Flat White

The scare is settled? Have the climate catastrophists won?

19 March 2019

12:17 PM

19 March 2019

12:17 PM

Evidence does not seem to matter in the debate on human-induced climate change. Hardly anyone is listening to reason. Minds have been made up.

A substantial majority of people considers human-induced climate change is underway. They do so even though temperatures and ocean levels have not risen beyond their long-term trends, there is no increase in extreme events, no increase in flooding, droughts, or forest fires. And iconic features like the Great Barrier Reef are under no stress.

Countering every solid piece of evidence showing climate stability are unscientific claims that a particular occurrence of flooding, drought, hurricanes, and hot weather is proof of the opposite. Even Barnaby Joyce is on board when he says, “No one is seriously arguing the climate is not changing; I’m driving along the road now and the trees designed for our climate, eucalyptus, are dying. The creeks are dry and have been for years now; droughts are the rule and not the exception and their duration is brutal.”

A majority is equally unconvinced by the palpable evidence of higher electricity prices and a less reliable network due to a replacement of controllable fossil fuel generation by intermittently available renewables that require both expensive back-up and high-cost transmission. The simplistic cry that renewable energy is free and must be cheaper than those ancient coal generators is accepted by professionals outside the industry, and some within it. It is becoming a dominant perspective of bankers, doctors, lawyers as well as teachers.

Brian Fisher’s study of Australian policy options to reduce emissions found the Coalition policy of cutting emissions by 27 per cent involves a tax of $263 per tonne of CO2 and that of Labor, for a 45 per cent reduction, would mean a tax of over $900 per tonne (the abolished 2013 carbon tax was $24 per tonne). Costs of Labor’s policy would be $1.2 trillion (two-thirds of annual GDP). That of the Coalition is a “mere” $80-90 billion. Addressing the Fisher report, Labor’s Mark Butler showed wilful incuriosity in claiming “firmed” renewable contracts are “only” $70 per MWh (itself almost twice the price previously prevailing) when the average market price is around $100.

Against studies showing renewables to be expensive, we see other reports from the government-funded research agencies like CSIRO, the Chief Scientist, as well as from commercial interests, maintaining that renewable energy is now cheaper than fossil fuel driven energy. Renewable energy supporters, usually without acknowledging an incongruity, also advocate subsidies via tax breaks or regulations to penalise fossil fuels. Those subsidies are often, like the “National Energy Guarantee” and the Renewable Energy Target, clothed in misleading language with the (intended) result that people do not recognise them as costs. For example, hardly anyone installing rooftop solar panels in Australia understands that half the cost of the energy the panels generate is unwittingly financed by other electricity customers.

The agenda setting is virtually complete within the developed world, where every country has implemented carbon emission restraining measures at some cost to their economies.

Dire warnings on what we are doing to the earth are flung out by America’s best known Congressional representative, Alexandria Ocasia-Cortez. But every Democrat Presidential candidate is signed onto climate change legislation, normally citing this as a means of simultaneously saving the planet and creating vibrant new industries. The measures involved would build upon the Investment Tax Credit, which lowers a solar project’s capital costs by about 30 per cent, and wind projects’ Production Tax Credit, which pays about $22/MWh for energy generated, a subsidy of 50 per cent.

President Trump rejects the emission controls central to the Paris Agreement and has rescinded Obama era requirements making CO2 capture and storage (CCS) mandatory for new coal plants. However, the Bipartisan Budget Act of 2018, extended and expanded the 2008 tax credits for CCS. The credits are $50/tonne ($35 when used to enhance oil recovery) but even with this support, only one plant is in operation.

And where there is push-back, as in Canada, the Conservatives adopt a form of subsidy like that in Australia which involves subsidising selective emission reduction programs.

Trump, however, remains a real hope as his policies show a widening gap between costs and economic performance of the US compared to other developed country economies.

And while most of the developed world will engage in virtue signalling, for the developing world this takes a backseat. Coal is talismanic, it is core to supposed causes of climate change while remaining the cheapest and most reliable source of electricity and the backbone of the future global electricity supply. Nothing Australia, nor indeed a coalition of developed countries, can do will alter this trend. And nothing Australia can do will reduce global emissions of carbon dioxide. As illustrated below, Australia has little more than one per cent of the global operating capacity of coal generators. Approved additions in China alone are four times the total Australian plant.

Source: Coalswarm

Many consider that the ALP/Green policies would soon, if implemented, be recognised as harmful and lead to an early electoral debacle. This may be wishful thinking. After all, Venezuela’s socialists survived five elections by assembling coalitions of the poor and a bloated public service who willingly voted for a party offering them favours at the expense of the affluent and foreigners. They did so even though this impoverished the nation. In the past, the only ALP government with a preconceived radical anti-capitalist agenda was that of Whitlam in 1972. The Hawke/Keating government was in many ways a reformist improvement on the Fraser government it replaced, while Rudd campaigned on paring back the size of government.

For many conservatives, the strategy to prevent a disastrous climate policy-induced downsizing of the Australian economy is to campaign on less drastic “me-too” platforms. Such an approach is akin to that which characterised conservative policies in the post-1945 period when rear-guard actions are fought against a seemingly inevitable but unpalatable shift to socialism. It took outstanding leadership of Reagan and Thatcher to capitalise on observable failures of anti-market policies to stop the rot.

Somehow those tutoring the children demonstrators, the great majority industry leaders, politicians and the public service including, if court decisions are a guide, the judiciary are on board with the notion that global warming is taking place as a result of carbon dioxide emissions. This misconception is compounded by another – that counteracting it by banning coal generation, perhaps all mining, in Australia is both feasible and low cost. The only outcome of such policies is an acceleration of the damage those in place have already done to the economy.

Alan Moran’s latest book is CLIMATE CHANGE: Treaties and policies in the Trump era.

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