Australian Parliament building in aftermath of wildfire.
This past summer, Australia experienced one of the most devastating fire seasons on record. Over a period of 80 days, forty-six million acres of bushland were razed (an area larger than Portugal), an estimated one billion animals were lost, including endangered species, and 2,500 homes were destroyed. Tragically, thirty-four people died.
But the fires have done little to ignite climate action on the national political stage. Instead, the country is actually increasing the rate of fossil fuel extraction and combustion — the very things which exacerbated these extreme weather events in the first place.
So why is the Liberal Coalition continuing down this path? And does its “highly mitigated” approach to climate change provide the answer for countries hoping to maintain strong economic growth while transitioning to renewables?
A Costly Event
The wildfires did not just devastate the life and land directly in their paths. Smoke from the blazes drifted as far as New Zealand (1,200 miles away) and poor air quality affected an estimated 11.3 million Australians. In the capital city of Canberra, air quality deteriorated to 38 times the hazardous level – the worst in the world. The wildfires injected 434 Mt of carbon emissions into the atmosphere, which is almost equivalent to Australia’s yearly carbon output. Research published by BIS Oxford Economics estimates insurance costs at 1.65 billion Australian dollars, and the impact on the agriculture and the tourism sectors to be AU$4 billion and AU$4.5 billion respectively.
In an interview with the HPR, Dr Nicholas Biddle, a professor at the Australian National University and co-author of the report “Exposure and the impact on attitudes of the 2019-2020 Australian Bushfires,” noted that “77.8% of the population reported some form of indirect exposure. In our review of the literature, we haven’t been able to identify a natural disaster which has had as diverse an indirect effect on the population.”
The Role of Global Warming
The science suggests global warming played a major role in exacerbating Australia’s recent wildfires. Global warming is enlarging Hadley’s cell — an atmospheric circulation pattern of hot air that travels from the equator to the poles. The expansion of Hadley’s cell and the spread of warmer temperatures towards the poles has increased temperatures in the subtropical ridge over Australia. The consequences of this warming process are drought and high temperatures, which have increased the length and intensity of Australia’s fire seasons — they used to begin in October but now commence as early as August.
In the years preceding the recent fires, the rates of rainfall in autumn and winter on the south-east coast, where Australia’s wildfires are most often concentrated, had decreased significantly. And across the continent, 2018 and 2019 were Australia’s driest years. Australia also measured its hottest day on record on 17 December 2019 with an average high temperature of 41.9 degrees Celsius (107.4 Fahrenheit) only one day after the previous record was broken. High temperatures and a low rate of rainfall led to drought and the accumulation of dry forest fuel, which intensified the fires this past summer.
In an interview with the HPR, Ken Thompson, former Deputy Commissioner of NSW Fire and Rescue and co-founder of Emergency Leaders for Climate Action, noted that “Australia’s fires typically start in the south-eastern part of Queensland and progress over a period of a few months down through New South Wales, the Australian Capital Territory, Victoria, and out through South Australia and Tasmania. They have a similar pattern on the west coast. This past season we had the entire area burning at the same time… It overwhelmed the fire and emergency services because, typically, they share resources.”
A number of politicians, including the former leader of the National Party Barnaby Joyce, suggested that Australia’s recent wildfires were intensified by a concerted reduction in the number of controlled burns conducted in national parks and bushlands as a result of environmental lobbying. Controlled burning involves setting planned fires to rid a forest of dead leaves, tree limbs and other natural debris that acts as fuel for fires in order to prevent a destructive wildfire in the future. These controlled burns can only be scheduled for a period when they will not pose a threat to the public.
Ken Thompson disagrees with Joyce. He says that in some wildfire-prone areas of Australia there is now a window of only a few months, weeks, or even days in which controlled burning can be done because fire seasons are becoming longer and conditions are now less conducive to being able to use the technique. He also suggests that “When you reach a certain level of fire intensity, controlled burning has very little impact, if any. Any fire over 50/100 is severe and will overwhelm any hazard reduction or controlled burning that’s done. A catastrophic or code red fire is 100/100 and during the recent fires we had regions of over 200.”
The Politics
Australia’s climate policy in the past decade has consisted of an amalgam of rebranded initiatives with mostly similar functions. A serious attempt was made late in 2011, led by Julia Guillard and the Labor Government, to introduce a mixed carbon pricing scheme and cap-and-trade initiative as part of the Clean Air Act. The program led to the largest annual reduction in greenhouse gas (GHG) emissions in 24 years while, most noticeably, GDP continued to grow by 2.6% p.a., according to the Australian National University. But the foot was taken off the accelerator in June of 2014 when the Liberal Party regained power and repealed the Carbon-Pricing Scheme.
Since the abolition of the Scheme, Australian governments have made little headway on climate action. The current Liberal Government’s policy is focused on the AU$2 billion Climate-Solutions Fund launched by Prime Minister Scott Morrison in February of 2019. The Fund is a voluntary-corporate initiative spread over 15 years, which pays large companies when they introduce ecological programs that reduce GHG emissions. It is a rebranded version of the Emissions-Reductions Fund which ran out of capital after three years and was not refunded. Environmental-economics experts from the University of Melbourne have criticized both funds as initiatives that do not adequately address the core issue of GHG emissions. They say that the Fund does nothing to divert the fossil-fuel sector towards non-renewable sources which they believe is needed.
In November of 2019, Scott Morrison claimed that Australia’s emissions are too small to make a difference. The Liberal Coalition points out that Australia’s domestic consumption of fossil fuel only contributes 1.3% p.a. to global carbon dioxide emissions. But if Australia’s total carbon footprint (including exports) is included, this figure jumps to 4.15% and Australia becomes the six-largest global contributor to climate change. Australia’s per capita GHG emissions are also the highest in the developed world.
In an interview with the HPR, Dr Peter Drysdale AO, Emeritus Professor of Economics at the Australian National University’s Crawford School of Public Policy, outlined that the current Government is “torn between a couple of main perspectives: one which is very strongly disrespectful of the science and one which is intelligently trying to come to terms with the science as well as manage the economic transition that is necessary in a way that it is politically positive.”
The Australian government has recently added that any transition to renewable energy will involve an intermediary reliance on gas and liquefied natural gas (LNG). In a speech to Australia’s National Press Club in January this year, Prime Minister Scott Morrison stated that “There is no credible energy transition plan for an economy like Australia that does not involve the greater use of gas.” And in the past year, the Liberal Government has moved to open new gas projects in every state and territory of Australia, except for Tasmania and the ACT, as well as to provide extra subsidies to gas developments on the east coast. In addition to being the world’s largest exporter of coal, in 2019, Australia overtook Qatar as the world largest exporter of LNG.
Although the Australian government insists that gas is the preferable transition fuel, research from the American Association for the Advancement of Science suggests that gas tends can be more harmful to the environment than coal. Bruce Robertson from the Institute for Energy Economics and Financial Analysis told the HPR that “There are great underestimations of the greenhouse effects of gas. You only need very minimal leakages in a supply chain, between 2% and 3%, and gas is worse than coal for GHG emissions over a 20-year period. LNG also uses vast amounts of electricity.” The Government needs other policies that do not involve an increasing reliance on gas in order to deliver the structural changes necessary for Australia to decarbonize.
Prime Minister Morrison recently stated that “Australia’s climate policy settings are to meet and beat the emissions reduction targets” of 26 to 28 percent of 2005 levels by 2030 under the Paris Agreement.” But the 2019 UN Emissions Gap Report found that Australia is not on track to fulfil its promise under the Paris Agreement. The Report stated that, “Australia has no major policy tool to encourage emission reductions from the electricity sector in the short to medium term…emission levels for 2030 are projected to be well above the target.” Since the abolition of the carbon tax in 2014, Australia’s GHG emissions have increased steadily every year and the 2020 Climate Change Performance Index ranked Australia’s climate policy 56th out of the world’s 61 highest emitting countries.
More recently the Australian government has said that it will carry-over 370 million tonnes of emissions credits from Kyoto 1 and 2 towards its target of removing 695 million tonnes of emissions from the atmosphere by 2030 under the Paris Agreement. But following Kyoto 2, international bodies attempted to restrict the accounting measure because it benefited countries, like Australia, that had much more attainable carbon reduction targets. The Investors Group on Climate Change found that if every country with these credits were to follow Australia’s lead and deduct them from their Paris targets, an extra 13 billion tonnes of carbon would be emitted into the atmosphere and the Paris Agreement would invariably fall through.
The Economics
To date, Australia’s energy needs have been largely met by abundant and low-cost coal resources. The current government argues that making a hasty transition to renewables and curtailing its reliance on fossil fuels might jeopardise the economy. But is this the case?
Dr. Drysdale explained that Australia’s economy is still substantially reliant on fossil fuels through domestic energy production and through exports. He noted that, “The main baseload power is still supplied by power stations — with the exception of the hydro capacity of the Snowy Mountains and Tasmania — and they are coming up to their use-by date. Australia is also the top global supplier of coal and gas internationally, particularly to Japan, Korea, and China.”
The mining and resource sectors currently account for over 50% of Australia’s total export earnings and for 8% of Australia’s GDP according to the Reserve Bank of Australia. Yet the sum of agriculture, tourism, and foreign-student revenues — industries that will be most heavily impacted by climate change — also cumulatively account for approximately 8% of Australia’s GDP and hundreds of thousands of jobs. The Government also provides AU$29 billion of taxpayer funds in subsidies to the fossil fuel industry every year or AU$1,198 per person according to the IMF.
In addition, Australia’s per capita economic losses from climate change may be 12 to 24 times more than that of the global average. Dr. Drysdale stressed that “These findings are absent from the policy debate in Australia and they have to become more important in the discussion to ensure Australia is at the forefront of managing a climate change adjustment globally.”
Australian economist Dr. Ross Garnaut, a colleague of Dr. Drysdale, outlines in his book “Superpower: Australia’s Low Carbon Opportunity” that Australia could reach 100% renewable electricity by the 2030s while significantly boosting its economy. He notes that Australia has considerable opportunities for growth in renewable energy generation because the country has an abundance of solar and wind resources and because the cost of battery storage systems and installation has decreased significantly in the past decade. Under Dr. Garnaut’s vision, Australia could play an increasingly important role as a provider of renewable energy to its neighbours through direct electricity exports or by exporting energy to global markets as hydrogen.
A report published by the Institute for Sustainable Futures also supports Garnaut’s findings. It estimated that the transition to 100 percent renewable energy would cost Australia AU$800 billion between now and 2050. Despite the high price, Australia would save AU$90 billion more with this approach than if it continued down the path of fossil fuels. And the researchers estimated that in the long term fuel savings would cover 110% of the funds needed to transition the economy.
The Government argues that the economy cannot handle the burden of going green. But if Australia does not act more quickly, its third, fourth, and fifth largest industries of agriculture, tourism, and foreign students will bear the brunt of climate impact. And ultimately, the benefits of mitigating the impact of climate change for Australia outweigh the costs.
Being Brave
The research suggests that Australia has the capacity to decarbonise its economy but this will not happen without comprehensive policies and directed investment. Experts from the East Asia Forum suggest that the current Covid-19 crisis might inadvertently provide the setting Australia needs for investment in renewable energy. With Australian oil prices at a 20-year-low, the Government could transfer portions of its oil industry subsidies to households and businesses in the move towards renewables without much of an affect on pricing. As part of future stimulus packages responding to the damage done to the economy by Covid-19, the Government could also earmark funds for Australia’s renewable sector, which would protect jobs and reduce Australia’s long-term carbon emissions.
As Dr. Drysdale suggests, “the political economy of managing a global commons problem like climate change is always tremendously complicated, not only for Australia. It will only be successful if it is married with a clear vision of where the economy can go in a lower fossil fuel energy environment overtime. That’s where Ross Garnaut’s vision of the renewable energy superpower comes in. I think that’s the bottom line.”
Image: Australian Associated Press / Lukas Coch
