Australian environmentalists believe the political climate is changing. They say that last month’s Paris climate summit signaled a shift toward a zero-carbon global economy, so Prime Minister Malcolm Turnbull should get with the program, phasing out fossil fuels and slashing emissions further than his center-right government’s target of 26% to 28% below 2005 levels by 2030.
On the surface, the climate debate has shifted away from the skepticism of Tony Abbott,the former conservative prime minister whose opposition to the Labor Party’s carbon tax helped ensure his election victory in 2013. After all, Paris was a public-relations success for the anticarbon crowd. Stocks in fossil-fuel companies plummeted and renewables soared on the Australian stock exchange following the conclusion of the global pact.
Since toppling Mr. Abbott in a party-room coup in September, Mr. Turnbull has overturned the ban on government subsidies to wind farms. Mr. Abbott, now an outspoken parliamentary backbencher, is denounced as a Neanderthal for expressing faith in the coal industry.
But at a more fundamental level, nothing has changed. Climate sensitivity—which measures how much the climate will warm—still appears to be at the low end of the Intergovernmental Panel on Climate Change’s range. There is no new cause for alarm, and the most prominent doomsayers, from American James Hansen to the Brit George Monbiot, have expressed their dismay at the toothlessness of the Paris accord.
The 196 nations only agreed to volunteer their carbon-cutting promises to the IPCC every five years. They don’t have to set ambitious goals, not least because there are no common standards for measuring improvement.
Nor are they required to meet their targets, largely because there is no penalty for noncompliance. Unlike 1997’s Kyoto Protocol, Paris isn’t a legally binding treaty. Nations can provide excuses for failure and pledge to do better next time. That hardly bodes well for verifiable and enforceable action to slash greenhouse gas emissions.
The non-OECD nations that account for about 60% of global emissions are producing more coal and building more coal-fired power stations than ever. More than 2,500 stations are either under construction or planned world-wide, mostly in India and China. Although President Barack Obama has discouraged the World Bank and its affiliates from investing in coal power, the new China-led Asian Infrastructure and Investment Bank won’t be so constrained.
China will continue to improve the energy efficiency of its economy as it grows—a goal it has long pursued—but it says it will only start reducing emissions in 2030. On the eve of the Paris summit, Beijing revealed it had burned 17% more coal a year than it had formally disclosed. Its leaders talk a big game, but the world’s No. 1 emitter won’t sacrifice economic growth for climate change.
Ditto the No. 3 emitter, India. Within days of Paris, Coal India confirmed that coal production would double in the next decade. Millions of Indians still live in the dark, and their leaders are unwilling to depress economic growth.
Carbon remains the cheapest source of energy to reduce poverty. As Indian economistRathin Roy told the Australian public broadcaster after Paris, “I don’t think any country or any Australian would want any Indian child to not have access to a light bulb.”
Climate enthusiasts hail the global climate fund, through which rich nations foot the bill for climate mitigation in the developing world. Industrialized countries say they will provide $100 billion a year from 2020 onward. Don’t bet on it. The developed world raised less than $1 billion last year.
It is also far from clear where the aid will go and on what conditions. Will the U.S. Congress participate at all? Imagine an American politician asking voters to pay higher taxes so Uncle Sam can help China become more energy efficient and economically competitive. Greening the economy is not a cost-free exercise.
Which brings us back to Australia, a coal-producing powerhouse that weathered the global financial storm largely because of the commodities boom. Green activists and their well-heeled urban supporters insist the Paris pact represents the beginning of the end of Australian coal, but command-and-control mechanisms lack broad public support.
Labor Prime Minister Julia Gillard’s carbon tax in 2011-13 was met with public backlash, as was her predecessor Kevin Rudd’s proposed cap-and-trade scheme. These mechanisms amount to lost jobs, lower growth and higher prices up and down the energy chain. No renewable energy source is as efficient as carbon.
Within days of Paris, the Turnbull government approved one of the world’s largest coal mines, at the Abbot Point port in the northeast state of Queensland. The mine will be expanded by Indian energy giant Adani Enterprises. Environmental groups fret that the project poses a threat to the health of the Great Barrier Reef, a charge dismissed by Unesco. Canberra’s decision, subject to rigorous safeguards, serves the national interest and the greater good.
Adani’s expansion will help provide cheap electricity, improve living standards and save lives across developing nations, especially India. It will create thousands of construction and operational jobs in Queensland. And if one or more of Queensland’s proposed Galilee Basin coal-mine projects go ahead, which now seems likely, the Abbot port could be developed to allow increased Australian exports.
None of this should be surprising. According to the International Energy Agency, Southeast Asian coal demand will triple for at least 25 years, and Australia will be the world’s largest coal exporter by 2020. The politicians at Paris harbor illusions, but Mr. Abbott’s belief that “coal is the future” sounds correct.
http://www.wsj.com/articles/the-future-of-australian-coal-1452012514