The heroes and villains in the Great Climate Debate

As experts and innovators involved in the production of energy commodities and energy intensive industry, this is the issue on which our members are most qualified to comment. Meanwhile, Al Gore does not really address this question in his documentary, perhaps because there are no simple solutions. Although he does urge his audience to use less hot water and install compact fluorescent light bulbs in the end credits.

The International Energy Agency has estimated that in 2030 the world’s energy needs will be almost 60 per cent higher than they are now, and that most of this will be met by fossil fuels. As a result, developing countries are expected to account for over 80 per cent of the growth in emissions.

These countries have indicated they are not willing to accept anything like a Kyoto-style binding target. Therefore major reductions will only be achieved if cost effective, low emissions energy technologies are deployed in developing countries, and more energy efficient processes of producing key commodities for them are brought online.

As a key exporter of energy resources and energy intensive products, Australia has recognised that we can play a lead role in contributing to a technological solution through collaborative international efforts. Consequently, we have become a leading partner in the Asia Pacific Partnership on Clean Development and Climate (AP6) which has as its objective the deployment and transfer of cleaner and more efficient technologies. However in order to be successful at the international level we will require carefully crafted public policies at home, aimed at reinvigorating collaboration and private and public spending on R&D.

Government-industry collaboration has already made significant progress in areas such as clean coal through the development of carbon geosequestration technologies. Briefly endorsed - but not explained - by Al Gore in his documentary, carbon geosequestration basically involves the capture and storage of CO2 from electricity generation in deep geological reservoirs. This is already being done in the oil industry as a means of enhancing the recovery from oil fields and disposing of CO2. The first geosequestration trial in Australia will commence this year in the Otway Basin.

In the documentary, Al Gore does not mention the existence of nuclear power, presumably preferring not to muddy the waters of his “moral argument”. Capable of providing base load power for developed economies with negligible emissions, one would have thought that discussion on the role of nuclear energy would be indispensable. It is reassuring that the Federal Government at least has decided that the issues raised by our participation in the nuclear fuel cycle should be publicly considered, with the comprehensive Uranium Mineral Processing and Energy Review currently underway.

As well as focusing research across all possible energy technologies - from clean coal to photovoltaics - we need to look at improving energy efficiency for existing industries.

Manufacturing and mining are the largest energy users, accounting for 49 per cent and 11 per cent stationary energy usage, which in turn is the largest single contributor to CO2 emissions.

Al Gore does not really say much about the energy efficiency in his documentary, although he takes the opportunity to make a few digs at industry. However for those of us who have moved beyond a simplistic conception of heroes and villains, finding ways to leverage industry investment into designing commercially viable energy efficient processes is a critical part of the puzzle.

Take for example Rio Tinto’s HIsmelt process for steelmaking. Currently being tested at commercial scale in Kwinana, Western Australia, the HIsmelt process uses 20 per cent less energy than traditional processes. It has been estimated that, owing to the ramp up in demand from China, iron and steel will contribute about 50 per cent of Australia’s projected emissions by 2010. So widespread deployment of the HIsmelt process has the potential to make a significant contribution to greenhouse gas abatement in Australia and overseas.

The sunk costs and long plant life of heavy industries means that there are significant risks associated with moving to the demonstration plant stage of a step change technology. Development costs for the HIsmelt process ran in to about half a billion dollars with a gestation period of about two decades.

In order for industry to continue to be willing to make important investments in these technologies, market incentives which ameliorate the risk will need to be put in place. It is disturbing that in a recent submission Rio Tinto indicated that a critical factor in its decision to proceed with commercialisation was the 150 per cent tax concession on R&D, yet this concession has recently been cut to 125 per cent.