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Aug 6, 2009

Rudd's dilemma at PIF

Pacific leaders are meeting in Cairns today for the Pacific Island Forum. In recent years the agenda has been dominated by issues of regional stability including the intervention in the

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Pacific leaders are meeting in Cairns today for the Pacific Island Forum. In recent years the agenda has been dominated by issues of regional stability including the intervention in the Solomons and more recently the troubling political events in Fiji. But with the forum happening in Australia for the first time in over a decade, and climate change at the top of the international political agenda, other issues are set to dominate.

Pacific Islands are literally on the front line of climate change. The Prime Minister of Tuvalu has raised the prospect of having to relocate their entire country because of rising sea levels and other climate impacts. The Association of Small Island States (AOSIS), which includes the Pacific Islands, has become the moral conscience of the international climate negotiations, set to conclude in Copenhagen in December. Their calls for developed countries such as Australia to cut emissions by over 40% within the next decade put Australia’s low and highly conditional target (5-25%) into stark relief.

Australia too is vulnerable to climate change, but it is expected that Kevin Rudd will carefully manage relations during the Forum to keep any strong climate statements out of the Forum Communiqué. There will be some heavy diplomatic manoeuvrings going on behind the scenes to keep climate of the agenda and real emission cuts off the table.

Australia’s growing coal exports coupled with low emissions targets and the relentless push for loopholes and exemptions in the international climate negotiations put the Rudd Government’s climate position on a collision course with the Pacific. While our neighbours are fighting for their survival, Australia is rapidly doubling our coal export capacity and entrenching our position as the world’s biggest coal pusher.

Despite all of the wrangling and economic fear mongering over the Carbon Pollution Reduction Scheme, any reductions in greenhouse pollution through even a 25% target (the very top end of the Government’s proposal) will be undone many times over by the increased coal exports from NSW and Queensland.

Climate change remains confusing so long as the debate continues to be fixed on numbers, statistics and complex economic instruments. But when you come back to the bottom line, it’s really quite simple. We need to stop putting more CO2 into the atmosphere. To do this we need to stop digging up and burning fossil fuels – and coal is the biggest problem. If we are burning more coal (regardless of where it is burnt), we are making climate change worse.

Having grown up in Central Queensland, I understand the role that coal plays in Queensland and indeed in the national psyche. My father spent his entire working life in the coal industry and as a graduate engineer I spent my first few years out of university building equipment for coal mines. But time moves on. Computers replaced the abacus, mobile phones replaced carrier pidgeons, and renewable energy will replace coal.

It will take a serious effort to make the transition from coal to clean energy in a way that supports coal dependent communities and workers, but the economic impact of moving away from coal will be far less than most people imagine. In Queensland, tourism employs far more people than the entire mining sector and will be hard hit by climate change. But perhaps the biggest surprise is the royalty payments.

This year, the Queensland Government received around $1.5 billion in royalty payments from the coal industry. In the same breath, $1.3 billion of public money was spent on coal infrastructure – 90% of the total royalty payments. So much for private enterprise. And if you factor in the costs of the negative health and environmental impacts of coal mining the net economic contribution of the industry starts to look even less appealing.

We need to choose whether we want to continue to be a quarry economy, or if we are ready to move into the twenty first century and embrace the renewable energy revolution that is slowly but surely building momentum. At the moment, Rudd and Bligh are still backing the coal industry, with only a token hedge on renewables.

Climate politics in Australia is a struggle over vested interests. For their part, Pacific countries do not have a domestic fossil fuel lobby running full-page ads in national newspapers threatening job losses if we take serious action on climate change. They don’t have a greenhouse mafia whose web of influence entraps politicians at all levels of Government. It means that they can speak the truth about climate change, and call for what is actually required to protect both their future and ours.

In the absence of real honesty or leadership from our own political leaders, the Pacific are our moral conscience on climate change.

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14 comments

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14 thoughts on “Rudd’s dilemma at PIF

  1. Greg Atkinson

    Peter yes nations could still import coal from other countries but this does not mean Australia should not look at winding back the use of coal here and abroad. I am not a big believer in global warming but I also fail to see the logic in using coal rather than investing in nuclear power. Of course there will be situations where coal is the most viable source of energy especially for poor nations, but Australia is not one of them.

  2. connie

    Coal has definitely had its day and we now need to work towards making it a cottage industry, subsidise renewable energy with billions of dollars and get this economy up and running. Make Australia a world leader in the clean energy revolution.
    The Great Barrier Reef is worth $51billion to the Australian economy and the whole of the mining industry does not even come close to this.
    Coal is killing the Reef.

  3. kdkd

    Peter,

    I prefer to see it as structural intertia. If we weren’t so subject to the toxic lobbying of the coal lobby over the last 30 years, australian and global policy wouldn’t be so depressing and in favour of the status quo.

  4. Peter Logue

    Kdkd,
    If there was a clean viable, economical, substitute for coal – particularly for the 1.6 billion people in the world who have little or no electricity – don’t you think the energy entrepreneurs would be rushing to embrace it? I think it’s pretty naff for comfortable Australians to be suggesting that people in developed countries should sacrifice what chance they have to improve their standards of living by seeking energy solutions that they can’t afford and/or are not yet ready. They will continue to source their energy from wherever they can, and at the cheapest price, and no, they won’t worry too much about climate change because they’re more worried about feeding their children. Which is why the Green movement should be embracing, rather than scorning, carbon capture and storage technology for all fossil fuels and industrial processes using fossil fuels.

    As for the shut up comment – it wasn’t aimed at you; read the posts above: ” For gooness sake shut up and and get whatever renewable energy presently works up and running NOW – after all the matter is urgent.” In this forum people should use their full name, unless they have something to hide.

  5. kdkd

    Peter:

    Odd comment. I didn’t see any mention of “shut up” before you mentioned it. So I was just responding to that specific mention.

    In the remainder of your argument you make a good argument for strong binding global targets. Remember the most efficient way to reduce co2 emissions from fossil fuel use is not to dig it up and burn it in the first place. My name is quite easy to find by the way.

  6. Peter Logue

    So I should shut up because I’m “ignorant” kdkd? (Why won’t you post your name?) CRikey is attracting some charming people. Ok, let me explain slowly. Coal is mined and exported by close to 60 countries. Like the grain trade they compete for whatever market is available. If there’s a crop failure in,say, Canada, and Australian wheat farmers have a bumber crop, they sell more rather than store it. If Australia halts all coal mining, how does that also reduce global emissions? Would not other countries – like Indonesia which is putting huge money into coal infrastructure – just dig up more, export more, allowing the world to burn more and fill the emissions gap.

    Or am I just too ignorant to understand your logic?

  7. kdkd

    Australia has 8.6% of the world’s proven coal reserves (http://en.wikipedia.org/wiki/Coal). Therefore, in an idealised situation, if Australia shut down the coal industry today, it would cause a proportional reduction of 8.6% of the world’s coal-related CO2 emissions.

    You can do the maths from there. Telling people to “shut up” is also a strong signal that you consider them ignorant, and you wish to signal their ignorance to others.

    In reality the correct solution to the energy problem is to seek an optimum, accellerated transition from carbon intensive energy (fossilised solar energy) to non-carbon based energy. That is – geologically based non-bio energy (hot rocks, tidal, maybe nuclear), and solar based energy like sun (PV, concentrating solar, wind, wave and existing hydroelectric).

    The longer the politicians delay, the faster the accelleration will have to be in the end to ensure success. We’ve already had 30 years of policy vaccuum — already a fair debt. Let’s hope the tide is turning.

  8. Peter Logue

    Telling people to “shut up” is an admission of defeat in any argument. I wrote about the simple fact that stopping coal exports from Australia will not stop the burning of the same amount of coal. We’re small-fry in the scale of coal mined and burned around the world. Renewables are not ready to supply baseload power on the scale required and won’t be for considerable time.

  9. simmobc

    I think you are wrong John, what is the tangible evidence you have on the planet telling us to change? hotter weather, no rain, higher sea levels? I have no problem with the environmental debate, I think it is long overdue, however it needs to be kept into perspective – remember, the planet was covered in ice less than 10,000 years ago and I highly doubt that this was due to human abuse!

    I agree with your view on renewable energy, lets just get it done!!!

  10. D. John Hunwick

    People like Peter Logue don’t seem to understand plain english. It is the feedback from the planet tha tis telling us that CO2 emissions must stop – if not now then by 2020. The planet doesn’t care whose coal is not burnt so long as there is less in the atmosphere. Carbon capture and storage is so far away from being proven let alone costed that it just confirms that renewable energy sources are here and now and effective. As for nuclear power it too is costly and will continue in existing plants BUT one won’t be built in Australia soon enough to have any effect. Even when buiult it will take something like 7 years of operation before it pays back the amlount of CO2 put into the air for its construction – let alone replace any coal-fired stations that need to be taken off line. Whether CCS and nuclear power ever comes about hasn’t Peter noticed that people around the world are already dying and losng their livelihoods through climate change even our Pacific neighbours? For gooness sake shut up and and get whatever renewable energy presently works up and running NOW – after all the matter is urgent.

  11. kris karloph

    “Climate politics in Australia is a struggle over vested interests. For their part, Pacific countries do not have a domestic fossil fuel lobby running full-page ads in national newspapers threatening job losses if we take serious action on climate change. They don’t have a greenhouse mafia whose web of influence entraps politicians at all levels of Government. It means that they can speak the truth about climate change, and call for what is actually required to protect both their future and ours.”

    Perhaps there isn’t a strong fossil fuel lobby, but there are certainly other vested interests at work driving Pacific Islands’ climate change policy, check out the debacle within the PNG government over irregular sale of forest carbon credits.

    http://www.redd-monitor.org/category/countries/papua-new-guinea/

  12. Bradley Smith

    Peter, thanks for the interesting and useful numbers, but you’re ignoring the main issue; if no one takes the lead on reducing fossil fuel production and consumption, then the losses of food, water, security and entire nations and cultures will be impossible to ameliorate, unlike the jobs in Central Queensland for which we can and must be planning a careful transition.

    And thanks again for reminding us that the future of the entire coal industy is hanging on the promise of CCS. As you know well, very few people are willing to believe that such a feat as storing billions of tonnes of CO2 under the ground every year will be cheap enough, safe enough, or ready in time to be a significant part of avoiding dangerous climate change.

    For now, the Australian Coal Industry are profiting off the destruction of the planet. Simple.

    Oh and try telling Anna Bligh that Queenslanders have no money at risk in the coal industry – I take it that her fire sale isn’t without its financial reasons. And despite your assurances there is $1.3 billion in the queensland budget for coal infrastructure. Whether or not you claim that this is a safe investment, it is still public capital, and it should still be going to where it’s needed – averting a catastrophe, not digging us deeper.

    Apologies if my response wasn’t as articulate as yours, after all, I’m not being paid to try to convince people of these things, this is just my honest two cents.

  13. Peter Logue

    Some other points for correction in your report have been passed on to me by the Queensland Resources Council.

    Direct employment by the Queensland coal industry is 17,626 (ABS May 2009), with the vast majority employed in central Queensland. The mining industry traditionally pays its employees around 50% more than the state’s average wage.

    The capital-intensive nature of the industry means that directly and indirectly, coal exports generate 56% of the Mackay region’s economic activity and 39% in the Fitzroy (Rockhampton/Gladstone) region. This translates into one in every four jobs in central Queensland.

    Statewide, the coal industry is the lion’s share of the 20% of State Gross Product derived from minerals and energy production.

    The value of Queensland coal production in 2008-09 was almost $40 billion, with the value of metallurgical coal used in steelmaking almost $30 billion.

    In 2008-09, coal royalties were the single biggest domestic revenue line in the state budget at a record $3.2 billion.

    In 2009-10, the industry is forecast to return to its long-term trend growth and return in the order of $1.5 billion to taxpayers, the second highest on record.

    This amount is free and clear of coal industry infrastructure costs, which are met by the coal industry.

    Queensland Government-owned port and rail providers borrow money for expansions through Queensland Treasury with full underwriting from the coal companies they are servicing, usually in the form of ‘take or pay’ contracts plus a guaranteed annual rate of return on the investment, determined by the Queensland Competition Authority.

    Queensland taxpayers have no money at risk in coal industry infrastructure and haven’t since the industry started in the late 1950s.

  14. Peter Logue

    John, some interesting and useful comments here. But you’re ignoring the main issue; even if Australia stopped exporting coal tomorrow this would not contribute in any way to global emissions reductions, for the simple reason that countries that want coal for reliable and cheap energy production will just buy it from one of the other 60 coal exporting nations.

    To ignore this fact – as many well-meaning people in this debate to – is to ignore reality. And that’s why, despite people’s reservations about preserving the coal industry which supplies 80% of our electricty, green group should be pushing even harder for faster development of carbon capture and storage, or reversing their views about nuclear energy.

    There are no other viable choices at the moment if we want to maintain the energy security that underpins Australia’s prospertiy. (of course, we could always accept that our standard of living should be allowed to slip significantly in order to benefit the climate, but I’m not sure any political party would get elected on that platform…anywhere!)

    According to the International Energy Agency (IEA), global coal consumption since 2000 has grown faster than any other fuel, despite higher prices. Coal demand is projected to grow by 2% per year out to 2030, faster than total energy demand. Non-OECD countries account for 97% of the increase in global coal demand, with China alone accounting for two-thirds of the increase and India for a further 19%.

    To meet growing demand, coal production is projected to rise by almost 60% between 2006 and 2030. Around 90% of this increased production will come from non-OECD countries. China – with massive coal reserves – will almost double its output, while India’s production will more than double. Russian production will jump by nearly 75%, overtaking that of OECD Europe.

    Explain to the people in the coal mining communities that you write about from personal experience why it is a sensible and reasonable course to shut down their industry and transfer their economic well-being to Colombia or Indonesia or South Africa, where there will be NO price on emissions, while Australian companies are being charged a billion dollars a year as an incentive to cut emissions.

    And then explain why there is such trenchant opposition to a technology that will be able to reduce CO2 emissions from coal fired electricity by up to 90% and which will be commercially available by 2015-17?
    I work for the Australian Coal Association and I’m not a climate skeptic.

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