Opinion: Australia's reliance on fossil fuels is making us a dinosaur

Published Thursday April 30 2015, 9:15am

LAST WEEK was a week of government and communal effort to come to the rescue of people and private property affected by storms and floods.

This is what we expect government to do. Whenever and wherever natural, financial, violent or other catastrophe strikes, invariably we turn to government – police, search and rescue, fire brigades, the defence forces, ambulance and regulators.

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Governments do things that markets cannot or will not do. Governments can also do a lot of prevention through safety and other regulation. They research risks and act to avoid the consequences.

Hitherto, when governments have erred they have done the repairing – gone to war, made the peace, looked after the returned soldiers.

But storms like the ones this week – which scientists say will become more frequent with global warming – should give cause for reflection.

The extent and cost of the potential damage is so high that prudence demands action.

But there is another more significant point. Governments can fix most things, but they will not be able to fix climate change. They will not be able to refreeze the Greenland and Antarctic ice sheets and make the rising seas fall – they will be a bit like King Canute. The damage will be irreversible for thousands or even millions of years.

But governments can force changes to stop the melt in the first place.

However, many people have justifications as to why there is no need for any action at all or no need for urgency.

We have always had bad weather events.

Change is imperceptible.

The science is not conclusive so we can wait before taking action.

Damage is a long time off.

If we see real evidence of climate change we can act then to fix it.

Australia is just one nation and can do little on its own.

Because so many people think like this, governments have been able to get away with doing so little.

This week the Climate Change Authority recommended that Australia cuts its greenhouse gas emissions to 30 per cent below 2000 levels by 2025.

The Government quickly rejected that. Environment Minister Greg Hunt said the target was too great a burden. In the short-term, the government will get away with that argument.

But not meeting the target, or an even bigger target, will be a greater burden than meeting it, and this is aside from any burden caused by climate change itself. This is because of economic and political factors elsewhere in the world.

The two important facts are:

Whatever the Australian Government’s belief or the belief of a significant number of climate-change-denying voters, nearly all the governments of the world see the danger of climate change and are proposing action.

Secondly, because of the fear of climate change, large parts of the world’s energy industries are moving to renewables.

The first fact means that other nations will impose trade and other penalties on Australia unless we do our bit. And our bit has to be a significant bit. Australia is the highest per capita emitting nation on earth. We are 13 th in absolute terms.

There is no case for special pleading.

Indeed, because we are coming off such a high base our task should be easier.

Also, we should not rely on international emissions trading to reach our target to the extent that the Climate Change Authority suggests.

Given international action, if Australia does not act we will be penalised in some other way, so the purely selfish argument that a solid target it is too big a burden for Australia does not run.

The second fact that energy companies are moving to renewables suggests that Australia with its abundant sun, wind and waves should promote its own renewable industry more vigorously.

So even without any damage from climate change itself, the argument for moving to renewables (given the position of the rest of the world) makes good economic sense. When you add the risk of damage from climate change, the case is unassailable.

Indeed, there is a case for subsiding the renewable industry or for government equity investment. It is often the case that worthwhile industries cannot get off the ground without subsidies because the private sector cannot raise the capital or cannot accept the risk.

Once the industry is established, the subsidies can be removed and the government investment sold.

This argument is often made by the private sector about assets. They call it asset recycling. The government sells its established, working businesses (at a proper price, one hopes) to the private sector and uses the money to invest in new infrastructure that is beyond the private sector.

There is no reason why the theory cannot be applied to renewable energy.

The government should remove all its subsidies and tax breaks from coal and mining. If they cannot stand on their own two feet after all this time, they don’t deserve to survive. The money could be used to kick-start renewable energy.

When, as it inevitably will happen, renewables become profitable without subsidy or government investment, the government can withdraw.

Incidentally, the notion that the emerging nations of Africa and India will somehow have their own industrial revolutions requiring a coal-fired power grid is fanciful.

Why would a nation like India waste money on taking poles and wires to every remote village and spending billions on coal power stations and metering when solar panels make more sense? They do not provide power continuously, but they are so much cheaper.

The future is clear -- it makes no economic sense for Australia to remain a dinosaur reliant on fossil fuel.