The Australian Economy vs the Survival of Nations

The Pacific Islands Forum took place last week in Tuvalu with 18 countries coming together to discuss tackling the climate emergency. After hours of discussion and work on a joint statement that would reiterate commitments to the Paris Agreement and move away from fossil fuels, a limp, vaguely worded communique was released and it was clear to see who was dragging their heels.

 

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Scott Morrison with a number of Pacific Island leaders

 

Countries and regions are already being dramatically affected by climate change. Australia has been dealing with long periods of drought that is putting huge amounts of stress on water supplies. Pacific islands are slowly being submerged by rising sea levels that will likely soon see them wiped off the face of the planet. For them, tackling climate change is of paramount importance for their very survival.

Despite the very clear effects of climate change affecting Pacific nations, the largest of the group still refuses to acknowledge the existence of the climate emergency and the need to tackle it. Under the leadership of Scott Morrison, the man famous for bringing a lump of coal into parliament to ask why left-leaning parties were so afraid of it, Australia has taken very little action to move away from fossil fuels and decarbonise their economy. They just can’t seem to give up on that little black rock.

Toning Down The Language

The communique that was announced at the end of the talks went no further than any announcement or agreement had since the Paris Agreement. Many nations hoped a stronger commitment to the 1.5℃ limit of warming could be reached as well as a commitment to implement policies that would help achieve this. However, Australia backed out of this, instead, arguing that they’re on course to reach the low targets set under the Paris Agreement allow for an opt-out clause on any policy agreed during the Pacific Islands Forum.

There was even a qualification added to the final communique saying that not all countries (quite clearly meaning Australia) supported the strong statement made by the smaller Pacific Island states. The earlier statement endorsed by the smaller nations called for an immediate ban on new coal-fired power plants and coal mines to limit climate change – something Australia has shown to be quite clearly against the with the approval of the controversial Adani Coal Mine.

The Australian Love of Coal

During discussions, Tuvaluan Prime Minister Enele Sopoaga argued with Scott Morrison on the lack of action on the climate emergency saying “you are concerned about saving your economy in Australia… I am concerned about saving my people in Tuvalu.” Arguments like this that regularly come from more developed, typically conservative and nationalistic states effectively summarises the difference in priorities between developed and less developed countries.

 

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Sea level rise is an imminent threat for Pacific Island nations

 

Coal has always been an important driver in the Australian economy. The vast reserves of coal buried in the Australian subcontinent have ensured jobs and energy independence for many years and they’re not ready to give that up for the renewable future that will provide Australia with jobs and energy independence at a cheaper price. The current Conservative Government hasn’t quite realised that yet though…

It’s not just the government that thinks coal is tightly coupled with economic growth. On a number of occasions, I have been asked by friends and others what should be done with the coal reserves that exist and where the lost income they generate will come from.

Well firstly, for the sake of the environment, that coal needs to stay in the ground. If we’re going to limit warming to just 1.5℃ then the coal reserves Australia has must stay in the ground. Yes, it’s there, but the impacts of mining and burning it for power will have dangerous consequences for future generations and bear an even greater future cost than what would be gained from mining it.

 

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The controversial Adani Coal Mine

 

Renewable energy is the energy of the future. Even if fossil fuels had no impact on the planet, they’re a finite source of energy and something that cannot be relied upon to power us into the future. However, there will always be wind and sun, and Australia is in a prime geographic location to expand the renewable sector.

And besides, is coal really still that cheap?

The True Cost of Coal

Not only is the use of coal for energy keeping us tied to the technology of the past and having a devastating effect on the planet, but it’s very quickly becoming a costly energy resource.

As shown in the 2018 research below by Lazard, coal is becoming less competitive compared to renewable energy sources, particularly when renewable energy is generated on a large scale.

 

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Utility-scale solar and wind is on average much cheaper than fossil fuel sources

 

 

 

 

 

 

 

 

 

What keeps coal and other fossil fuels competitive are government subsidies. Globally, $5.2 trillion is spent each year keeping fossil fuels competitive. In the US, $649 billion is spent on fossil fuel subsidies each year! In comparison, Australia only spends $29 billion on fossil fuel subsidies but that’s dramatically more than renewable energy is getting.

A recent report by the IMF found that fossil fuel subsidies were actually a drag on the global economy and removing them would have a significant economic benefit for governments all over the world.

I’m of course not advocating that all fossil fuel subsidies are immediately removed but our taxes are helping prop up the wrong industry. In comparison to the billions that the fossil fuel industry receives in order to stay cost-effective and competitive, renewable energy receives only a fraction, yet they vary little in cost.

Subsidies maintain our addiction to fossil fuels. In coming years, more and more will be spent in order to maintain their cost-effectiveness even as the need to decouple from a carbonised economy becomes increasingly urgent. Fossil fuels are the technology of the past and the longer we hold on to them the greater the damage on the environment and strain on national economies. Embrace the renewable technology of tomorrow Scott Morrison, it’s not that scary!

 

 

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