Bob Hawke, the environmental PM, bequeathed a huge ‘what if’ on climate change


Marc Hudson, University of Manchester

Since the news broke of his passing, Bob Hawke has been feted as the “environmental prime minister”. From saving the Franklin River, to protecting Antarctica from mining, conservationists have praised his environmental legacy in the same way economists have lauded his financial reforms.

Hawke was in the Lodge during the crucial period when Australia first became aware of – and tried to grapple with – the issue of climate change. And the trajectory of his leadership, not to mention the manner and timing of his political demise, leaves behind a huge question of what might have been.




Read more:
Vale Bob Hawke, a giant of Australian political and industrial history


Hawke had been in the public eye since becoming head of the ACTU (a far more consequential body back then) in the late 1960s.

Famously, he took the leadership of the Australian Labor Party from Bill Hayden on the morning that then Prime Minister Malcolm Fraser called the 1983 election. That election had a major environmental issue: the proposed damming of the Franklin River in Tasmania.

Labor promised to halt the project if elected, and it duly did so, winning the court case later that year. But elsewhere Labor remained reluctant to use its federal environmental powers in a wholesale way. Although there was a National Conservation Strategy, Hawke and his senior ministers remained focused on transforming Australia’s economy, bringing down tariff barriers, floating the dollar, and much else.

There were specific battles over the Wet Tropics, uranium mining, and other “green” issues. But something was coming down the track that would ultimately outstrip them all.

Climate conundrum

Barry Jones, Hawke’s science minister from 1983 to 1990, tried in vain to get ministers interested in climate change. Jones mournfully noted in 2008 that he had raised the alarm in 1984, but his cabinet colleagues did not listen:

The response from my political colleagues in Canberra was distinctly underwhelming. I think some of them were persuaded by (industry) lobbyists to say sooner or later a technological fix will come up.

Political journalist Niki Savva’s memoir, So Greek (p.136), gives a clue as to the possible reasons behind this:

Bob Hawke couldn’t stand Barry. A few journos, included myself, were talking to Hawke at the back of his VIP aircraft once about his ministers, when one of my colleagues said to him: “Take Barry Jones…” Hawke interrupted and said testily, “No, you take him.”

It would take a different, more politically cunning minister in Hawke’s next cabinet (1987-90) to bend his colleagues’ ears towards the climate question. The incoming environment minister, Graham Richardson, realised the electoral importance of green issues – whether the ozone hole, deforestation or sewage – in helping Labor differentiate itself from the Liberals. Meanwhile, Hawke had other advisors who were also fighting the green fight from within, and noisy large environment groups without.

After the Commission for the Future (a Barry Jones initiative) had launched the Greenhouse Project in 1987, Hawke began to give speeches about the importance of action against the emerging threat of global warming.

In June 1989, Richardson, having proposed a greenhouse emissions target only to see the idea nixed in cabinet by treasurer Paul Keating, noted:

The environment is galloping up the hit parade, and will be top of the pops pretty soon. It’s come from nowhere as an election issue to be Number Two to interest rates.

Hawke’s 1989 statement on the environment (jokingly called the World’s Greatest Environmental Statement) contained little detail on the idea of emissions reductions. Ironically enough, the Liberals went to the March 1990 election with a more ambitious emissions target than Labor.

After winning the 1990 election with Green preferences, the Hawke government established the “Ecologically Sustainable Development” policy process. It featured nine working groups in areas including agriculture, tourism, energy use, and so on, with an overarching “greenhouse” group added later.

However, by 1991, the climate issue was slipping down the charts once more, eclipsed by concerns such as the first Gulf War and the “recession we had to have”. What’s more, Hawke’s relationship with Keating had broken down after he reneged on his promise to stand aside after a third term, and the airwaves were now dominated by political intrigue.

Rising resistance

Meanwhile, the business community was growing more organised in its resistance to environmental regulation. After Hawke vetoed a uranium mine in Kakadu National Park in 1991, industry formed the Australian Industry Greenhouse Network (see Guy Pearse’s High and Dry for the full story) to make sure climate policy didn’t follow the same path.

Hawke stuck to his guns. In October 1991, at a Commonwealth Heads of Government meeting in Harare, Zimbabwe, he pledged to go to the following year’s Earth Summit in Rio and apply maximum pressure for global action.

Hawke’s days as prime minister, however, were numbered. In December 1991, after a lacklustre parliamentary response to John Hewson’s “Fightback!” policy launch, Keating’s forces moved in for the kill. Hawke’s time as leader had begun and ended with leadership coups – a tactic that has become an even more potent threat in recent years as the climate wars have heated up.




Read more:
Carbon coups: from Hawke to Abbott, climate policy is never far away when leaders come a cropper


Keating didn’t go to Rio in 1992, making Australia the only OECD country that didn’t have its top political leader present at the landmark summit.

Australia produced an eye-wateringly weak National Greenhouse Response Strategy that was not worth the paper it was written on, and was within two years challenged by greens seeking a carbon levy.

There was an effort to get more meaningful domestic policy ahead of the first round of UN climate talks in 1995. But this was defeated by a beefed-up constellation of energy companies, academics and think-tankers, with newspapers and unions helping. Since then, Australian climate policy has been, to put it mildly, inadequate.

Could it have been different?

Hawke had a penchant for the grand gesture – from “no Australian child will be living in poverty” to “Australian servicemen not dying overseas” – and this naturally prompts us to ask “what if”?

What if he had been at Rio? What if Australia had invested properly in energy efficiency, solar and other renewables? Of course it’s entirely conceivable that the business community’s response would simply have been even more ferocious, and the environmental movement’s early-1990s malaise all the more pronounced. But it’s not impossible to imagine that Hawke’s forceful determination would have carried the day, as it did on so many others.

There’s been a lot of carbon dioxide pumped into the atmosphere since Hawke was prime minister, and plenty of hot air pumped into the climate policy debate. But although Hawke fell agonisingly short of finding out who would prevail in 2019, the next prime minister’s climate task is clearer than his, and far more difficult: preparing Australians for inevitable consequences of past policy failures.The Conversation

Marc Hudson, Researcher, University of Manchester, University of Manchester

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Advertisements

View from The Hill: Joyce could be facing waves at a judicial inquiry after the election


Michelle Grattan, University of Canberra

It’s hard to believe Barnaby Joyce really wants to lead the Nationals again. Of course everyone knows he does, desperately, but his unhinged ABC interview with Patricia Karvelas on Monday showed a breathtaking absence of political judgement or personal restraint.

Joyce went on the program to defend his conduct in the 2017 A$79 million water buyback from two Queensland properties owned by Eastern Australia Agriculture (EAA).

Regardless of how his approval of this deal will ultimately be judged, his shouting, interruptions and at times absurd language drowned out any chance of his getting his points across.

Joyce loyalists will see it as Barnaby-being-Barnaby. But it was further reason for Nationals to despair about the parlous state of their party, as they watch an ineffective leader and an out-of-control aspirant.

The Joyce interview made it harder for the government to manage this big distraction in a messy second campaign week.

The controversy over the water purchase is based on an old story; the election has enabled it to be resurrected for a powerful fresh spin around the political circuit.

Water expert Quentin Grafton, professor of economics at the Crawford School at the Australian National University, lays out the issues.

Grafton estimates the Commonwealth paid about $40 million too much for this water. He identifies three areas of concern: the government’s failure to get value for money (remembering this was floodwater, which is unreliable); the lack of transparency in the deal, and the nature of the process – a negotiated sale rather than an open tender.

Much has been made of EAA being a subsidiary of Eastern Australian Irrigation (EAI), which is based in the Cayman Islands, a tax haven. This does, however, seem an irrelevance in the context of the value for money issue.

Also, it is one thing to say tax avoidance structures should be cracked down on, quite another to suggest the government should decline to deal with a company with a structure that accords with the law.

There has also been talk about Energy Minister Angus Taylor. As a business consultant Taylor helped set up the two companies and was a director of each.

But according to Taylor’s office he ended all links before entering parliament, never had a direct or indirect financial interest in EAA or any associated company, had no knowledge of the water buyback until after it happened, and received no benefit from this transaction.

So the questions in this affair centre on the conduct of the Agriculture Department and its then minister.

Grafton says: “Either the public servants were incompetent in relation to understanding value for money – or there’s an alternative explanation.”

The department is sensitive, taking the unusual step during Easter (and in the “caretaker” period) of issuing a statement defending its actions. It said it had done “due diligence”. The water purchase had been consistent with Commonwealth Procurement Rules “and paid at a fair market rate, as informed by independent market valuation,” the statement said.




Read more:
Australia’s ‘watergate’: here’s what taxpayers need to know about water buybacks


Joyce is known in general to have been a meddling minister.

In this case, he insists he followed departmental advice in approving the purchase, and had been at arms length from the deal.

“My role was never to actually select a purchaser or to determine a price,” he told a Tuesday news conference. But he approved the authority to negotiate without tender, and imposed conditions, including having the department report back to him before finalising the deal.

The current Minister for Agriculture and Water Resources, David Littleproud, tried to stem the damage on Tuesday by asking the Auditor-General to inquire into the matter. Littleproud added a political twist, requesting the audit to look back as far as 2008, to encompass Labor’s period.

But this wasn’t going to satisfy Labor in an election campaign.

The opposition had demanded documents by the end of Tuesday; predictably, it didn’t get what it wanted.

Bill Shorten had already flagged the need for a judicial inquiry.

Late Tuesday, environment spokesman Tony Burke accused Scott Morrison of “trying to cover up his government’s incompetence, chaos and potential misconduct”.

“It is now clear that there needs to be an independent inquiry into the Eastern Australia Agriculture scandal, with coercive powers so that Australians can get the truth,” Burke said. (That inquiry, however, wouldn’t be probing Labor deals.)

If Labor wins on May 18, yet again we will see a government launch an investigation into the conduct of its predecessor. If this comes to pass, Joyce will find himself in the witness box, a prospect he seems to relish – at least now.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Australia’s ‘watergate’: here’s what taxpayers need to know about water buybacks



File 20190423 15224 l8c00.jpg?ixlib=rb 1.1
The federal government committed to reducing water extraction from the Murray-Darling Basin.
Shutterstock

Lin Crase, University of South Australia

In 2017, the then agriculture minister, Barnaby Joyce, signed off on an A$80 million purchase of a water entitlement from a company called Eastern Australia Agriculture.

The problem is that Energy Minister Angus Taylor used to be a director of Eastern Australia Agriculture – though he didn’t have a financial interest – and the company is a Liberal party donor. What’s more, the value of the water purchased for A$80 million is under question.

Now, as the election looms, this issue has resurfaced. But why should taxpayers be concerned?




Read more:
Is the Murray-Darling Basin Plan broken?


Water buybacks using an open tender were halted by the current government in 2015, even though this is the most cost-effective way to set aside water for the environment. Instead, the government pronounced that subsidies for irrigators were a better deal.

Until 2015, the government bought back most water using an open tender process, before it was replaced by a subsidy scheme for irrigation and occasional closed tenders.

The problem with the closed tender process is that it tends to lack transparency, which raises questions about how effectively the government is spending public money. And it’s hard to prove closed tenders deliver the most cost effective outcome.

The Murray-Darling Basin is a very productive agricultural zone and its rivers have been used to boost agricultural outputs through irrigation.

State governments spent much of the 20th century allocating this water to agricultural users. By the 1990s it was clear too much water was being extracted. This resulted in both harm to the river environment and potential reduced reliability for those with existing water rights.

Various attempts to rein in extractions were made around this time, but ultimately the Murray-Darling Basin Plan was adopted to deal with the problem.

In agreeing on the plan, the federal government committed to spending A$13 billion to reduce the amount of water being extracted from the Murray-Darling Basin. To accomplish this the government has two basic strategies.

One involves buying up existing rights for water use. The other hinges on using subsidies so farmers use less water when irrigating.

Reducing water extraction from the basin

The second approach of using subsidies is generally more politically appealing. This is because few farmers ever object to receiving a subsidy and the public has an affinity with the idea of “saving” water.




Read more:
Damning royal commission report leaves no doubt that we all lose if the Murray-Darling Basin Plan fails


The problem, however, is that subsidies are a more costly way of returning water to the river system than simply buying back existing water rights. And so-called water savings are hard to measure how much water savings are a result of subsidies or some other factor.

This is why some analysts even claim subsidies are reducing the level of water available for the environment.

Buying back water rights is generally more cost-effective than providing subsidies. But a clear and transparant process still matters because water rights are not the same for everyone and it’s a complex process to determine their overall value.

Allocations and entitlements

First, most water users hold a legal right, known as an entitlement. Water entitlements represent the long-term amount of water that can be taken and used – subject to rain, of course.

Second, water allocations represent the amount of water currently available against a given entitlement – this is the water that is available now.

If a farmer owns an entitlement in the River Murray, chances are the annual allocation will be determined by how much water has flowed into upstream storages like Hume Dam, Dartmouth Dam or Lake Eildon.

Even then the allocation will vary, depending on which state issued the original entitlement. For instance, New South Wales water is generally allocated more aggressively. This means NSW entitlements tend to be less reliable in dry years than Victorian or South Australian entitlements.

If a farmer owns an entitlement where there are no upstream storages, as is the case with much of the Darling River system, then the allocation will vary depending on how much water is flowing in the river.




Read more:
Discontent with Nationals in regional areas could spell trouble for Coalition at federal election


So what?

All of this means the amount of water that can actually be used for the environment when an entitlement passes to the government will depend heavily on the underlying characteristics of the water right.

Partly for this reason, water buybacks were historically conducted using an open tender process.

This meant the government would announce its willingness to buy water entitlements. Farmers would then notify the government about what entitlements they held and the price they were prepared to take.




Read more:
Investors and speculators aren’t disrupting the water markets


Running an open tender allowed the government to assess the value for money of the different entitlements on offer at the time.

Water buybacks through open tender began seriously in about 2007 to 2008. This meant the price owners were prepared to sell for would be registered, and then the government would determine which offer provided the best value. Around 60% of all water now held for the environment by the Commonwealth was secured through open tenders.

As a general rule, a relatively high-reliability water entitlement was bought for about $2,000 per megalitre and this has become the metric for many in the market. But the current government halted this process in 2015.

Now, the government buys water through direct negotiation with water-entitlement holders.

The government justified ending open-tender buybacks on the basis that the water being secured was causing undue harm to rural and regional communities. And, instead, much more expensive subsidies would supposedly generate a better overall return.

This view is not universally shared. The receipts from openly tendered water entitlements were being used by many farmers to adjust their business, while still staying in the region.

Many rural communities continue to thrive, regardless of the strategy chosen to secure water for the environment. Subsidies also tend to favour particular irrigators rather than the community in general.




Read more:
Droughts, extreme weather and empowered consumers mean tough choices for farmers


Having set aside the cheapest option of open-tender buybacks and declaring support for irrigation subsidies, the problem the government now faces is that it must explain why closed tenders persisted (albeit in isolated cases) and were signed off by Ministers as good value for money.

Closed tenders need not deliver a poor outcome for taxpayers. But it does mean the likelihood of establishing the best value for money is reduced, simply because there are fewer reference points.

And if it’s legitimate to overspend public money on irrigation infrastructure subsidies, the credibility of a supposedly cost-effective closed tender is also brought into question.The Conversation

Lin Crase, Professor of Economics and Head of School, University of South Australia

This article is republished from The Conversation under a Creative Commons license. Read the original article.

View from The Hill: Malcolm Turnbull’s home truths on the NEG help Labor in the climate wars


Michelle Grattan, University of Canberra

An Easter weekend in an election campaign might be a bit of a challenge for a pair of leaders who were atheists. But fortunately for Scott Morrison and Bill Shorten, declared believers, it wasn’t a problem.

Both attended church services during the so-called campaign cease-fire that the main parties had proclaimed for two of the four days.

Morrison on Sunday was pictured in full voice with raised arm at his Horizon Pentacostal church in The Shire, where the media were invited in. On Friday he’d been at a Maronite Catholic service in Sydney.

Sunday morning saw Shorten at an Anglican service in Brisbane, his family including mother-in-law Quentin Bryce, former governor-general.

Neither leader was hiding his light under a bushel.

Church, chocolate and penalty rates

Sunday was an opportunity to wheel out the kids, chasing Easter eggs (Shorten) or on the Rock Star ride at Sydney’s Royal Easter Show (Morrison). This was campaigning when you’re not (exactly) campaigning.

The minor players weren’t into the pretend game. For them, the relative restraint on the part of the majors presented rare opportunity. Usually Centre Alliance senator Rex Patrick would have little chance of being the feature interview on the ABC’s Insiders.

But while Friday and Sunday were lay days for the major parties Saturday was not (and Monday won’t be either).

For Labor, Easter has meshed nicely with one of the key planks of its wages policy – restoration of penalty rate cuts by the Fair Work Commission. Even on Sunday, Shorten pointedly thanked “everyone who’s working this weekend”.

It was the start of Labor’s campaign focus turning from health to wages this week, when it will cast the election as a “referendum on wages”.

Turnbull resurrects the NEG

The weekend standout, however, was the intervention of Malcolm Turnbull, who launched a series of pointed tweets about the National Energy Guarantee (NEG).

Turnbull was set off by a reference from journalist David Speers to “Malcolm Turnbull’s NEG”.

“In fact the NEG had the support of the entire Cabinet, including and especially the current PM and Treasurer. It was approved by the Party Room on several occasions”, the former prime minister tweeted.



“It had the support of the business community and energy sector in a way that no previous energy policy had. However a right wing minority in the Party Room refused to accept the majority position and threatened to cross the floor and defeat their own government”.

“That is the only reason it has been abandoned by the Government. The consequence is no integration of energy and climate policy, uncertainty continues to discourage investment with the consequence, as I have often warned, of both higher emissions and higher electricity prices.”

He wasn’t finished.



“And before anyone suggests the previous tweet is some kind of revelation – all of the economic ministers, including myself, @ScottMorrisonMP, @JoshFrydenberg spent months arguing for the NEG on the basis that it would reduce electricity prices and enable us to lower our emissions.”

And then:

“I see the @australian has already described the tweets above as attacking the Coalition. That’s rubbish. I am simply stating the truth: the NEG was designed & demonstrated to reduce electricity prices. So dumping it means prices will be higher than if it had been retained. QED”

“The @australian claims I ‘dropped the NEG’. False. When it was clear a number of LNP MPs were going to cross the floor the Cabinet resolved to not present the Bill at that time but maintain the policy as @ScottMorrisonMP, @JoshFrydenberg& I confirmed on 20 August.”



(Frydenberg, incidentally, has lost out every which way on the NEG. As energy minister he tried his hardest to get it up, only to see it fall over. Now he is subject to a big campaign against him in Kooyong on climate change, including from high-profile candidates and GetUp.)

Turnbull might justify the intervention as just reminding people of the history. But it is damaging for the government and an Easter gift for Labor – which is under pressure over how much its ambitious emissions reduction policy would cost the economy. It also feeds into Labor’s constant referencing of the coup against Turnbull.

Turnbull’s Easter tweets are a reminder

  • the Coalition sacrificed a coherent policy on energy and climate for a hotchpotch with adverse consequences for prices;

  • it dumped that policy simply because of internal bloodymindedness, and

  • the now-PM and treasurer were backers of the NEG, which had wide support from business.

Shorten has strengthened his commitment on the NEG, indicating on Saturday he’d pursue it in government even without bipartisan support.

“We’ll use some of the Turnbull, Morrison, Frydenberg architecture, and we will work with that structure,” he said.

Given the hole it has left in the government’s energy policy, pressing Morrison on the economic cost of walking away from the NEG is as legitimate as asking Shorten about the economic impact of his policy.




Read more:
VIDEO: Michelle Grattan on the starting line of the 2019 election campaign


The Conversation


Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The government’s electricity shortlist rightly features pumped hydro (and wrongly includes coal)


Mark Diesendorf, UNSW

The federal government this week released a shortlist of 12 project proposals for “delivering reliable and affordable power” to be considered for subsidy under its Underwriting New Generation Investments program.

The shortlist features six renewable electricity pumped hydro projects, five gas projects, and one coal upgrade project, supplemented by A$10 million for a two-year feasibility study for electricity generation in Queensland, possibly including a new coal-fired power station.

The study is unnecessary, because the GenCost 2018 study by CSIRO and the Australian Energy Market Operator already provides recent cost data for new power generation in Australia. It shows that new wind and solar farms can provide the lowest-cost electricity, even when two to six hours’ worth of storage is added.

Hence there is no economic case for new coal-fired power in Australia. After a century of coal, it should not be subsidised any longer.




Read more:
It’s clear why coal struggles for finance – and the government can’t change that


State of the states

While Queensland and Victoria have state government policies to drive the rapid growth of large-scale solar and wind, New South Wales does not even have a renewable electricity target. Yet the retirement of large, old coal-fired stations is in the pipeline: Liddell, nominally 1,680 megawatts, in 2022 and Vales Point, nominally 1,320MW, possibly in the late 2020s.

Coal baron Trevor St Baker bought Vales Point from the NSW government for the token sum of A$1 million in 2015. He wants to refurbish it and run it until 2049 – and his plan has made it onto the government’s shortlist.

Given that Vales Point is now arguably a A$730 million asset, St Baker has made a huge windfall profit at the expense of NSW taxpayers, and so a government subsidy to upgrade it would be unjust.

With the price of solar and wind electricity still falling, it will soon be cheaper to replace old operating coal stations that have paid off their capital costs with new renewable electricity, including storage.

Unfortunately, the newly elected NSW Liberal-National Coalition government has no policies of substance to fill the gap left by retiring coal stations with large-scale renewable electricity. It will therefore be up to the federal government after the May election to provide reverse auctions with contracts-for-difference, matching the policies of the ACT, Victorian and Queensland governments. Also, increased funding to ARENA and the Clean Energy Finance Corporation is needed for dispatchable renewables (those that can supply power on demand) and other forms of storage.

Driving the change

The transition to renewable electricity is already well under way, as even the federal energy minister Angus Taylor admits. The low costs of solar and wind power are driving the change. To maintain reliability, dispatchable renewables (as opposed to variable sources such as solar and wind) and other forms of storage are needed in the technology mix.

Batteries excel at responding rapidly to changes in supply and demand, on timescales of tens of milliseconds to a few hours. But they would be very expensive for covering periods of several days, even at half their current price. So there is a temporary role for open-cycle gas turbines (OCGTs) to meet demand peaks of a few hours, and to fill lows of several days in wind and/or solar supply.

Small-scale pumped hydro, in which excess local renewable electricity does the pumping, has huge potential for storage over periods of several days, but takes longer to plan and build, and has higher capital cost per megawatt, compared with OCGTs.

Small-scale pumped hydro should be the top priority for the federal program. In particular, the off-river proposal by SIMEC Zen Energy, which is part of Sanjeev Gupta’s GFG Alliance, will use a depleted iron ore pit and provide cheap, reliable, low-emission electricity for both GFG’s steelworks at Whyalla and other industrial and commercial users.




Read more:
Five gifs that explain how pumped hydro actually works


Hydro Tasmania’s proposed “Battery of the Nation” would involve building a new interconnector across the Bass Strait, together with possibly three new pumped hydro plants. It’s very expensive and is already receiving A$57 million in federal funding. Its inclusion in the shortlist is worrying because it could soak up all the program’s unspecified funding for pumped hydro.

Furthermore, the need to greatly increase Tasmania’s wind capacity to deal with droughts appears to be an optional extra, rather than an essential part of the project.

Little information is available for the other shortlisted pumped hydro projects. UPC Renewables is proposing a huge solar farm, together with pumped hydro, in the New England region of NSW. In South Australia, Sunset Power (trading as Delta Electricity, chaired by Trevor St Baker), in association with the Altura Group, is proposing an off-river pumped hydro project near Port Augusta, and Rise Renewables is proposing the Baroota pumped hydro project. BE Power Solutions, which does not have a website, is proposing pumped hydro on the Cressbrook Reservoir at Crows Nest, Queensland.

Pumping for Snowy 2.0 (which is not part of the program) will be done mostly by coal power for many years, until renewables dominate supply in NSW and Victoria. Therefore, I give low priority to this huge and expensive scheme.




Read more:
Snowy hydro scheme will be left high and dry unless we look after the mountains


To sum up, new coal power stations and major upgrades to existing ones are both unnecessary. They are more expensive than wind and solar, even when short-term storage is added – not to mention very polluting.

A few open-cycle gas turbines may be acceptable for temporary peak supply during the transition to 100% renewable electricity. But the priority should be building pumped hydro to back up wind and solar farms. This will keep the grid reliable and stable as we do away with the old and welcome the new.The Conversation

Mark Diesendorf, Honorary Associate Professor, UNSW

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Morrison government approves next step towards Adani coal mine


Kevin's Walk on the Wild Side

Michelle Grattan, University of Canberra

The Morrison government has ticked off on the groundwater management plan for the proposed Adani coal mine, an important but not a final step for the central Queensland project receiving the go-ahead.

The decision, taken by Environment Minister Melissa Price, comes after intense pressure from Queensland Liberal National Party members, including a threat by senator James McGrath to publicly call for Price’s resignation if she failed to treat the Adani project fairly.




Read more:
View from The Hill: It’s the internal agitators who are bugging Scott Morrison on Adani


But the Adani decision will not help Liberals fighting seats in the south, with strong anti-Adani campaigns in some key electorates.

Price said in a statement on Tuesday: “CSIRO and Geoscience Australia have independently assessed the groundwater management plans for the Carmichael Coal Mine and Rail Infrastructure project”, and both had confirmed the revised plans…

View original post 660 more words

View from The Hill: Tony Abbott tries some climate adaptation for the winds of Warringah



File 20190308 150683 rfeju5.jpg?ixlib=rb 1.1
Tony Abbott is being challenged in Warringah by Zali Steggall, who has climate policy at the centre of her platform.
AAP/Peter Rae

Michelle Grattan, University of Canberra

Tony Abbott pulled the panic lever on Friday, and Malcolm Turnbull pushed the revenge button.

The gainers from these spectacular plays were Zali Steggall, the independent candidate who is trying to oust Abbott in Warringah, and Bill Shorten, who is handed another break in his campaign to defeat the government.

Years ago, in a much earlier round of the climate and emissions wars, Abbott referred to himself as a “weather vane.” That accurate self-assessment invited ridicule, but his latest change of direction is beyond absurd.

For months, Abbott was calling for Australia to exit Paris, like the Americans. It was part of his unremitting campaign against Turnbull, and the then PM’s drive for a national energy guarantee.

But Abbott’s new view is that leaving Paris is unnecessary.“I’m not calling for us to pull out now,” he told a Warringah candidates’ debate on Friday.

“We had an emissions obsession that needed to be broken and it’s now changed”, with a new prime minister and a new energy minister, he said.

“We can meet our Paris targets without substantial policy change and without significant additional costs on the economy.”

Abbott’s beef with the Paris agreement – for which his government set Australia’s targets – was tied to his jihad against his successor.

What’s mostly changed, though, is Abbott’s own circumstances. He faces what’s for him an existential threat – the risk of being driven out of parliamentary life. Steggall has climate change at the centre of her campaign.

But can Abbott really think his local voters are so naïve that they’ll be convinced by such an obviously expedient shift of position? They know him too well for that.

University of Canberra research has shown they are critical of him, especially over his opposition to same-sex marriage and his wrecking behaviour.

Isn’t his risk that they could simply become more cynical, concluding he’s taking them for mugs, and he could worsen rather than improve his position?

And apart from how Warringah will read his latest shift, what about his vocal right-wing supporters? You’d expect they would be shocked by this backflip.

Abbott didn’t do a full conversion, however – he remains a coal advocate, suggesting the Snowy Hydro Corporation could invest in it.

“Coal-fired power remains the cheapest form of baseload power,” he declared.

That was enough to bring in Turnbull, who slapped down his nemesis from afar. Oceans and time zones mean nothing when your anger burns hot and Twitter’s at hand.

“But it isn’t, ” Turnbull tweeted from London in response to Abbott’s
claim about cheapness. “Today the cheapest form of new dispatchable or
base load energy is renewables plus storage.

“We are now able to have lower emissions and lower prices but we need
to plan it using engineering & economics rather than ideology and
innumerate idiocy”.

In another tweet Turnbull continued, “The reason the fossil fuel lobby and their apologists rail against Snowy Hydro 2.0, and have tried to stop it, is because it delivers the massive storage which does make renewables reliable and this enable our progress to lower emissions and lower energy prices”.

Turnbull was already fired up, having in a BBC interview (recorded on Wednesday London time) once again canvassed the circumstances of his political demise in that “peculiarly Australian form of madness” of last August. Unloading on those who’d brought him down, he contended that “you could argue, that their concern was not that I would lose the election but rather that I would win it”.

If it isn’t enough for a government, weeks out from the announcement of the election, to have two former PMs refighting the climate/energy wars, the Nationals are parading their own obsessions and divisions.

A letter this week from half a dozen Queensland Nationals called for the government to underwrite a new power generation project in regional Queensland (they refrained from specifying coal but that’s what they were thinking). They also said the government should put its “big stick” legislation to discipline power companies to a parliamentary vote – despite the fact it would be amended unacceptably
and so get nowhere.

This was followed on Friday by a Courier Mail report that some Nationals, discontented with Michael McCormack’s leadership, were pushing to have him replaced by Barnaby Joyce before the election.

The agitation is driven particularly by the situation in Queensland, where several Nationals’ seats are at risk – notably Capricornia, Flynn and Dawson.

Joyce did nothing to calm things on Friday when he told the Northern Daily Leader he was “not driving the process”, but if a spill were called “of course I would stand”.

McCormack is not cutting through electorally and critics are unhappy he does not stand up enough to the Liberals.

He’s considered certain to lose his leadership post-election, assuming the loss of Nationals seats.

But any attempt at moving him before the election would be madness – and most Nationals do appear to accept that.

Consider how it would look, in budget week (the only time the parliamentary party is scheduled to be in town before the election) if the Nationals were to roll the Deputy Prime Minister, or make a move to do so.

Anyway, Joyce is now a highly controversial figure within and outside the party. He might win some votes in Queensland, but he might well lose some for the government elsewhere.

With a battle for the “women’s vote” so live at this election, and Labor going all out to exploit Coalition weaknesses in this area, it would be lunacy to think of bringing back someone whose exit from the leadership was partly triggered by allegations (denied) of sexual harassment.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Morrison to announce $2 billion over 10 years for climate fund


Michelle Grattan, University of Canberra

Scott Morrison will announce $A2 billion over a decade for a Climate Solutions Fund, as the government seeks to counter criticisms that it is not doing enough towards dealing with climate change.

The money will extend the Emissions Reduction Fund (ERF), set up under the Abbott government’s “direct action” program, which at present has only $226 million uncommitted in it. More than $2.3 billion has now been committed under the ERF.

The new money – which will be about $200 million annually starting from January 2020 – will be used to partner with farmers, local government and businesses to reduce emissions. The government gives as examples

  • Remote indigenous communities will be assisted to reduce severe bush fires.

  • Small businesses will be supported to replace lighting, air
    conditioning and refrigeration systems to cut energy costs.

  • Farmers will receive assistance with revegetation and drought-proofing.

  • Local communities will receive help to reduce waste and boost recycling.

In a Monday speech, part of which has been released ahead of delivery, Morrison defends the government’s record on climate and attacks Labor’s policy as irresponsible.

The speech will contain further environment announcements beyond the $2 billion.

Climate change was an issue to the forefront in the Wentworth
byelection, the loss of which threw the Coalition into minority
government. It is considered a potent issue in Victoria, where the government has several seats at risk. In the high profile contest in Warringah, NSW, independent Zali Steggall, Tony Abbott’s main opponent, is running hard on it.

There has been debate over whether Australia could on present policies meet its Paris target – that Abbott set – of reducing emissions by 26-28% on 2005 levels by 2030.

Morrison has repeatedly said this will be reached “in a canter”. But the annual UN Environment Emissions Gap Report, released late last year, had Australia among a number of countries that are not on track to reach their 2030 target or have uncertainty based on current projections.

Morrison’s announcement will shore up Australia’s effort.

Moderate Liberals, in particular, have been pressing for more action from the government on the climate front.

In his speech Morrison says: “Our government will take meaningful, practical action on climate change, without damaging our economy or the family budget.

“Our Climate Solutions Package will ensure Australia meets our 2030 emissions reduction target – a responsible and achievable target – building on our success in comprehensively beating our Kyoto commitments”.

He says that Liberals and Nationals “don’t believe we have to choose between our environment and our economy.

“We acknowledge and accept the challenge of addressing climate change, but we do so with cool heads, not just impassioned hearts”.

The government’s 2030 target is the equivalent of cutting per capita emissions by about 50%, one of the largest cut of any G20 country, Morrison says in his speech.

The target is not “a slouch” but nor is it reckless, he says. In
contrast. Labor’s 45% target would require “more than three times the amount of emissions reduction by 2030”.

Modelling by BAEconomics confirmed Labor’s target would put a
“wrecking ball” through the economy, slashing jobs and wages and
increasing wholesale electricity prices, Morrison says.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

A Trump-aligned World Bank may be bad for climate action and trade, but good for Chinese ambitions


File 20190130 108355 11qgq1d.jpg?ixlib=rb 1.1
A World Bank in sync with Donald Trump’s views about climate change and multilateralism would probably help to increase Chin’s role in international development and finance.
Shutterstock

Usman W. Chohan, UNSW

The seat of World Bank president is becoming vacant. Its president, Jim Yong Kim, will step down on January 31, three years earlier than his term formally ends.

His move – described as “sudden” and a “shock,” particularly since the World Bank has been going through significant internal restructuring – gives US president Donald Trump the chance to appoint a replacement more aligned with his outlook.




Read more:
World Bank president: list of reforms African states should be demanding


This is because, since the World Bank’s establishment in 1945, the United States has had outsized influence as its largest shareholder. Its president has always been an American citizen nominated by the US government. Kim was chosen by the Obama administration in 2012.

Rumours circulated early on that Trump was considering his daughter Ivanka for the job. Even though that has since been denied, it’s likely he will choose a candidate sympathetic to his worldview.

This may mean a substantial change in the World Bank’s priorities. In particular, in two areas the bank has played an important and positive role: funding sustainable projects to deal with climate change (“climate resilience”); and encouraging robust international connectivity through trade.

Focus on climate resilience

The World Bank has put substantial emphasis on funding projects in developing countries that address climate change. Last financial year 32% of its financing – a total of US$20.5 billion – was climate-related.

Recently approved World Bank projects included climate resilient transport in the Oceania region (such as in Tonga and Samoa), and solar projects across Sub-Saharan Africa. This is all part of a detailed five-year Climate Change Action Plan underway since 2016.

This concern about the consequences of climate change stands in marked contrast to the Trump administration’s record.

Trump’s disregard of climate science is reflected in the defunding or reorganisation of climate-related research projects and institutions. His appointee to head the US Environmental Protection Agency, Scott Pruitt, played a key role in the US withdrawing from the Paris Climate Agreement and energetically worked to gut pollution protection regulations.

So there’s good reason to believe the Trump administration’s pick for the World Bank will reflect its hostility to climate security, and that the bank’s priority towards funding climate resilience will change as a result.

Antipathy towards multilateralism

The Trump administration has already sought to curb salary growth among World Bank staff. More severely, Trump’s National Security advisor, John Bolton, has argued the World Bank should be privatised or simply shut down.

This is part of a wider “antipathy towards multilateralism” that includes institutions such as the United Nations and the World Trade Organisation.




Read more:
Australia has to prepare for life after the World Trade Organisation


Trump’s belief that free trade has hurt the US is at odds with the World Bank’s long history of facilitating reforms designed to promote international trade.

Part of the original logic for the World Bank was that trade was seen as a means to create interdependence, and thus reduce economic conflict that might lead to war.

The Trump administration has shown it is more than willing to revert to an old-fashioned trade war.

Its tariff contest with China (which joined the WTO in 2001 with the World Bank’s help) is already hurting global manufacturing, with the International Monetary Fund downgrading its global economic growth forecasts as a result.

Though a Trump appointee might not upend the World Bank’s commitment to free trade in principle, the result might be an organisation less active in promoting multilateralism in practice.

Playing to China’s strengths

Ironically a Trump-compliant World Bank might result in promoting its sidelining to the advantage of China.

In its first six decades of existence the World Bank was an immensely powerful international institution. But its relevance to international development and finance is now being overshadowed by alternative funding mechanisms such as private-sector lending and particularly institutions related to Chinese international development initiatives.

China is planning through its Belt and Road Initiative to spend US$1 trillion on international infrastructure projects over the coming decade. Much of these are focused on Eurasian and African regions where the World Bank has struggled most to promote sustainable prosperity.

China has also has built a rival to the World Bank in the form of the Asian Investment Infrastructure Bank (AIIB), which has a sizeable balance sheet and a proactive approach to funding projects, including those in sustainable development.




Read more:
US sparks new development race with China – but can it win?


But in climate resilience and global economic integration, the World Bank still retains the mantle of global leader. Thus far it has welcomed cooperation with the AIIB, signing a memorandum of understanding in 2017.

Blunt its work in these two areas and the World Bank becomes more irrelevant. Combined with the organisation’s serious governance problems, which are most unlikely to be addressed by a Trump appointee, the future for the World Bank is not bright.The Conversation

Usman W. Chohan, Economist, UNSW

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Coal does not have an economic future in Australia


Frank Jotzo, Crawford School of Public Policy, Australian National University and Salim Mazouz, Australian National University

Renewables are stealing the march over coal in Australia, and the international outlook is for lower coal demand. Today the international Coal Transitions project released its findings, based on global coal scenarios and detailed case studies by teams in China, India, South Africa, Australia, Poland and Germany.

Our research on Australian coal transition – based on contributions by researchers at the Australian National University and the University of Melbourne – looks into the prospects for coal use in Australia and for exports, and the experiences with local transition in the case of the Hazelwood power station closure.




Read more:
Hazelwood closure: what it means for electricity prices and blackouts


Coal exports

Coal production in Australia is likely to be on a long term declining trajectory. Almost all coking coal (coal used for making steel) mined in Australia is exported, as is around 70% of steam coal (for electricity generation). Australia supplies about a fifth of the global steam coal trade.

A question mark hangs over the future of steam coal exports. Economic, technological and policy developments in other countries all point to likely falling coal use over time. The international coal transitions synthesis report expects that global coal consumption will go into reverse by the early 2020s.

In most industrialising countries, there are big concerns about local air pollution, and renewable power alternatives are becoming cost-competitive with coal. Add to that the pressure to meet Paris emissions targets.

China and India, on which much of the hopes of Australia’s coal export industry are pinned, mine coal themselves. When overall coal use in these countries falls, imports may be curbed, if only because of pressures to prop up domestic coal mining.

Coal in Australia’s power sector

Most coal used in Australia is for power generation. We are at the start of a fundamental change in the system, where coal power will be replaced by renewables, with energy storage and flexible demand-side response to firm up the system.




Read more:
Want energy storage? Here are 22,000 sites for pumped hydro across Australia


This change now reflects market economics. New wind farms and solar parks can now provide energy at much lower cost than any new fossil fuel powered generators. A new coal fired power plant would need subsidies, take a long time to build, and suffer exposure to future carbon policy.

The competition is now between renewables and existing coal fired power stations. Wind and solar power cost next to nothing to run once built, so they are dispatched first on the grid and tend to bring wholesale market prices down. In turn, the economics of coal power plants deteriorates. They will not be able to sell as much power, and get lower prices on average for every megawatt-hour of electricity produced. New wind and solar is now contracted at prices close to the operating cost of some existing coal plants, and renewables costs are falling further.

Coal plants will be less and less profitable. They will tend to be shut down earlier, typically when major repairs or overhauls are due. Major refurbishments will tend to become unattractive. And the system does not need coal plants to run reliably. A combination of regionally dispersed renewables, pumped hydro and battery storage, gas plants and demand response will do the job.

It is difficult to predict just when coal plants will shut down. The following graphic illustrates the difference between a flat 50-year retirement pattern (as used for example by the Australian Energy Market Operator), with plants retiring at 40 years of age, in line with the average retirement age of plants over the past decade, and two illustrative scenarios that capture the fact that coal plants will come under increasing economic pressure.

In our “moderate” scenario, remaining coal plants retire at 55 years in 2017 and progressively retire younger until they exit at age 30 by 2050. In our “faster” scenario, plants exit at 50 years now, then progressively younger until they exit at age 30 by 2030.

Coal closure scenarios from Coal Transitions Australia report.

Even more rapid closure scenarios are plausible if the cost of renewables and storage continue on their recent trends. We do not present them here, instead opting for relatively conservative assumptions.

The pace of closure makes a big difference to emissions. In the “moderate” scenario, cumulative emissions from coal use are around 2.6 gigatonnes of carbon dioxide (GtCO₂) during 2020-50, and in the “faster” scenario around 1.8 GtCO₂.

As a reference point, a “2 degree compatible” emissions budget for Australia proposed by Australia’s Climate Change Authority has a total national emissions budget of around 5.8 GtCO₂ from 2020-50. Our “moderate” scenario has coal emissions take up around 44% of that cumulative emissions budget, while the “faster” scenario takes up around 32%. By comparison, coal currently makes up around 30% of Australia’s annual net emissions.

It is no longer true that reducing emissions in the electricity sector necessarily means higher prices. These days, and in the future, having policy to guide the replacement of ageing coal capacity with cheap renewables is a win-win for consumers and the environment.

We had better get ready

We better put our efforts in preparing for the transition, rather than trying to stem the tide. That includes a meaningful policy treatment of carbon emissions, and mechanisms to allow more predictable exit pathways. The relatively sudden closures of the Hazelwood power station is an example of how not to manage the transition.

Wholesale prices jumped up because the replacement investment takes time, and governments scrambled to provide support to the local community after the fact.

We can do much better. Australia is well placed for a future built on renewable energy. The change can be painful if it’s not well managed, but the future looks bright.




Read more:
Australia is not on track to reach 2030 Paris target (but the potential is there)


The Conversation


Frank Jotzo, Director, Centre for Climate Economics and Policy, Crawford School of Public Policy, Australian National University and Salim Mazouz, Research Manager, Crawford School of Public Policy; and Principal at NCEconomics, Australian National University

This article is republished from The Conversation under a Creative Commons license. Read the original article.