future clean tech

No. Absolutely not. And yet the conservative Wall Street Journal yesterday implied that America should, in a column entitled, “Down Under: Can the US Learn From Australia’s Emissions Plan?”

It’s easy to see why the Journal is pumped about Australian Prime Minister Kevin Rudd’s “Carbon Pollution Reduction Scheme” (that’s what they’re calling the Aussie ETS): it’s a sop to heavy polluting industry and the conservative opposition that supports it. The amended legislation gives a free ride to the carbon mafia, delaying really significant cuts in CO2 and passing on the residual costs to the average punter. The minimum “guaranteed” reduction is 5% by 2020 – talk about rearranging the deck chairs on the Titanic. Only this time there won’t be an iceberg in sight.

Interestingly, conservative Opposition leader Malcolm Turnbull chose to lay his leadership on the line over this issue. His Liberal Party is severely divided over the legislation and the Liberals’ usual political bedfellows, the Nationals, are united against it.

Turnbull is an ideological descendant of the old, pre-John Howard Liberal Party: liberal on social issues, and to a greater or lesser extent conservative on economic issues. Global warming is a social issue with serious economic repercussions (and, what conservatives tend to discount, serious opportunities) and so it is no surprise that an old-school Liberal like Turnbull would support a sort of diluted version of action on climate change – but action nonetheless.

Turnbull’s dilution of the CPRS bill is worrying enough, but the really interesting thing is that much of his party thinks he’s gone too far. Former Prime Minister John Howard was almost singlehandedly responsible for the conservatisation of Australian politics, and the conservative rump of the party Howard left behind is about to commit collective suicide by declaring war on Turnbull for being too progressive. Turnbull, whose leadership is in serious trouble, is probably the best hope the Opposition has of breaking through the Government’s approval numbers anytime before 2013.

There is no lesson for America here. Australia’s electorate is overwhelmingly in favour of action on climate change, whereas the American electorate is somewhat more divided. I’d like to be able to say that Australia offers a warning to conservatives overseas not to oppose climate change action, but it seems like the Liberal Party, much like the Republican Party, is trending rightward.

From a policy perspective, Australia’s recent experience is a total disaster. It represents a triumph of politics over policy. The US and the EU are both looking at 17% and 20% cuts respectively by 2020, which is nowhere near enough. We need to cut 80% by 2020. Australia’s promising 5%. No lessons here.

It is good to see companies vying to qualify for NGO certification, like the Rainforest Alliance’s green frog seal (pictured). Much is made of the issue of government regulation – the “stick” approach – but corporate “carrots” can also be effective. The profit motive is the cornerstone of our economic system, and we might as well use it to good effect.

This week, the Sydney Morning Herald was gushing about corporate uptake of the seal: companies are eager to qualify for the logo by meeting, in this case, Rainforest Alliance’s 10 criteria for sustainable farming (set by the Sustainable Agriculture Network).

This is certainly a good thing, just as the idea behing “Dolphin Safe” products was and remains a good thing.

My only concern is the phenomenon of greenwashing. In New York, I see it every day at the supposedly earth-friendly super-grocer, Whole Foods, where product after product is packaged in green and other earthy colours and marketed as “organic” (”organic” is the new “natural” in corporate branding terms). All kinds of tricks are used; companies know that savvy customers prefer plain cardboard packaging and certain types of simple fonts that hark back to an idyllic age without industrial-sized tractors, artificial animal growth hormones and tumour-inducing chemical pesticides.

In the case of the green frog certification, my only concern is that only 30% of a company’s product needs to come from SAN-certified farms. (Mother Earth News complained about this earlier in the year.) The trouble, of course, is that if a higher percentage were mandated by the Rainforest Alliance, fewer firms would join the program, and less overall produce would be sourced from certified farms. I get it – they’re trying to find the sweet spot.

My personal preference is that, when such programs become reasonably successful, the government ought to step in and set up strict mandates. The increase in price for the consumer would be negligible compared to the benefit it would provide, and a mandate would level the playing field for all firms.

Of course, this would remove the competitive advantage from firms who were early adopters of the certification – but, in my view, the huge advantage of being an early adopter is more in the bragging rights than anything else.

I think it would have been fun to be one of the students to work on this!

Seed capital, anyone?

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Fairfax is reporting, “Deal struck on renewable energy“. Finally, Australia has a renewable energy target (RET): 20% by 2020. Politicians seem to like targets that sound good when you say them. Anyway, by 2020, retailers will be forced to buy at least 20% of their energy from renewable sources.

This target will be enough to give clean energy a big boost. This is actually an unfortunate state of affairs, because it means that the bar was already set too low. Truth be told, the bar wasn’t set anywhere and it will only kick in on January 1, 2010. I maintain that we are perfectly capable of reaching 80% sometime in the 2020s. There is no reason to maintain coal-fired power plants much beyond 2030. I mean, nobody is financing the construction of them today anyway.

That’s because the market anticipates the Emissions Trading Scheme which the Coalition is still dithering over. Now, nobody can say that this Labor Government has a surplus of vision, but the Coalition is another story entirely. It has stalled the introduction of a trading scheme, and contributed to the dilution of this RET:

The Coalition has secured more exemptions for industry from the cost of the RET in the deal struck today. That means households will pay a greater share.

Mr Hunt said heavy-polluting, trade-exposed companies would be exempt from paying either 60 per cent or 90 per cent of the cost of the RET. That’s more of a free ride than the Government originally offered.

The fact that there is now a mandatory 20% renewable target is certainly good news. But a pure RET would not only act as a mandate for renewable energy production, it would also act as a disincentive to dirty, polluting corporations. The Coalition has softened the blow even more for these companies. Any government assistance should be diverted to build the renewables industry – not provide welfare to old dirty anvil industries.

And then there is this nugget from Opposition Environment spokesman, Greg Hunt:

Before today’s deal, the Government had already bowed to some Coalition demands, agreeing to treat coal gas as “renewable”, and separating the RET from the failed ETS.

Mr Hunt said the new deal was “a victory for common sense and a victory for the environment”. It was also a victory for Opposition Leader Malcolm Turnbull, he said.

Of course, if the Opposition thinks that treating coal gas as “renewable” is a “victory” for anything or anyone but the carbon mafia, they are sadly mistaken. Voters will continue to note the Opposition Leader’s reluctance to confront the conservative rump of his own party and its coalition partner. And businesses are even more keenly aware of the undue consideration politicians are giving to the rich, dirty energy industry. This comes off as nothing if not another failure for a beleagured opposition leader.

Over the last couple of years, Australia’s territorial waters were quietly expanded for one reason and one reason only: the discovery of liquefied natural gas (LNG) off the Western Australian coast. A few stories have been seen and heard on the ABC and in the press over the past 18 months, hinting at vast, untold wealth lying within Australia’s newly extended borders, but now our new golden goose has begun to lay eggs.

Yesterday, a $50 billion deal was done to supply China with gas for the next 20 years. And this is certainly not the end of it: according to the Sydney Morning Herald, “the resources boom is far from over”.

While this is very good news for Australia, and while gas is the least dirty of the fossil fuels, the implications for the renewables industry remain unclear. The much-hyped “end” of the resources boom was a shot in the arm for renewable energy, an industry which suddenly had new relevance in an economic downturn as Australians were mourning the end of the gold rush.

But now, gas is challenging coal as king of Australia’s dirty fuels industry. With all this cash flowing in from China, there will be less of an incentive for the government to pump money into clean energy. Why put dollars into a hard sell like solar thermal plants when you can make billions by siphoning LNG out of the continental shelf?

Last week, Terry McCrann – “Australia’s foremost business commentator” – published a piece entitled The enormous cost of hot air. It would be charitable to call the title of the article ironic.

Terry McCrann, allegedly "Australia's foremost business commentator"

McCrann parrots the rest of the world’s skeptics in citing a Spanish paper whose most outrageous claim is that each green job created leads to the destruction of at least 2.2 jobs in the wider economy.

This is, of course, utter nonsense. The Spanish article makes this spurious claim simply by dividing the amount of renewables subsidies per worker (€571,138) by the average amount of resources the private sector employs per worker (€259,143). Voila, 2.2. The problem with this calculation are many, including, but not limited to, the following:

• No account is taken of the amount of subsidies given to the dirty energy sector, or any other economic sector for that matter.
• While government subsidies represent an opportunity cost, it is a stretch to call the use of those resources “job destruction” when no actual jobs are being destroyed.
• State subsidies are always going to be higher for nascent industries. Afterwards, economies of scale will accrue.

Here’s Terry McCrann’s credulous take on it:

While it would be inappropriate to translate Spain’s experience directly to the US, the Obama Administration’s claim that “green energy” could create 3-5 million jobs is likely to directly wipe out 6.6 million to 11 million jobs elsewhere.

Why? Because of the costs to production and employment, principally in metallurgy, non-metallic mining and the food processing, beverage and tobacco industries.

It is not clear whether the study factors in the jobs that would be lost from reduced consumer spending because of the higher power costs.

But don’t panic. Because none of this is real. It’s fiction in the mind of a skeptic. In reality, yes, some jobs will be lost. And that is no bad thing – jobs are in a constant state of destruction and creation. Punch-card computer operators were reskilled. Asbestos workers had to find other work when we finally figured out how toxic asbestos is. And now, as we finally acknowledge what we’ve known for a long time – that dirty industry is killing us and our planet – jobs in dirty industries will be lost.

But jobs will be created in clean industries, and they will far outweigh the number of jobs that will be lost in dirty old industries – no matter how much tricky mathematics some heretofore unheard-of academic and “Australia’s foremost business commentator” try to spring on the unsuspecting public. You simply can’t say that 2.2 jobs will be lost for every green job created on the basis that significant government expenditure is going into the clean energy space right now. Much of that is capital spending. To say that this initial spend is “destroying jobs” is to compare apples and oranges. It is doing nothing of the sort. The fuel costs of renewable energy are generally zero, and so in the long run, we’ll be saving money on energy and freeing up resources to create even more jobs.

Frankly the illogic is enough to give a man a seizure. But it is so silly that it has been taken seriously by the kinds of elements that take silly things seriously (to wit: the Washington Post (which deigned to sneer at the president’s press secretary for calling the premise of the article “weird” and “simply flat wrong”), the New York Post, and “Australia’s foremost business commentator”, among others) that I just had to take it on.

There’s more to say about this, but I’ll leave it for next time, because there will surely be a next time.

Excellent article in today’s New Matilda – The Unavoidable Green Future (will open in new tab/window). It’s an interview of Ben McNeil, author of The Clean Industrial Revolution. Here’s my favourite bit:

“Right now we’re in the same position in Australia as GM was in the 1990s. We’re protecting high-carbon assets. We’re protecting coal, we’re protecting oil and we are looking at carbon price, a carbon cost in the future. There is no doubt that the world is going to value carbon, and that means higher carbon costs. So how the hell is coal going to survive in a world moving to low carbon? It’s not going to.”

McNeil points to research by Chris Reidy at the University of Technology Sydney which estimated a public subsidy of $9-10 billion on 2005-06 figures for the transport and electricity industries alone.

“When people say let’s do nothing, let’s just play that scenario out,” McNeil continues, “if we do nothing in terms of emissions, it’s essentially saying let’s rely on these old relics for our future prosperity in terms of economic growth. But Japan and the EU, who buy most of our coal, are de-carbonising their economies. Why would they be buying coal? They’ll be getting gas, they’ll be getting renewables, they’ll be getting more nuclear, they’ll be doing other things. So someone who says this will be devastating to our economy — it doesn’t make sense.”

But what about the argument, often voiced by the Opposition, that Australia should wait until the rest of the world puts a price on carbon before it acts?

“It’s funny. When someone says there is no current price for carbon they’re just living in la-la land. There’s a very strong shadow price for carbon right now, irrespective of the Government. Last year, 45 coal-fired power stations went off the books in terms of planning. They didn’t go off the books because of coal technology — we’ve had coal for a long time. They [were cancelled] because of the financiers, the Wall St bankers. They said ‘Actually, in a carbon constrained world, where you’ve got a 50-year asset, the carbon price could go from $20 a ton to $200 a ton within 10 or 20 years, so we’re talking about huge carbon liabilities here.’”

“These guys in the coal industry are just delusional, completely delusional.”

To read more, click here.

This article appeared in the Sun Herald today: “Emissions scheme’s $6bn boost to the economy“.

An internal report by National Australia Bank seen by The Sun-Herald suggests the emissions trading debate in Australia has been dominated by claims about the short-term costs, and scant attention has been paid to new investment opportunities.

“The average year-on-year investment created by the [Carbon Pollution Reduction Scheme] could be up to 60 per cent greater than that committed for infrastructure in this year’s budget,” the report says.

It warns there has been “little consideration of the investment stimulus” that would be created as the economy becomes less greenhouse-intensive.

“This is unfortunate, as discussion of any costs should be balanced with an examination of the opportunities.”

Duh. The only reason the scheme has been delayed in Australia is because the only industries set to lose from its implementation – heavy polluting ones – have lobbied to have it delayed. And they’ve convinced the public with their false dilemma of environment vs jobs. Here’s how the article ends; don’t worry, I’m not spoiling anything for you. Trust me:

Treasury modelling produced for the Government concluded the emissions trading scheme would only have a small net impact on employment.

But the Minerals Council says the mining sector will lose 23,510 jobs over the next decade if a 5 per cent target is adopted.

And, as I’ve written before, punch-card computer operators lost their jobs when technology improved. My question is: um, so?

This week’s Australian federal budget was nearly as short-sighted as ever. What we saw on Tuesday was mostly greenwash. Bob Brown was right: this was not a green budget.

Federal Treasurer, Wayne Swan

The government pandered to narrow dirty business interests and dressed its actions up with a poorly-disguised sop to the environmental movement.

It is true that we’ve committed serious money to a national broadband infrastructure. But that should have been done years ago. The info tech boom is now a fact of life. And now we’re left lagging in the next crucial tech boom: clean tech.

A welcome initiative is the government’s $1.5 billion over 4 years that will go into building serious centralised solar generation infrastructure.

But this is a mere sideshow – it’s the sop to the greens. It is a smokescreen for the government’s real agenda: protecting carbon-intensive industries.

Out of total budget expenditures of roughly $340 billion, $4.5 billion is going into “clean energy”. That’s just over 1% of the budget. The lion’s share of this money is going into that oxymoron, “clean coal”.

“Clean coal”, or carbon capture and storage (CCS), is a largely unproven technology. Certainly more unproven than established renewable alternatives like wind and solar. It’s 10 years away from industrial-scale deployment. And it’s not “clean”.

But since coal-fired power and coal exports are entrenched Australian industries, it is easy for the government to fund relatively unproven CCS technology and get away with greenwashing it by calling it “clean” technology.

This, after last week’s delay in the emissions trading scheme, casts serious doubt on the government’s commitment to the environment and to green business.

What happened? The government should be investing many billions into true, proven clean technology. Where is the serious funding for wind, solar, smart grids, electric vehicles, and other clean technology infrastructure and R&D?

Our government doesn’t get it. While our most promising future jobs engine – clean energy and clean tech – is left to fend for itself, the government’s priorities are clearly reflected in, for instance, its increases in defence expenditures, its clear commitment to subsidising the fossil fuel industries (partly by greenwashed stealth), and its refusal to include petrol-induced emissions in the ETS.

Serious money needs to be pumped into this sector. Instead, the government has doled out $20 billion in frivolous cash giveaways (a vote-buying ploy spun as “fiscal stimulus”) and delivered an unnecessarily reckless and short-sighted budget.

Will we ever learn?

When the Australian Conservation Foundation endorses the weak ETS that is being debated at the moment, you know the situation is dire.

The ACF and other green advocacy organisations recognise that the adoption of the government’s proposed CPRS is at least a step in the right direction. They figure that they and other groups can then lobby the government to increase the emissions reduction targets.

I agree with the ACF – the proposed ETS is weak but it must be passed so it can be operational by the beginning of next calendar year. It is, at the very least, a start. Not an especially good start, but a start nonetheless.