Features Australia

The end of Net Zero?

Time to face reality

7 May 2022

9:00 AM

7 May 2022

9:00 AM

Is it the end of net zero emissions by 2050?  Queensland senator, Matt Canavan, clearly thinks so and has publicly stated his opinion, much to the chagrin of many of his wetter-than-Niagara-Falls colleagues down south.

National party candidate for the seat of Flynn in Queensland has expressed a similar view. ‘Zero net carbon emissions by 2050 is a flexible plan that leaves us wiggle room as we proceed into the future. We’ve seen the world change significantly in the last three months in terms of the use of fossil fuels, all in relation to the geopolitical situation in Europe’. The bedwetting members of the Coalition and the progressive press expressed their outrage. Don’t these white men  – who else? – realise that the future of the planet is a stake and unless countries like Australia commit to achieving NZE2050, there will be no planet left? (Yep, I can do hyperbole with the best of them.)

The reality is that both these men are making serious, if obvious, points. The energy crisis that has been hurried along by Russia’s invasion of Ukraine is prompting many Western countries to reconsider their priorities. When it comes to a choice between energy security (reliable and affordable power) and reducing emissions, the former is likely to win out.

Faced with crippling increases in power bills, rising petrol prices and factories closing or working short hours, political leaders have no choice but to take notice. Boris Johnson, who is still the prime minister of the UK, has even called for a ‘climate change pass’ while he grapples with seeking out short- and medium-term solutions to the current calamity.

Coal-fired power is being ramped up, drilling licences for gas in the North Sea are being awarded, plans are being formulated to revive the nuclear power industry and there is even the possibility of fracking being allowed in northern England.

Coal is now king in lots of places, so it’s not surprising that the international price of thermal coal has risen dramatically. From a low of around $US50 per tonne in mid-2020, thermal coal has recently been trading at around $US325 per tonne.

If you had asked most commodity analysts (as well as the economists in Treasury) at the end of 2019 where coal would be trading in 2022, the typical answer would be below $50. Even in light of recent developments, the green entrepreneur who heads up Macquarie Bank, Shemara Wikramanayake, thinks that there is no future for thermal coal and it will be essentially a stranded asset by the middle of this decade. (Gosh, we’ve heard this a few times.)

What the Ukraine invasion has highlighted is the utter hyprocrisy of many of the climate-committed countries around the world.  Germany has been happy to boast about its green credentials  – its Energiewende – to the world while increasing its dependence on piped gas as well as oil and coal from Russia.

While providing massive subsidies to renewable energy and electric vehicles, Germany’s emissions have failed to meet the targets set by the government. The decision to close its nuclear power plants looks particularly loony and, in the meantime, the lives of coal-fired power plants are being extended.

And for all the talk of Germany weaning itself off Russian gas, oil and coal, the timelines are being kept deliberately vague – particularly in respect of gas. (The fact that Germany has no dedicated gas receiving terminals complicates the picture.)

When it comes to the US, the Biden administration is metaphorically applying pressure to both the accelerator and brake.  There is an acknowledgment that the US needs to increase its output of gas and oil, in part to replace Russian supplies for other countries. So the message is ‘drill, baby, drill’. It has also opened dialogue with those bastions of political freedom, Venezuela and Iran, to increase their output of oil

At the same time, the current US government remains so committed politically to the deep green agenda that it is making new drilling and pipeline construction extremely difficult, with projects being evaluated through a climate change prism.

To answer the question whether or not it’s the end of NZE 2050, there are two important aspects. The first is that most developed countries are highly unlikely to formally move away from the target. After all, 2050 is still a long way off and the current politicians will be well and truly gone before then. To be sure, it’s more difficult for countries that have legislated the target and have binding carbon budgets to meet in the interim. But there will be ways around this constraint.

The second part of the answer involves the recruitment of the climate science academy in devising compromises to NZE 2050 that imposes very large upfront costs over the next few years (and beyond). This idea has been floated by Benny Peiser of the Global Warming Policy Foundation who has recently been visiting Australia (and whose Diary appears in this week’s issue).

In his opinion, it’s expecting too much for currently employed climate scientists to change their minds about the inevitability of unsustainable global temperature rises unless greenhouse gas emissions are significantly curtailed. Their personal investments are too great and the loss of face would be unbearable. This is also notwithstanding the relatively modest rise in global temperatures that has occurred over the past several decades, much lower than scientific predictions.

What is possible is that a group of scientists may come to a position that the rate of global warming is not quite as bad as thought and that we have more time – that is, beyond 2050, perhaps to 2070 or 2080 – to make the necessary adjustments.

In this way, politicians can turn their immediate attention to dealing with the energy crisis and enact short – and medium-term solutions (which will include the greater use of coal) while still expressing their commitment to ‘effective climate action’. Of course, there will be a great deal of voluble opposition from climate activists, but this is an escape hatch that most politicians will embrace.

So is NZE 2050 dead? The answer is yes and no. In practical terms, it’s most unlikely that many Western democracies will aggressively pursue costly emissions-limiting measures to the exclusion of energy security. But at a rhetorical level, the messaging will remain largely unchanged, supported by woke greenwashing corporations.

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