Archive for December, 2018

Credible plan needs truth, not spin

I had a personal interest in the past week’s “schools’ strike” to demand more action on climate change: two of my grandchildren were among the thousands of kids who crowded in to Sydney’s Martin Place.

Happenings like this inevitably polarize opinion. Perhaps it is not surprising our Prime Minister and Resources Minister Matt Canavan were on the deploring side, but perhaps also they might have fared better in public opinion if their reaction had not been guided by their knees and their tone had been far less patronizing towards our young citizens.

Bombarded as they are by media material on climate change, is it surprizing that kids of 12 and 15 are concerned about this issue? Do they have a right to express their concern loudly and as effectively as they can? Of course they do (and some of their banners were expressive, including “I’ve seen smarter cabinets at Ikea,” which would have resonated with more than a few of their elders.)

What was missing on the streets (and in ensuing media comment) was any appreciation of the complexity, just in our own national case, never mind the global scene (which will dictate climate outcomes), of pursuing radical paths towards lowering carbon emissions without undermining the economy.

As it happened, the “schools’ strike” coincided with the publication of a commentary by one of the best thinkers about energy management on the planet, Oxford University’s Dieter Helm. You can find it on the London Financial Times website. Its punchline is “a credible climate action plan needs the truth, not spin, about costs.”

Helm, who recently undertook a Finkel-like task for the British government, makes the point that, since the 1990s – when climate change started gaining traction as an issue and well before the protesting children of the past week were born – “lots of money has been spent, vested interests have profited, but we remain well on course for exceeding two degrees warming.”

It is time for a rethink, he declares (and isn’t that, in essence, the point our kids were seeking to make at their rallies?).

“The claim that global decarbonization can be done at little or no cost is nonsense. On the contrary, switching from an overwhelmingly carbon to a non-carbon-based economy in just two or three decades is really expensive.”

Helm points to “staggering” expense imposed to date – such as the 25 billions euros a year Germans are now bearing as a result of the Energiewende or the 20 per cent premium loaded on to British household power bills – and also to the fact that voters don’t like this cost (a significant political issue here) despite climate concerns, something being demonstrated currently on the streets of France by often-violent protests over the rising cost of diesel (not least because of a carbon tax), which makes great TV news-time “copy” in Australia without any reference to the abatement aspect.

A credible climate action plan, argues Helm, needs to recognize that top-down approaches (like the Paris agreement) aren’t working. Most of all, he says, such a plan needs to make sure that “the very limited amount of money current customers and voters are actually prepared to spend is spent wisely.”

(One of the things that really struck me about the recent International Energy Agency world outlook publication was the agency’s insouciant references to more than $US60 trillion in capex needing to be spent between now and 2040 on climate mitigation efforts.)

In Helm’s book, none of the existing renewable technologies are going to do the required mitigation job. He wants to see a much larger expense on research and development targeting the longer term.

Taking the Helm approach here could, for example, mean a significant focus on pursuing small modular nuclear reactors and a renewed focus on carbon capture technology (two steps currently on the Canadian agenda, to cite a similar economy).

As it also happens, the Energy Policy Institute of Australia is releasing a new commentary on Monday urging that this country has much to gain by joining the international nuclear innovation effort and “pursuing industrial-scale, fit-for-purpose, low carbon energy solutions.”

There’s a line in the EPIA paper that I would like to have seen on placards at the “schools’ strike” rallies around the country: “The climate doesn’t mind how you clean up energy systems so long as you do.”  In other words, that technology neutrality should be the over-arching principle of energy policy – something that, despite some of the political rhetoric, it certainly isn’t in Australia.

EPIA points out that, apart from renewable energy and nuclear power, there are new and more efficient processes and systems for reduction of consumption, energy storage, carbon capture, use and storage, hydrogen, bio-engineering and more besides. And, the institute says, there is “unrealized scope” – now, that’s an understatement – for collaboration among hitherto competing technologies and industry sub-sectors.

A start here could be the Morrison government adding Australia to the 15 countries signed up for the “NICE Future Initiative” – the acronym standing for “nuclear innovation clean energy.” Which, of course, would require abandonment of the legislative ban on nuclear energy in Australia, a relic of another kneejerk action that is long past its use-by date.

Part of the EPIA commentary, written by its executive director, Robert Pritchard, just returned from a conference in Tokyo ahead of the 2019 G20 meeting to be held in Japan, relates squarely to what I see as the trap being dug for us by the policies Labor is pursuing (and, on present indications, has a very high chance of implementing as the next federal government).

Referring to renewable energy as the fastest-growing form of low-carbon power supply, Pritchard writes: “(our existing) power systems were never designed for renewable energy; intermittency poses a challenge to power systems that is growing faster than the share of renewables.” He notes that massively increased deployment of wind and solar power has enabled their direct costs to fall substantially, “reinforcing the hope of advocates that power systems can eventually run on 100 per cent renewables.” And he adds: “If only it were that straightforward. Apart from being weather-dependent, the level of VRE that can be absorbed within a particular power system depends on the availability of other resources, storage solutions, grid interconnections and other system characteristics. As a result, VRE tends to increase total system costs.”

This is the point that has passed by our kids with their banners – quite understandably because 99 per cent of the media they follow ignores or dismisses the problem while it certainly doesn’t figure in schoolroom discussions about the wonders of wind and solar – and, so far as I can see, also the Labor party (not least because of its need to out-green the Greens in the forthcoming federal election and in State elections). Lamentably, it has mostly also passed by our mainstream media and, as a result, the voting public.

All of which brings me back (not for the first time nor the last) to sage advice to the body politic provided by royal commissioner Kevin Scarce: “In developing Australia’s future electricity system there is a need to analyse the elements and operation of that system as a whole and not any single element in isolation. (There is a need for) the development of a comprehensive national energy policy that enables all technologies, including nuclear, to contribute to a reliable, low-carbon electricity network at the lowest possible system cost.”

That was said in mid-2016 and still we seem incapable of taking it up at a national policy level. In my view, we owe it to our kids to do so because, if we don’t, by 2040 they will be in the front line of footing the cost (including damage to the economy).

Finally, there is a line in a newspaper op-ed this weekend written by Jennifer Westacott, the Business Council CEO: “Bad policy created this mess and ill-conceived and rushed policy won’t solve it.”  That could go on rally banners or on walls in our halls of political power right under the one that says: “The economy, stupid.”