Reality. Now that the Glasgow gab-fest of globally-warmed hot air has ended with a whimper (Greta calls it a ‘Blah Blah Blah; a greenwashing festival not a climate conference’), it is not only time for disappointed environmentalists to face the reality that national self-interest will trump (sorry) ‘good intentions’ in the end. There is also a need for a large dose of reality for those on the other side of this debate – including many writers within these pages – who excoriated Prime Minister Morrison’s (and the National party’s) ‘sell-out’ to the climate gospel when Australia’s next-to-meaningless ‘hope’ to reach net zero greenhouse gas emissions by 2050 was upgraded into an un-enforceable (and unachievable?) commitment to do so at the recent UN Glasgow climate summit.
The fact had escaped these critics that the reservations imposed by the Nationals (and supported by rational rural Liberals like Energy Minister Angus Taylor) were not only clearly – and deliberately – incompatible, given current technology, with a 2050 net zero target. They therefore involved nothing like unconditional surrender to the climate cult. But they allowed ScoMo to get away with signing for net zero in the context of these reservations. So he avoided being a standout pariah seriously risking an already threatened economically disastrous foreign investment embargo on Australia. As the green-oriented Guardian lamented, ‘The real story from Cop26: Scott Morrison’s promise to do hardly anything’.
Even more importantly, the Nationals’ reservations also gave him the licence to reject pressure to sign up for a much broader agenda than net zero by 2050, which ‘the science’ now asserts is too late to save the world. So Australia signed no pledges for tighter emissions targets by 2030, or for the Biden plan to cut methane emissions by 30 per cent by the end of the decade or for the (severely watered down) British move to end coal usage by the 2030s. The Conversation called these abstentions ‘The consequences of Prime Minister Scott Morrison’s climate policy deal with the Nationals [that] has been laid bare at the United Nations climate talks in Glasgow’. Well done, Nats. And the Toronto Globe and Mail, having described Australia as ‘something of a villain at Cop26’, said it was notable for its absences from these pledges – although it did join 122 countries in signing a global declaration to halt and reverse deforestation and land degradation by the end of this decade.
Despite Glasgow’s failure to get 70 per cent of the world’s largest emitters (most of them, like China and India, our major export customers) to meet the 2050 net zero emissions deadline, these nations still claim to aspire to net zero some time in the future. And the rejection by the world’s biggest coal users (including, embarrassingly, climate missionary Joe Biden’s America, along with Russia, China, South Africa and Australia) of European pressure to end coal use by the end of this decade still leaves these standouts with agreed moves towards cleaner fuel. They are joined by such big customers of Australian energy as South Korea, Indonesia and Vietnam all of which have signed the pledge.
But, despite the rhetoric (‘we have hit a nail in coal’s coffin’), the lid is still open and there’s no sign of a body. In Glasgow the anti-coal momentum slowed as energy shortages and price hikes in developed nations (aided by hasty moves into renewables) have caused major disruptions. The UK’s powerful draft proposal to end coal use by 2030 (2040 for developed nations), attracted environmentalist disdain when eventually, after heavy negotiations, it ended up a shadow of its former self.
The hard timeline was not merely softened from 2030/40 to the end of those decades, but the killer weasel words ‘or as soon as possible thereafter’ have turned flexibility into licence. Australian coal exports do not appear to have much to fear for quite a while.
As the Weekend Australian editorialised, after Glasgow ‘there is a growing acceptance of the difficulty of switching away from fossil fuels towards intermittent renewable energy…. Coal use is growing not only in China, India and Indonesia but also in the US, UK and Germany…. Australia clearly has been correct to defend its established coal and gas industries’. And it warned that ‘Corporate enthusiasm to do more [green investments] must not rely on government support that transfers wealth from taxpayers to vested interests’.
But where is the investment to come from? Asking ‘Can the Financial Industry Save The World’, last week’s Economist magazine estimated that shifting the economy from fossil fuels to clean sources of energy would require a ‘vast reallocation of capital’. Although listed firms that are not state-controlled provide fewer than one third of the world’s emissions, thereby limiting the role of institutional fund managers, the Economist reported growing enthusiasm for climate finance, with former Bank of England governor Mike Carney’s institutional $US 130 trillion coalition aiming to cut emissions from their lending and investing to net zero by 2050, while another group representing nearly $US9 trillion in assets has pledged to uproot deforestation from their investment portfolios.
In a recent Perth USASIA Centre seminar, a strong rise in interest from climate-conscious Europe in lower carbon footprint investments in WA was contrasted with a relative lack of interest from Asia, which is heavily invested in raw materials. However, the CIS’ Tom Switzer wrote in a recent Wall Street Journal piece that Australians look to iron-ore billionaire Andrew Forrest, not only for his own potentially huge green investment plans (including green steel, hydrogen and now a multi-million dollar PNG green energy project) but also for his view that ‘there are tens of billions of dollars around the world looking to invest in renewables and eventually in industries such as hydrogen’. And Energy Minister Taylor stressed to a London audience last week the need to decarbonise our steel and aluminium supply chains, heavy industry, cement and agriculture in order to meet climate targets
However, another reality check relates to a mistaken view that there is no pressing need for Australia to prepare for, and invest in, the very real prospect of increased demands for cleaner forms of energy from our major customers in Asia that could be at the expense of our existing trade. As Taylor said in London, Asia is slowly turning against emissions and our exports depend on providing what our customer’s want; ‘a business that refuses to take notice of the changing preferences of customers isn’t around for very long’. Emphasising the private sector’s role, he added, ‘The people who will solve the energy problem will be the entrepreneurs and innovators not the activists, bureaucrats and politicians at Cop26 – or the 25 climate conferences that preceded it’.
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