October 12, 2012

Guy Pearse

Green Army: Persons of Interest


Coal in Electricity Generation in 2012


Mongolia95%
South Africa93%
Poland83%
China81%
India71%
Australia69%
Israel61%
Indonesia48%
Germany44%
UK39%
USA38%
Japan21%

(World Coal Association)

Guy Pearse:
[Australia is] the world's third-biggest carbon exporter (behind Saudi Arabia and Russia).
(On Borrowed Time and Borrowed Carbon, Goodbye to All That?, 2010)

[Since] 2000, the Lavoisier Group has co-ordinated the local fight against the science.
(p 34)

Harold Clough [Lavoisier Group, 28 August 2000]:
[The Kyoto Protocol is the] most serious challenge to our sovereignty since the Japanese fleet entered the Coral Sea on 3 May 1942.
(p 24)

Lavoisier Group:
[There's] an understanding in the [Howard] Cabinet that [climate] science is all crap.
(Quarry Vision, 2009, p 44)

Carbon Tracker / Grantham Research Institute on Climate Change and the Environment:
… 60–80% of coal, oil and gas reserves of listed firms are unburnable.
[The] top 200 oil and gas and mining companies have allocated up to $674 billion in the last year for finding and developing more reserves and new ways of extracting them.
(Unburnable Carbon 2013: Wasted capital and stranded assets, p 4)


Contents


Big Coal: Australia's dirtiest habit

The great moral challenge of our generation

Quarry Vision
Would you like to do more?

GUY PEARSE


PhD, Australian National University.
Former Research Fellow, Global Change Institute, University of Queensland.
Former Speechwriter for Senator Robert Hill, Environment Minister in the Howard Government.

  • Big Coal and the coal barons, Late Night Live, ABC Radio National, 2 October 2013.
    Guy Pearse: Co-Author, Big Coal: Australia's dirtiest habit.
    With China teetering on the brink of making an historic shift away from coal, Australia is likely to be far better off as a supplier of skills and technology needed in a carbon constrained world.
    Overall Australia's contribution to climate change has been getting much worse … because of its coal exports …
    If we look at what [the clean energy package] was supposed to save in emissions by 2020 … the coal export increase we've had since just 2007 has already wiped that out.
    And if the export expansion keeps going the way it's projected to, it'll wipe it out another 10 times over in the next decade or so …

    So we're going to see much more overt support for turbo-charging the coal export boom.
    And we won't see any attempt to use the fig leaf of carbon capture and storage as an excuse for continuing to ignore the consequences of that. …

    [If] we look at the emissions over the five years or so, we've essentially added the emissions of a State of Queensland to our contribution to the global problem.
    So the idea that things are getting better as a result of some of legislation we've seen go through is really a grand facade. …

    [If] there's a bright side … it is that that might become more visible to more people, as we see the new federal government become much more open in its support for expanding the exports without any excuses and with the Palmer party in the senate (and possibly the house of representatives) singing from much the same song sheet.
    And also putting a much more openly sceptical message about the science as well. …

    In the Galilee basin [in Queensland] we're looking at some of the biggest mines the world as ever seen.
    Many mines that would individually be the world's biggest coal mine, if they proceed.
    [Each one of those] mines will add the equivalent of the [emissions of the entire State of Queensland] and there will be quite a few of them if it proceeds.

    While there has been much reporting that the coal boom is over, really what we're seeing is [investors temporarily] pulling back and waiting for the current oversupply of that market to wane a bit …
    [The] idea that … a global trade in carbon will kill off coal is wishful thinking in the extreme. …

    We saw some highly lorded legislation factoring the impact of coal mines on water under the [previous] Labor government.
    We had this ludicrous situation where new coal mines were still getting approved on a pretty grand scale but the approval process ignored the biggest environmental impact of those mines which is its impact on the climate. …
    [And so under the new Coalition government] we'll just see a continuation of what we saw [under Labor]. …

    The environmental movement has made a judgement that they are better off going for incremental gains rather than going for … the hardest of all mountains to climb which is coal exports.
    [So they've focussed on] renewable-energy targets, carbon pricing and the like, and really factor out our biggest contribution to the problem, the coal exports, from their campaigning. …
    The coal campaigns by and large don't mention climate change, they mention things like dredging, they mention things like coal dust, they mention things like water, but they … ignore the main problem and the climate campaigns ignore the coal — so they tend to focus of renewables targets and domestic emissions. …

    [When] you start looking at what's happening with coal consumption and production worldwide, it's still going up at a very unsustainable rate but the vast majority of that growth is happening in developing countries where there's no real attempt to rein it in. …
    We're seeing many of the banks, which paint themselves green, still investing very heavily, even government sponsored banks, in some of this expansion …

    We've got an [Energy Minister] who's on record some years ago as saying [carbon capture and storage] won't help us in the next 10-20 years.
    We've got Treasury saying it won't help us unless we've got a carbon price of $100 a ton which we know won't happen until the mid-2030s or later.
    We've got an International Energy Agency saying we need 3,000 clean coal plants in order for [CCS] to come the rescue — which means one every 2-3 days between now and mid-century. ...

    Coal is a $40-50 billion [slice] of a $1.2 trillion industry.
    It doesn't generate many jobs; less and less jobs as time goes on; fewer jobs as a proportion of the economy than it did 100 year ago …
    It doesn't produce that much in the way of taxes.
    Even in NSW and Queensland, you're talking … single digit percentages and less than 10 even in a good year.
    And much of that contribution it makes to our GDP is investment [into] infrastructure which is really private used by the industry itself [—] railways and ports and the like.
    So it's not really trickling down into your pockets and mine. …

    We need to realize that we're more than a one-trick pony, economically.
    Most of us don't work in the coal industry.
    We're less and less likely to have a future in the coal industry.
    The alternative industries, especially in energy, are far more job intensive.
    That's where the future is.

  • On Borrowed Time and Borrowed Carbon, Goodbye to All That? On the Failure of Neo-Liberalism and the Urgency of Change, Robert Manne and David McKnight (Editors), Black Inc, Agenda, 2010.

    [Under Rudd the] Kyoto treaty was ratified, a 20% renewables target introduced, an emissions trading scheme proposed, a 25% emission reduction target for 2020 considered, and billions are being budgeted to clean up coal and build large solar-power stations.
    Yet … once the reduced land clearing that occurred prior to Rudd's election is factored out of the calculations, the cumulative impact of the Rudd government's policies is to increase Australia's greenhouse pollution by 2020.
    Even by 2050 … actual greenhouse pollution in Australia … will be roughly what it was in 1990. …
    (p 241)

    … Australia is preparing to buy as many carbon credits offshore as is needed to meet post-Kyoto targets without cutting emissions here.
    It also wants the United Nation's greenhouse accounting rules changed … to
    • exclude most of the land-related emissions [and]
    • [include] an almost limitless supply of carbon offsets from forest regrowth, tree-planting, agricultural and other land-use changes — all of which substitute for industrial emission cuts.

    [The] proposed emissions trading system gives the worst offenders on average more than 80% of their emission permits free.
    [Infrastructure] that will double coal exports is being heavily subsidised by federal and state governments.
    [And the impact of] increased renewable-energy target and various other green subsidies [for] businesses and consumers … is negligible — erased more than twenty times over by the emissions generated by doubling coal exports. …

    [Under the proposed Carbon Pollution Reduction Scheme], free permits worth perhaps $4-5 billion annually [until 2020] would be gifted to a small number of mostly foreign-owned polluting industries — more in total than the Rudd government's entire 2009 stimulus package. …
    Even if Australia adopted a 25% target for 2020, greenhouse pollution from our dirtiest industries would still rise by around 13% by 2020, because their free permits would be quarantined against any increase in Australia's emissions reduction target.
    (p 242)

    To achieve a 25% cut, the rest of the economy would have to cut emissions by an estimated 69%. …
    The only way to make the plan work is by purchasing a very large quantity of carbon credits.
    (p 243)

    Currently, Australia doesn't have to include most of its land-based emissions in its greenhouse accounts.
    This hides a little-appreciated 657% increase in land-based emissions since 1990, an 82% increase in Australia's overall emissions.
    (p 244)

    [Emissions] generated offshore by [Australia's coal exports] exceed our national emissions total and make us the world's third-biggest carbon exporter (behind Saudi Arabia and Russia). …
    The coal industry has even been offered $1.5 billion compensation in lieu of free permits under the CPRS.

    [We] are assured that … carbon capture and storage (CCS) will clean up Australia's coal use …

    Treasury's modelling suggests that CCS will only become commercially viable by between 2026 and 2033, and the deployment of clean-coal power stations would take decades.
    In our export markets it would take even longer …
    (p 245)

    [The] coal industry is spending about one-thousandth of what it earns per tonne of coal on development of CCS. …

    The renewable-energy target will … cut Australia's projected emissions in 2020 from 124.8% of 1990 levels to 121% of 1990 levels.
    The extra renewable capacity will be met mainly by wind farms that were already on the cards and whose output was pre-purchased in some cases by state governments to offset the emissions from new desalination plants.
    (p 246)

    [The] benefit generated by insulating 2.7 million homes and adding solar hot water to 400,000 homes is erased by just one large emission-intensive project. …

    [The] emissions associated with [expanding Queensland and New South Wales coal] exports will erase the benefit of the increased RET and new energy-efficiency measures thirteen times over.
    (p 247)

    The combined impact of all Rudd government measures … is to shave perhaps 30 million tonnes [annually] from the actual greenhouse pollution …
    [By] 2020, greenhouse pollution easily be 650 million tonnes — more than 10% higher than today — and rising.

    And by 2030, if Saudi oil production declines as anticipated, our coal exports may well have made us the world's largest carbon exporter of all.
    (p 248)

    [Neoliberal] commentators like Terry McCrann … believe:
    [Emitting] carbon dioxide is this country's core and irreplaceable comparative [economic] advantage!
    … Australian commentators to quip that Australian industry is 'world's best practice,' and that if it relocated to countries like China, emissions would be much higher.
    [However, China has been] producing its coal-fired power more cleanly than Australia [for some time.]
    China's coal-fired power stations now use fewer than 350 grams of coal per kilowatt hour …
    [The] average in Australia is
    • around 470 grams per kilowatt for black coal, and
    • 1500 grams per kilowatt for brown coal.
    (p 249)

    And while China is building the equivalent of a 1-gigawatt coal-fired power station every week or so, between 2006 and 2009 it closed down over 54 gigawatts of coalesced capacity — roughly the equivalent of closing down all of Australia's coal-fired capacity twice [over.]
    [Electricity-industry] advocate Keith Orchison has warned:
    This is allowing China to leapfrog the less efficient coal technology that is dominant in the developed world, including Australian. …
    Australia is yet to close a single coal-fired power station for the explicit purpose of reining in greenhouse emissions [while] China has been closing the equivalent of a a gigawatt coal-fired power station every three weeks. …

    For every dollar of respective GDP, China is spending nearly double what we are on expanding renewable generating capacity.
    As a result, the very competitive advantage that our leaders want to protect has already slipped through our fingers.
    (p 250)

    Delay already means that we face a much harder and more expensive transition.
    If it is unthinkable to consider the costs involved in phasing down … coal production and use now [—] just imagine what those costs will look like once we've doubled coal exports, built new coal railways, new aluminium smelters and steel mills. …

    Under the current plan, by 2020 we could wind up spending $10-20 billion a year buying carbon permits and credits from offshore to sandbag our existing coal-fired economy.
    We might meet post-Kyoto commitments on paper, but we will have little to show for this annual investment of 1-1.5% of GDP beyond a coal industry twice its current size, a dirtier economy and a growing carbon credit-card bill. …

    How much more … might we gain as a people if we spent that money building a new economy rather than paying offshore carbon-rent to prop up the old one? …
    What might the big steps towards a post-carbon economy in Australia look like?
    • [Government] targets and timetables that seek to reduce overall emissions that occur in Australia to near-zero by mid-century …
    • [Investments] in biosequestration [aimed at achieving a net reduction in] atmospheric greenhouse-gas concentrations. …
    (p 251)

    • [A] carbon-pricing scheme that didn't outsource economic transformation or let the worst offenders off the hook.
      [For example, an economy wide ETS] that capped emissions in Australia in 2020 at 30% below 1990 levels …
    • [Limiting imported] credits and permits and domestic land-related offsets (like soil carbon) … to around 15% of the total allowed under our ETS. …
    • [Surcharges] on emission-intensive purchases [to cross subsidize] rebates on … low-emitting alternatives …
    (p 252)

    • [Phasing down] the coal industry [by 2020 so that] coal is burned [only] where the vast majority of emissions is … captured and safely stored. …
    • [A] moratorium on new mines, export approvals and coal-fired power stations.
    • [No further privatization of] coal-related assets such as power generators, retail businesses, railways and port infrastructure — all of which are obstacles to a post-carbon economic transition. …
    • [Dumping] subsidies for fossil-energy use (worth some $9 billion annually) … the free permits proposed under the [Carbon Pollution Reduction Scheme] and the exemptions given to big polluting sectors from the RET [and spending that] $15 billion [of annual savings on matching private investment] dollar-for-dollar [to replace] coal-fired power with renewables …
    (p 253)

    • [A] renewable-energy target [of] 50% by 2020 [including] transport. …
      Every one million cars powered with electricity from renewable sources cuts around 4-5 million tonnes in greenhouse emissions. …
    • [Investment of] 20-30% of [ETS revenue towards] helping [developing] countries to
      • industrialise less carbon-intensively
      • protect their forests and
      • adapt to the impacts of climate change.
      With … perhaps $3 billion annually, Australia could easily prevent the release of 1.5 billion extra tonnes of CO2 between now and 2020.
    (p 254)

    Some will argue that the … approach outlined here [would be] economic and political suicide.
    [Yet] the agenda described would almost certainly be revenue-neutral for government — and it may well be cheaper.
    Most of the measures described here … merely redistribute the burden between different sectors of the economy …
    The only measure that appreciably changes the overall cost is the limit on outsourcing, which would mean a relatively higher domestic carbon price. …
    The combined proceeds of ETS revenue and scrapping carbon subsidies more than covers the cost to government of a coal phase-down, a coal-to-renewables switch and investment abroad in clean development and forest protection.
    (p 255)

    The argument that coal-dependent industry would flee Australia is almost entirely without foundation.
    The industries in question — most notably aluminium — might well choose China because its coal-fired power is less emissions-intensive, but not just to avoid a carbon price here. …
    [Many] factors other than carbon pricing influence long-term investment decisions.

    [For] the sake of argument let's assume … that half of the aluminium, steel and other emission-intensive sectors in Australia did shut down over the next decade, and that we phased down Australia's involvement in coal production.
    By 2020, GDP might be $100 billion lower than anticipated, but it would still be nearly a third bigger than today.
    Rather than doubling in size by 2034, our economy would double in size by 2037.
    There would be … perhaps 175,000 less [jobs] than might have been the case in the 2020s, but according to the ACTU there would have been almost as many 'green-collar jobs' created even if Australia did nothing.
    In a growing Australian economy that was using renewable-energy mandates and a real ETS to unleash a large-scale switch from fossil energy, there would be no net job losses whatsoever.

    [The loss of] significant sources of foreign currency [would be offset by steadily] increasing exports of liquefied natural gas, iron ore, aluminium feedstocks, light metals such as lithium (which will be in high demand for use in electric-vehicle batteries) and a host of other minerals.
    (p 256)

    Today the investors who might drive economic transformation sit on the sidelines …
    The agenda described here [would leave] investors in absolutely no doubt [about the government's commitment to a clean energy future.]
    (p 257)

    [If] we transform our [economy] we can cut Australia's overall contribution to the problem by some 60-80% in around a decade, achieving around half of that by the phase-down of coal exports.
    Our GDP would be much higher than today in absolute and per-capita terms …
    There would be more jobs created than lost [and] we would have decoupled emissions from economic growth in absolute terms …
    (p 258)

    [A] radical reduction in Australia's greenhouse contribution is compatible with our ongoing need for economic growth …
    [We] can and must have sustainable economic growth.
    (p 260)

  • Quarry Vision, Quarterly Essay No 33, Black Inc, March 2009.

    Quarry Illusions

    John Edwards [Chief Economnist, HSBC, 2006]:
    [The entire mining] industry accounts for only 5% of GDP …
    It employs just 1% of the workforce — half the share it employed twenty years ago. …
    The recent commodities boom [doubled] mining's share of GDP in 2007-08 to around 8%. …
    Factor in minerals processing, metals production, services to mining and the fossil-energy sector, and the Australian quarry all up accounts for less than 15% of GDP …
    By contrast, services such as retail and wholesale trade, finance and insurance, construction, health, education, business and personal services, and recreation generate more than 75% of GDP
    (p 11)

    Australia's mining companies and energy producers are majority foreign-owned, so most of their profits go offshore.
    BHP Billiton no longer publicly refers to itself as the "Big Australian" because it's no longer Australian-owned. …

    British and Chinese interests own most of the electricity produced with brown coal in the La Trobe Valley …

    [We] provide less than 1% of China's coal, and most of that goes to steel mills rather than power stations.
    (p 13)

    [The] mining industry claims to pay $18 billion in state and federal taxes …

    [On the other hand, mining,] metals and energy industries enjoy billions of dollars in tax breaks, fuel excise rebates, cheap electricity contracts, royalty holidays and infrastructure.
    (p 14)

    The taxpayer provides some $9 billion annually in energy and transport subsidies …
    [Much] of this goes on fringe-benefits tax breaks, which encourage us to drive to work, [however,] plenty also helps to raise profits in the resources sector. …
    In Victoria … state and federal governments are jointly spending over $150 million to help build a new brown-coal-fired power station. …

    [Roughly] 90% of most retirement income comes from something other than resources stocks.
    (p 15)


    Fire In The Hole


    Developed countries are responsible for close to 75% of the emissions caused by fossil-fuel burning since 1850 …

    In developed countries, emissions will need to peak in the next five to eight years, with rapid absolute cuts well under way by 2020.
    (p 20)

    [Oil] production has already peaked in more than fifty countries [and] the ranks of oil exporters are thinning as countries keep more of their own supply.

    The global financial meltdown has suppressed oil prices temporarily …
    [In] the longer term dwindling supply and mushrooming demand will ensure that prices resume their upward march [along with the costs] of producing very many goods and services. …

    [With the] quadrupling of oil prices seen in recent years … biofuels became more profitable.
    More land and existing crops were diverted from food markets [reducing supply and driving up food prices].
    (p 21)

    Much of Australia's quarry remains extremely valuable in a carbon-constrained world [and] Australia has some of the world's best renewable-energy resources …
    (p 22)

    Not one credible piece of economic research suggests that making deep cuts in emissions by 2050 would cause even a temporary recession …
    [At most] deep cuts would delay the trebling of the economy and doubling of real wages by a few years … later this century.
    Australian Bureau of Agricultural and Resource Economics (ABARE):
    [Halving] Australia's emissions by 2050 would result in GDP growing 247% rather than 281% …
    (p 23)

    By relying almost totally on land-clearing cuts and forestry to achieve the target, Australia has avoided any serious action so far.
    (p 24)

    [We] are stuck with one of the dirtiest electricity systems in the world at the worst possible time.
    With every upward tick in the carbon price, our cheap coal becomes a greater competitive liability.
    (p 27)

    Some of the same companies threatening to flee Australia unless they are granted carbon subsidies are also investing billions of dollars elsewhere in renewable energy. …
    Rio Tinto smelts aluminium with hydro power in Canada, Scotland, Cameroon, New Zealand and Brazil …
    BHP Billiton does the same in Brazil and is said to be considering a new smelter in the Congo.
    Rusal and Hydro Aluminium are two other producers who rely heavily on renewables overseas, but not here.
    Alcoa happily smelts aluminium in Iceland, Canada, Brazil and Ghana with hydro power and is looking to expand with geothermal power.
    (p 28)

    … Barack Obama is a longstanding supporter of the coal industry, who says "clean coal" can make America energy-independent.
    (p 29)

    A generation ago, our leaders showed courage and vision in pushing for unilateral trade liberalisation …
    They were right to turn Australia's economy outward …
    Today [that same generation] has much of it wrong on climate change.
    (p 30)


    The Carbon Lobby


    [Fossil-energy] producers and their biggest Australian customers [have long] exerted a disproportionate political influence.
    As mostly foreign-owned, capital-intensive businesses … the only real ace in their pack was to threaten to take operations elsewhere.
    The best way to avoid regulation [was to conflate] the national interest with their own. …

    Their strategy was to prevent action by Australia, and if that failed, to delay action, and if delay failed, to shift the burden of emission cuts elsewhere.
    This meant nurturing seeds of doubt …
    It meant persuading government …
    • that greenhouse constraints would wreck the entire Australian economy.
    • that Australia was a special case: an emission-intensive country with relatively less scope to decarbonise [and]
    • [that] Australian action had to be made conditional on action by other countries
    (p 31)

    For Australia's emerging carbon lobby, success depended on the political leadership hearing these messages repeatedly from all the sources they trusted.
    [To this end] the key players wrote big cheques to the main sources of economic, scientific, ideological, industry, union and political advice for Australian governments.
    (p 32)

    Rather than risk damaging their brands, they fund front groups to challenge [the scientific consensus.]
    A small global network of "experts," many of them with no relevant climate-science qualifications, have been funded … to ensure a constant stream of submissions to government inquiries, conference speeches, bogus petitions, documentaries and media commentary [to create the illusion of division within] the scientific community …
    (p 34)

    [Western Mining Corporations] former CEO Hugh Morgan launched the Lavoisier Group, and senior staff ran it.

    [Neo-liberal] think-tanks, such as the Melbourne-based Institute of Public Affairs [funnel money from] emission-intensive companies [into promoting climate change denialism]. …
    The IPA [created] the Australian Environment Foundation, a front group [chaired by Jennifer Marohasy and] designed to look like a grass-roots environmental organisation [to run the IPA's anti-environmental] campaigns since 2003.
    (p 35)

    It doesn't matter that the greenhouse sceptics have been dismissed by the public as … long as they are taken seriously by enough senior politicians, business leaders and media commentators. …

    [The] CSIRO has publicly acknowledged [that it] gave polluter clients the right to veto research findings they didn't like [from] being made public. …

    Various Cooperative Research Centres, along with the Centre for Low Emission Technology, have been established with carbon-lobby backing.
    (p 36)

    The aim [is] to keep the idea of clean coal alive politically: a "permanent alibi" as Robert Manne recently put it.
    [As] long as CCS might be "viable" one day … no Australian government will countenance coal's demise.
    (p 37)

    [Polluters] have channelled much of their lobbying effort through the Australian Industry Greenhouse Network …
    Both major political parties have received millions since 1998 from organisations … represented by the AIGN.
    (p 38)

    [Most] of the key lobbyists and industry association heads have worked previously as senior officials or ministerial advisers in the federal resources, energy, trade or transport portfolios. …
    • [When] Woodside's Liberal-leaning lobbyist called John Howard's environment minister, it was the former chief of staff of that office …
    • [When] Woodside's Labor-leaning lobbyist rang, it was the former general secretary of the Labor Party.
    • When the LPG industry's lobbyist rang, it might have been the former federal director of the Liberal Party.
    • When an economist acting for the LNG industry calls … it's probably the former head of [the Australian Bureau of Agricultural and Resource Economics.]
    • [When] the head of the Australian Coal Association called, it was an ex-prime-ministerial adviser …
    • [When] the BHP Billiton external-affairs boss rings, it's a former adviser to two prime ministers and … an ex-national secretary of the ALP
    (p 39)

    Board appointments have been another great way to lock in access [to] government. …
    [The] coal-mining contractor Theiss … invited former ALP environment minister Ros Kelly onto its board years ago.
    [Macarthur Coal] is chaired by former Queensland treasurer Keith De Lacy. …

    Gary Gray [(Labor)] and Andrew Robb [(Coalition) both worked as carbon lobbyists] before being elected to parliament.
    (p 40)

    [The] Institute of Public Affairs has been dominated by mining company executives …
    [Eleven] of the thirteen presidents of the Business Council of Australia have been directors or executives from the resources sector. …

    Policy is contaminated by patronage at every turn.
    • [Internal] economic advice might come from ABARE, but much of the underlying money and oversight comes from the carbon lobby;
    • [External] economic advice might come from an "independent" consultant, but carbon-lobby cash and assumptions are usually behind it;
    • [Scientific] advice might come from CSIRO, Cooperative Research Centres or the chief scientist, but there is still carbon-lobby cash, oversight and censorship …
    • [Think-tank agit-prop flows from] polluter cash and oversight [and]
    • [Party] political fundraising [exerts further political leverage.]
    (p 41)

    [Former bureaucrats turned] carbon lobbyists have been invited into government departments to draft Cabinet submissions and ministerial briefings. …
    [The] carbon lobby was secretly invited to develop government policies, funding and PR for "super dooper" low-emission technologies (and the renewables sector cut out) …
    [A] sceptic was made head of the Cooperative Research Centres Association …
    [Another was charged with] handing out federal money for low-emissions projects. …
    [A] former coal-industry PR man was made the Australian's environment reporter …
    (p 42)

    The carbon capture of Howard's government was as easy as it was thorough.
    (p 44)


    A New Age


    [Had] the iron triangle in Canberra been looser, Kevin Rudd might have done much more of his political gardening on the green side of the debate.
    Instead, all the pressures of the day inclined the canny politician toward the appearance of action over the reality.
    (p 51)


    Prophets For Profit


    [Post-2007 the AIGN's ranks expanded to include:]
    • the Australian Trucking Association,
    • the Australian Food and Grocery Council,
    • the National Association of Forestry Industries and
    • the Australian Industry Group
    [They gained increasing the support from the Australian Worker's Union and the Construction, Forestry, Mining and Energy Union.]
    They also had strong backing from Labor [State] governments in Queensland, New South Wales, Victoria and Western Australia [driven by the potential revenues of expanding] coal and LNG production.

    [The] AIGN and its [allies] bombarded the political process … with every imaginable argument to minimise emissions targets, delay emissions trading and lock in exemptions for themselves. …
    (p 53)

    [In Kyoto in 1997] the Howard government had made emissions trading a precondition of Australia signing a global agreement [which it then refused to ratify. …]
    [Yet in 2008 industry was claiming that] no one could have seen this coming …
    Brad Page [CEO, Energy Supply Association of Australia]
    [Emissions trading represents the] arbitrary destruction of shareholder wealth through a dramatic change in government policy [that] could not have been reasonably anticipated.
    ("No mercy for dirty power says Garnaut's climate report", The Australian, 4 July 2008)
    The aluminium industry, the steel, lead and zinc industries, cement, LNG and paper [all threatened to] move offshore unless they were … fully compensated for [the impact of a carbon price.]
    (p 54)

    In reality, very little of Australia's economy is much exposed to carbon pricing, and the number of genuinely vulnerable jobs is a small fraction of the million claimed by the Australian Industry Group …
    John Hewson:
    You just don't throw an aluminium smelter in a backpack and take it off to Indonesia.
    (p 55)

    (For a time, I confess I used to deliver none-too-subtle hints for BHP Billiton in this vein to the Howard government …)
    (p 56)


    Enter Ross Garnaut


    … Australia should offer to cut emissions
    • by 25% by 2020 as part of a comprehensive global agreement targeting 450ppm C02-e. …
    • by 10% by 2020 if a global agreement targeting 550ppm was achieved [and]
    • [by] 5% emission cuts by 2020 as an unconditional offer. …
    (p 58)

    Garnaut deemed the 25% target "unachievable" on the basis that it was "consistent" with a global agreement targeting 450ppm, whereas his 10% target was "achievable" because it was "consistent" with the more realistic 550ppm global goal.

    [Garnaut] linked hypothetical Australian emissions targets and global parts per million scenarios. …
    [While] the contraction and convergence idea helps to inform international negotiations, [there is no necessary connection between] Australia's emissions target [and] 450ppm, 550ppm or anything else. …
    Our emissions cuts, and the way we deliver them, are informed rather than dictated by science and economics.
    It's ultimately a political and moral decision about what constitutes a reasonable and affordable contribution to an effective global response.

    Having recommended that the Australian government set a very low target if international negotiations faltered as he expected, Garnaut endorsed almost every loophole required for Australia to export its emission obligations and for our worst polluting sectors to offload theirs.
    (p 59)

    The biggest polluters should have most of their emission costs paid for by cleaner businesses and consumers until there was a more level international playing field – something that might take decades.
    (p 60)

    If Rudd accepted Garnaut's advice, Australia might achieve its [Copenhagen] target by decreasing deforestation in other countries without making any "actual emission cuts" at home.
    (p 61)

    [Rudd's Carbon Pollution Reduction Scheme] largely embraced the greenhouse mafia's plan to avoid emission cuts, and placed various obstacles in the way of the … transformation to a low-carbon economy …

    Against Garnaut's recommendation
    • coal-fired power generators would be compensated for the decline in the value of their businesses.
    • Investors who made dirty investments knowing carbon pricing was coming would be [rewarded] for doing so [and]
    • transport would "initially" be carved out of the [scheme even though it generates] over 15% of Australia's greenhouse pollution …
    (p 62)

    [Industries] responsible for 37% of Australia's greenhouse emissions would end up paying for one in every five tonnes of the carbon dioxide they generated. …

    [Rudd's government] showed a seemingly boundless faith in carbon capture and storage. …
    A former coal-industry lobbyist was tasked with guiding the government's CCS strategy.
    (p 63)

    There would be no moratorium on building new coal-fired power stations, nor any time limit set by which new coal-fired generation needed to be "clean." …
    [James Hansen] had written to Rudd … urging Australia to exit coal mining and exports until CCS arrives on scale and to block any more conventional coal-fired generation.
    He was [ignored. …]

    With [60-90% of] permits to be given away to a few big polluting industries, the task of cutting Australia's emissions would become commensurately harder for "non-assisted businesses" and consumers.
    … ABARE had advised the Howard government that carving out the biggest emitters would double the carbon price for everyone else [without] nearly as much compensation as the Rudd government now proposed. …
    [This would treble] the eventual carbon price paid by working families [so as] to protect Australia's worst polluting companies …

    … Treasury modelling suggests that around 5 million hectares of new [tree] planting might save on average 25 million tonnes of C02-e per year between now and 2050 [offsetting] around four large coal-fired power stations. …
    (p 64)

    The Kyoto Protocol allows rich countries to buy credits by financing emission cuts in poorer nations under a program called the Clean Development Mechanism (CDM).
    As a result, a substantial amount of money has been transferred to fund highly worthwhile energy-efficiency and renewable-energy measures. …
    [These] credits were only ever meant to be "supplementary" rather than a substitute for cuts by developed countries. …

    [However,] with deforestation in Papua New Guinea and Indonesia accounting for some 1750 million tonnes of CO2 per year (around three times Australia's annual emissions), credits from these countries could enable Australia to meet cheaply almost any conceivable 2020 target by merely writing cheques.
    (p 65)

    … Treasury's modelling in late 2008 revealed … that Australia had no plans to cut its actual emissions by anything like 60% by 2050 but would instead rely heavily on buying emission credits offshore.
    (p 66)


    Fossilised Government


    As the end of 2008 approached [Rudd proclaimed that] Australia was leading the world on climate change.
    (p 67, italics added)

    Rapid population growth made … our 5-15% target [equivalent] to a 34-41% [reduction in per capita emissions by 2020. …]
    [However, around] two-thirds of the per capita improvement came from land-clearing cuts and forests planted before [Rudd] came to office. …
    … Australia's per capita emissions are the highest in the developed world and would still be more than twice as large as the EU's by 2020. …

    Countries [like Australia] that use immigration programs, "baby bonuses" and other inducements to deliberately accelerate population growth should have to cut emissions per capita more deeply.
    Moreover, the climate cares only about total emissions accumulating in the atmosphere …
    [That] is what drives global warming, not per capita emissions. …

    The government said it expected that by 2020, 35% of permits would be provided free for eligible industries. …
    [If] those issued free permits used rather than sold them, a 60% cut in overall emissions would only be possible if everyone else made cuts of more than 90%.
    (p 69)

    If the proportion of permits gifted to polluters rose to 45% by 2020 (as the government expected it would once agriculture was included), a 60% cut in actual emissions in Australia would be impossible even if the rest of the economy cut its emissions to zero. …

    The question was whether voters would realise what was happening amid the flurry of cheques. …
    The only group of households not assisted would be the very wealthiest.
    (p 70)

    Most of the Canberra press gallery … were mesmerised by the political wizardry of the government.
    The long-term national interest, the economic and environmental implications and the palpable sense of betrayal felt by millions of Australians who expected better from Labor – these things were much less important than Labor's impressive political acrobatics.
    The whirlwind of cheques leaving everyone feeling no worse off, the deft management of expectations and the strategic positioning of Labor in the sought-after middle ground – these things were paramount.
    Fiscal churn on this scale was [truly] a thing of beauty.
    (p 72)


    The Problem With "Clean Coal"


    [Massive-scale] carbon capture and storage infrastructure that must be virtually completed [in] ten to fifteen years … if there is to be any hope of avoiding catastrophic climate change. …
    (p 77)

    [The] coal we burn at home and export generates close to a billion tones of carbon dioxide annually …
    Our exports … generate almost 700 million tonnes of CO2 annually, which is almost 150% more than Australia's [annual domestic] greenhouse-gas emissions.
    (p 78)

    [Our] coal exports are projected to nearly double [by 2029-30. …]

    [There] are only two ways to change the equation:
    • either CCS saves the coal industry, or
    • we phase out our role in coal mining and coal burning.
    The former is … impossible …
    [The latter] unthinkable.
    (p 79)

    International estimates suggest no commercial-scale deployment of CCS plants before 2020 in developed countries, and in developing countries not until at least 2025.
    The International Energy Agency reckons that it might take a carbon price of A$100 a tonne before CCS becomes viable (much higher than for renewable options such as wind and solar-thermal power).
    [The] IPCC doesn't expect carbon capture to contribute much until well into the second half of this century …
    (p 81)
    John Boshier [National Generators Forum]:
    We think that 2020 is the earliest [CCS] can really be commercialised.
    (Going underground: carbon dioxide storage experiment, 7.30 Report, ABC Television, 7 April 2008)
    In the meantime … well over 1000 conventional coal-fired power stations will be added in the developing world.
    That would add around 8 billion more tonnes of CO2 annually [–] more than a quarter of the … global total produced by fossil-fuel consumption …
    Under such circumstances, there is … no way that global emissions can peak by 2015 [to avoid the worst impacts of climate change] or even 2030 …

    When "commercial-scale" power stations are finally built with CCS, they're likely to
    • cost twice as much,
    • use a third more coal (in order to power the carbon-capture process), and
    • produce electricity that is twice as expensive. …
    Installing new CCS technology in old stations is likely to be [so expensive that it will] make more sense to build a new power station than to retrofit an existing one.
    (p 82, parentheses added)

    With coal-fired power use projected to double over the next few decades, there is … no prospect of CCS keeping up.
    [Senior] officials at the International Energy Agency say half of China's coal-fired power plants, at most, will be fitted with CCS in our lifetimes. …
    A web of pipelines linking power stations and storage sites would have to criss-cross some of the most densely populated parts of the planet. …
    The infrastructure required for CCS …
    • would cost a fortune …
    • arrive too late [and]
    • [be] the most expensive exercise in futility the world [has ever] seen.
    (p 83)

    The G8 has set a target of a … twenty "industrial-scale" CCS projects by 2020.
    [This] is less than one-hundredth of what's required to deal with emissions from existing coal-fired power stations.
    (p 85)


    Sunset On Coal


    [If the coal industry was phased out] GDP would double by 2031 instead of a year earlier.
    Employment would recover … just as it has bounced back after the loss of almost five times as many manufacturing jobs since the mid-1990s as coal mining provides today. …

    [The] CO2 emissions generated by our coal exports are on track to rival those generated by Saudi oil exports today. …
    (p 88)

    [We] should plan to phase it down over the next five to ten years so that no Australian coal is being used without CCS by 2020.
    There should … be a moratorium placed on any new coal mines or conventional coal-fired power stations.

    Any costs arising from legal action against the phase-out plan should be funded either through a levy on the coal industry or by emissions-trading revenue currently earmarked to compensate emission-intensive industry.
    This should also fund adjustment costs facing affected communities and workers. …

    If such a phase-down happened gradually, it would have a significant (but manageable) impact only on our largest coal customers: Japan, Korea, Taiwan and the EU.
    There wouldn't be a large short-term impact on those countries with large domestic supplies: China, India, the USA and Indonesia. …

    [The] loss of the world's largest exporter would create substantial uncertainty about the long-term security of supply in the coal trade.
    (p 89)

    In the longer run, as coal becomes less reliable and more expensive, cleaner choices will become more economically attractive.
    (p 90)

    If CCS and other advances one day enable it to contribute on a large scale without doing environmental damage, well and good.
    The coal [will still be there.]
    (p 92)

  • The Greenhouse Mafia, Four Corners, ABC Television, 13 February 2006.

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