no wonder Treasury predicts no significant cut in domestic emissions by 2050, with Australia’s 80% reduction target being met by international offsets:

Figure 2: Emissions cuts by sector according to Treasury modeling. Blue = international offsets; red = electricity; green = other stationary energy; purple = transport; teal = fugitive emissions; orange = industrial processes; yellow = waste.

…and away

The projections are even worse for energy exports. Australia is one of only three OECD net energy exporters, the world’s largest coal exporter, and soon-to-be second largest liquid natural gas (LNG) exporter. Our fossil fuel exports fetch $69 billion annually. They should be phased out as quickly as possible, but the Gillard Government is greedy for even more. With rapidly growing energy demand in developing countries, the EWP enthuses about Australia’s “opportunity” to export fossil fuels to Asia. Horrifically, Treasury projects fossil fuel exports to roughly double by 2020 and triple by 2035. Existing projects alone will increase LNG exports from 20 to 70 Mt; about a third of that investment is in coal-seam-gas-to-liquid-natural-gas, illustrating the importance of the anti-coal-seam-gas movement.

Figure 3: Australian energy exports from 2011 to 2050, according to Treasury modeling. Blue = coal; yellow = gas; red = oil; purple = uranium.

Dash to gas

The Gillard Government makes the back-to-front argument that investment should shift to gas because of the need to cut emissions. On the contrary, the notion of gas as a bridging fuel is a diversion from what we urgently need to be doing, replacing fossil fuels with renewables. Undeterred, the EWP proposes a suite of policies to encourage the expansion of the gas industry, including measures to “ensure that reserves are not ‘warehoused’ indefinitely” and “provide certainty of gas supply over long timeframes” (p. xxxi).

Burn it all

The EWP estimates Australia has at least a century’s worth of coal reserves and many decades of known gas and uranium at current depletion rates (but in the EWP’s business-as-usual world, depletion will accelerate exponentially). Conventional oil (which Australia imports) is running out, but instead of electrifying transport the EWP proposes to replace it with unconventional oil or by liquefying coal and gas – both of which are more carbon-intensive. But not only does the Government intend for Australia’s enormous known reserves to be burned, it wants to go looking for even more: the EWP recommends we “maintain an exploration pipeline to ensure that discoveries of new energy resources are made” (p. xxiv).

The EWP speaks of a need to “demonstrate that we can safely and sustainably exploit our conventional and unconventional energy resources” and “ensure that our energy resources are developed in accordance with best practice” (p. xi). But the main energy resources the EWP promotes are fossil fuels, and we already know the world cannot “safely and sustainably” burn more than a fraction of fossil fuel reserves. Allowing fossil fuels burning to continue indefinitely is not “best practice”.

Brainwash the public

The EWP goes on to explicitly mention “a growing need to build further community support” (p. xi) for coal seam gas and CCS, and that “concerns held in some parts of the community about the [coal seam gas] industry’s development need to be addressed through sound and consistent regulation based on scientific data and community engagement” (p. xiv). The wording suggests to me that the Government has concluded that it can burn Australia’s fossil fuels, and seeks to further indoctrinate the public in this delusion.

Rising energy prices

The EWP also argues the era of cheap energy is over, and the public will simply have to accept rising prices. It is true that the price of fossil fuels will continue to rise because they are nonrenewable resources. However, the opposite is true for renewable energy prices, which are falling rapidly as technologies are improved and deployment is scaled up. Thus replacing fossil fuels with renewable energy will lead to lower prices in the long run.

Leave it to the market

The EWP foresees $240 billion of energy investment in Australia between now and 2030, most of it evidently in fossil fuel infrastructure. However, the Government doesn’t intend to spend this money itself, only to design policy to attract private investment. Although it admits past new power plants have been funded by government, it insists future ones be funded by the private sector. This gives an unfair advantage to fossil fuel companies, who are an established industry better placed to invest thanks to past government funding (not to mention present subsidies).

“Clean energy” window-dressing

On clean energy, the EWP merely restates the Government’s existing policies, which are nowhere near enough to get Australia to 100% renewable energy: $10 billion by 2018 for the Clean Energy Finance Corporation (which wasn’t Labor’s idea); $3 billion by 2020 for the Australian Renewable Energy Agency (whose independence wasn’t Labor’s idea); and $4 billion for CCS (a technology which may never exist). But even assuming all the promised funding is spent, it amounts at best to $13 billion for renewables by 2020, compared to a forecast $80 billion total investment in electricity generation by 2030. It is mere window-dressing for the real agenda: expanding the fossil fuel industry.

Cutting climate policies

The EWP fairly says “there remains a need to identify and address potential market gaps or barriers to efficient uptake of clean energy solutions” (p. xxxii) – but its recommendations will, if anything, erect further barriers. It recommends that the Government not introduce any new climate policies, and review all existing non-pricing measures – effectively arguing that having a carbon price means we shouldn’t do anything more. The White Paper gives the ideological justification that such policies are “market-distorting”, but that argument can be made against anything – for example, if the Government is so concerned about market distortions why don’t they cut the billions of dollars wasted annually on perverse fossil fuel subsidies?

On the same day the EWP was released, the Government announced its decision to drop an election promise (strangely, Tony Abbott has been silent on this particular election campaign “lie”). To be fair, it was a non-policy anyway: an election promise of “no new dirty coal power plants” which consisted of unknown emissions standards and a requirement to be “CCS-ready”, whatever that means.

Conclusion

Like most other countries, Australia is running at full speed in the wrong direction. This disastrous Energy White Paper will continue to recklessly expand the fossil fuel industry, particularly gas, with the intent of eventually developing all of Australia’s reserves; cover it with a fig-leaf of insufficient renewable energy and a horribly flawed carbon price; and even cut existing climate policies; all while presenting a public image of environmental responsibility. How on Earth these actions are supposed to be compatible with limiting global warming to less than 2°C is mysteriously unexplained.

Contrary to what is often said about politics, perception is not reality. Reality is the physical world with physical laws. Fossil fuel exports should be measured in tonnes, not dollars. Perception is fleeting; the physical world is permanent. And in the physical world, if governments continue to expand the fossil fuel industry despite being wrongly perceived as green, the consequences will be the same regardless of perception: the climate crisis will continue to get worse and worse and worse.

Fortunately this Energy White Paper is merely a draft; the final version will be released mid-year. The whole document is utterly wrong and should be completely rewritten. Public submissions close 16 March; I’ll certainly be making one.

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