The recent release of a report by Citigroup listing Australian companies vulnerable to climate change reveals an inconvenient truth both major parties deny: that dealing with climate change will inevitably mean reducing our reliance on fossil fuels like coal. Not just for domestic power, but as a source of export revenue as other countries begin to develop clean energy.
For the Liberal and Labor parties this is a truth that dare not speak its name for fear of alienating their corporate and union bases. Yet with the market, and an increasing number of ALP elected representatives, starting to recognise the need to quit coal, the pretence will become increasingly unsustainable.
A smarter response is to start talking about how the transition away from coal will be made, and how to protect those vulnerable.
The Citigroup report essentially asked which companies would win and lose under climate policies, like an emissions trading scheme. Four scenarios were tested, including one putting a price on carbon. The most at risk companies under all four scenarios were mining, steel and oil companies like BHP Billiton and Rio Tinto.
Disappointingly, Labor's new environment spokesperson Peter Garrett, has chosen to kick off his tenure by restating his predecessor Anthony Albanese’s proposition that we can reduce CO2 emissions while continuing to use coal.
Citing Australia's coal resources as a “blessing”, Garrett’s endorsement of the “clean coal” myth made it clear how far the ALP line is from the environment movement’s. His comments were in stark contrast to his successor as current ACF President, Ian Lowe. Speaking in Newcastle recently Lowe stated the obvious: “The only way the world can meet its carbon reduction targets is to burn a lot less coal”, and endorsed as “wise” the resolution of Newcastle Council to cap coal exports and introduce a ban on new coal mines in the Hunter Valley.
Garrett's position is the standard ALP line: that you can somehow massively expand Australia's coal export industry and continue to rely on coal for the majority of our domestic power yet still reduce CO2 emissions.
The inadequacy of this position is revealed by looking at the policy of the New South Wales Government on greenhouse gas (GHG) reductions. The Premier, Morris Iemma, has committed to stabilising GHG emissions at 2000 levels by 2025. Given that we are near to those levels now this means that, in the next 19 years, emissions cannot increase.
In effect, this is a de facto moratorium on new coal-fired power stations in NSW. Indeed, when you factor in population growth, new vehicles driven by Labor's car-centred transport policies, and routine growth in emissions, it may be impossible to meet the 2025 target without actually reducing use of coal-fired power. Moreover, it is inevitable that the Iemma Government’s target will be superseded by more ambitious targets in the future as governments get serious about tackling climate change.
To only achieve a stabilisation by 2025 would lead to a climate change induced nightmare.
As far as Australia’s coal exports go, both major parties commit rhetorically to engaging in an international process, which will lead to deep reductions in GHG emissions. Yet any international regime that does achieve this will inevitably put pressure on, and indeed reduce use of, coal. How can it not? Coal is the most carbon-intensive of the fossil fuels and reducing reliance on coal through efficiency, switching to gas or developing renewables are among the easiest and quickest ways to reduce C02 emissions from the electricity sector.
The standard response to this of course, is that so-called “clean coal” will solve the problem.
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