If the rest of the world followed Australia’s “leadership” on cutting greenhouse gas emissions and reaching net zero, what would that mean? This was the question we were left to ponder after the assistant energy minister, Tim Wilson, defended the Morrison government’s record this week after the latest UN climate assessment was released.
“We need global emissions to come down, which means we need other countries to follow our leadership in making sure they take decisions and back them in,” Wilson told the ABC, while criticising the UK and China for “backsliding” and a lack of commitment on targets.
Despite having multiple opportunities in recent years to increase its 2030 emissions reduction target – including before the most recent UN climate talks in Glasgow – Australia has stuck like glue to its unambitious Abbott-era goal, agreed almost seven years ago.
If the rest of the world followed that level of “leadership” on emissions cuts, then analysts have said global heating would reach 3C or above.
Does that “leadership” include agreeing at those global climate talks that countries should “revisit and strengthen their 2030 climate targets” within a year, only to then issue a “yeah, nah” in the days that followed? That was not so much a backslide as self-induced whiplash.
Does this “leadership” include celebrating booming coal and gas exports, as the resources minister Keith Pitt did last month? Does it include a “gas-fired recovery”? Does it include being the world’s second-largest exporter of thermal coal and the joint biggest exporter of LNG?
Does it include approving four coalmines in a month, just weeks before the Glasgow talks? Is asking for coal plants to run for their entire lifetime, as the prime minister has done, something that all other countries should be doing?
Wilson also claimed the Morrison government was the first “in Australian history to announce a comprehensive economy-wide plan towards carbon neutrality by 2050.”
This “economy-wide plan” equates to choosing several technologies for funding and development and then setting some “stretch goals”.
And here is your almost weekly reminder that the government’s modelling of its plan showed that by 2050, Australia would be short of zero by 226m tonnes of CO2-equivalent.
The “plan” said that under these technology goals, Australia would still need to buy 94m tonnes of overseas offsets and generate 38m tonnes from a controversial negative emissions technology which experts have described as farcical and unproven.
Gas to go?
Australia’s powerful gas lobby said the IPCC’s report “confirms the important role natural gas and its decarbonisation tools play” to cut emissions.
The Australian Petroleum Production & Exploration Association chief executive, Andrew McConville, said: “Gas will continue to be a part of the future cleaner energy mix as a cleaner alternative that complements so many of the pathways to net zero by 2050.”
What the IPCC report actually said is far more nuanced and conditional, making clear that getting to net zero under its various scenarios would see the use of gas fall.
Where it was used – either for electricity, direct power or for hydrogen production – any continued use of gas would be heavily reliant on carbon capture and storage (CCS).
Without CCS, the report says keeping global heating close to 1.5C would see gas use drop by 70% between 2019 and 2050.
But despite decades of promises, CCS remains expensive and marginal.
The industry’s own data, examined in this column last year, suggest globally it can currently capture only about 0.3% of the 36.4bn tonnes of greenhouse gas emissions caused by fossil fuel use.
The IPCC report also says investments in fossil fuel infrastructure will see energy systems “locked-in” to higher emissions, “making it harder to limit warming to 2C or 1.5C.”
Budget for higher electricity prices?
Last week’s official budget papers claimed the government “has achieved its goal of wholesale electricity prices under $70/MWh” in the past two financial years.
“That was temporarily true,” says Dr Dylan McConnell, an energy systems expert at the University of Melbourne.
“But it looks odd at the moment given what’s happening with wholesale prices,” he said, with prices rising rapidly.
McConnell, who tracks energy prices closely, says wholesale electricity costs in the National Electricity Market did drop below the $70/MWh mark for the financial year 2020 to 2021. But if you take the 2021 calendar year, then they didn’t average this low.
In the first quarter of this year, the price across the National Energy Market was $108/MWh and, with the exception of South Australia, wholesale prices are double what they were a year ago.
They are still rising, he says, and will probably be passed on to consumers by retailers soon.
McConnell said the reason behind these price increases was partly down to the rising cost of coal and gas as countries exclude sources from Russia (which, as I mentioned earlier, was an issue celebrated last month by resources minister Keith Pitt).
Bjorn again
Commentator and political scientist Bjorn Lomborg appeared annoyed that UN secretary general, António Guterres, and other world leaders are still making the climate crisis a priority as Russian forces kill civilians in Ukraine.
In a column in The Australian, which also ran in the Wall St Journal, Lomborg wrote “the global elite has an unhealthy obsession with climate change.”
Under a threat of nuclear war, Lomborg pointed to the supposed costs of getting to net zero, referencing a report from consultants McKinsey.
The report, Lomborg claimed, showed “the policies will cost $US9.2tn every year until net zero is supposed to be achieved in 2050” and that “according to the McKinsey study” this meant achieving net zero would “cost every American family $US19,300 a year.”
Yet Lomborg did not explain that the same McKinsey report said this spending “should not be seen as merely costs” and that “many of the investments have positive return profiles”.
A spokesperson for McKinsey & Company told Temperature Check the $9.2tn figure related to total spend and not an increase, and included $2.7tn that would continue to be spent “on high-emissions assets”.
“Furthermore, our projection shows that if the current policies put in place across countries, as well as their expected population and income growth, were accounted for, the increase could be only about $1tn annually,” the spokesperson said.
That spending, McKinsey said, “would prevent the further buildup of physical risks and the additional costs arising from a more disorderly transition, which could be sizeable in both economic and humanitarian terms.”
And what of Lomborg’s claim that McKinsey had found achieving net zero would cost every American family US$19,300 each year?
This was “a mischaracterisation of our work”, a spokesperson said, adding “such a claim overstates and oversimplifies the manner in which costs of the transition would be shouldered.”
Private enterprise would carry out a “significant portion” of the spending, McKinsey said, and some of this “eventually flows to households in the form of supplier payments, salaries and consumer surplus”.
“This is not a public sector expense that would be financed solely by taxpayer’s money,” McKinsey said.
Lomborg told Temperature Check his description of the $9.2tn figure as a cost was “similar to how Bloomberg describes the report with its headline “McKinsey Pegs the Price Tag of a Livable Climate at $9.2 Trillion a Year”.
He said: “We get both energy, jobs, and zero CO₂ emissions for this cost, but this is what is normally understood to come along with the cost of a policy.”
Lomborg also argued McKinsey’s reference to the additional cost being as low as $1tn a year was across two scenarios that were not comparable because they assumed different energy outputs.
McKinsey rejected this claim, saying “the relevant metric is not total energy output, but rather the ability to meet the world’s energy needs.”
McKinsey added it was “incomplete to consider those [$9.2tn] costs in a vacuum without mention of the anticipated benefits of the policies”.
“For this reason, we urge consideration of the benefits alongside the costs so a more informed decision on the value of the investment can be made.”
Lomborg claimed it was “absolutely relevant” to “highlight the cost per family” because he claimed the spending “can only be shouldered by Americans”.
McKinsey said framing the spending as a cost to individual families “misstates the distribution of costs and unfairly leaves out the value of the benefits” to families.
A statement added: “While you could potentially argue that a certain figure would be spent in the United States per person or per family on average, it is simply untrue that every American family would be shouldering that bill or that they would be shouldering it at the same rate and in the same fashion.”
