All on eyes are on Barnaby Joyce right now. Is he playing cat and mouse with us? Will he agree to net zero by 2050 not “if at all possible” but absolutely and unequivocally?
He’s certainly opened the door to a chink of light. Just days after he was re-elected to leadership of the National Party, he mentioned cost in relation to net zero. That’s code for “show me the money” according to one report. In recent days and following an appearance on the ABC’s Insiders a few weeks ago, the chink got bigger.
The thinking in politico-land is that there is no doubt he will strike a deal with the PM. This will be essential so that Scotty from Marketing has got something to take to COP26 in Glasgow and won’t have to endure more ribbing from his counterpart in the UK, Boris Johnson, who’s been urging climate action and in no uncertain terms from his mates in the colonies.
The money’s there. As we’ve been saying for years, the GFC showed there’s plenty of dosh around when governments want to bail out some bad boys in the financial markets, without the sky falling in. Now Covid’s reinforced this.
Call it quantitative easing, modern monetary theory in practice, or good old government largesse, according to economic writer Alan Kohler in The New Daily on Thursday, the Australian government has raised $173.1 billion in new debt since March 2020. And the Reserve Bank’s been buying government bonds at the rate of $5 billion a week.
So money is no object. And Kohler says these amounts will end up looking stingy when the real cost of climate starts to hit where it hurts, whether we’re ready or not.
Joyce clearly knows this and in the wake of the latest devastating report on the climate from the Intergovernmental Panel on Climate Change (IPCC) he will probably agree to sign up to net zero in 2050 in return for generous benefits for his regional constituents.
Richie Merzian who is climate and energy program director for think tank The Australia Institute, agrees Joyce is “not really saying no, he’s saying ‘how much will you give me?’
“It’s not a hard deal for Barnaby to cut. He gets to commit to an unaccountable target 30 years from now and in return he asks for immediate benefits.”
It’s not good enough, Merzian says.
The IPCC is saying we need to focus not on 30 years from now but on the next 10. (Clearly we’ve already chewed up nearly a year of that).
Australia won’t get any pats on the back for getting net zero across the line by 2050 when it goes to Glasgow, Merzian says.
Morrison needs to double Australia’s commitment to slash emissions to 2030 – currently we’re targeting just 26 per cent on 2005 numbers – in line with what the other major countries are doing. The UK has signalled 68 per cent by 2030.
The pressure will be significant. “Our allies are calling on us to take immediate action, not obfuscate over long term unaccountable targets.”
What’s a realistic number we should aim for?
Wrong question, Merzian says. The correct question is what does the science require? And the answer to that is twice the reduction we’re planning now by 2030. So 50 per cent, at least.
His view is echoed by people deep inside the climate wars and on the edges – the property sector for instance. Leaders there have started to call not for net zero but for negative carbon. We need to abate and we need to draw down, they say.
John Connor who’s chief executive of the Carbon Markets Institute says we need a plan for decarbonisation, but what’s critically important is that “it should not be a fig leaf”.
“The IPCC report brought home the need decarbonise as well as draw down and both as quickly as possible. and critically need to be negative [in carbon]”.
“So far, it’s been a smokescreen for inaction but there have been slow advances in the last decade or so.
“There’s a lot of work that needs to be done, in agriculture and regional Australia.”
In the industrial space, Connor says, there is emerging but still expensive technologies such as direct air capture that are proving we can pull carbon out of the atmosphere and convert it to fuels and other products such as cement and even vodka (we kid you not).
These things need to be worked on and developed and funded. They’re expensive, but you’d think that alone makes them attractive for the potential profit generation.
“We need to be stronger in ambition but what Morrison needs to do is speak more to the opportunities that are there.”
Merzian points to the vast difference in attitude between the states, who get it – even and most prominently the Liberal states – and the feds.
But there’s change, says Beyond Zero Emissions boss Heidi Lee, who’s been playing the long game in winning over influencers in federal government circles to support and focus on the opportunities for major economic reform that set Australia up globally as a winner, not a loser in the carbon transition.
She says her team and other advocates are starting to get traction in Canberra.
They’re making the case that Australia needs to build skills, jobs and resilience through new manufacturing streams that can deliver what the world’s looking for in decarbonisation.
In recent times Lee says, government ministers, especially those from the regions, have been increasingly open to ideas. She’s tight lipped about who exactly, but doesn’t mind sharing that BZE’s plans for a renewable development zone at Gladstone in North Queensland have been publicly endorsed by federal member for Flynn Ken O’Dowd.
Another similar plan has been developed for the Hunter Valley in NSW and both have been favourably reviewed by consultancy ACIL Allen here:
“Our five main trading partners have committed to net zero and these jobs [in the regions] are now really vulnerable,” she says.
“When you talk about the cost and the process, it’s not just cost it’s economic reform and like any economic reform there will be winners and losers.”
We need to start meeting the demands of decarbonising world and there are plenty of opportunities in Australia.
“We can start making those things here,” she says. Instead of exporting “rocks” we can start to process minerals here. “We might be making heat pumps for everyone’s home”.
But while there’s loads of attention on the big burly plans from people such as mining magnate Twiggy Forrest for green steel and hydrogen and so on, which is all great, Lee says, the big political and economic spotlight should be more on local regional interventions where the ordinary jobs in coal can be turned into something that will meet the growing appetite for transition goods and services.
The carbon issue
Part of the economic story is we need to resolve the “carbon tax” issue and get the right carbon market mechanisms in place, many of which are still there, John Connor says.
We need to start recognising we have carbon pricing and carbon markets in Australia;
“They’re remnants of the removal of the Gillard [government] pricing mechanism, but we have the structures there. It’s an evolution not a revolution. And we need to get back in the game. We have the tools like the safeguard mechanisms which can take over from what’s been largely the government which has been the main buyer of carbon through the Emissions Reduction Fund.
We can drive a decarbonisation transition that allows us to build up industry and to sequester carbon through pathways such as industrial and biological.
But right now, he says, we’ve got this “phoney war” of whether we call it carbon pricing or not, he says. But the $2 billion spent on the carbon reduction fund is public money, right?
And the difference to a carbon tax is…?
As if we can avoid a tax anyway.
The carbon border adjustments or global carbon taxes are now being imposed not just in Europe but in places such as Japan, South Korea and the US.
“This is very important but what’s snuck up on people is global capital movements: countries who don’t have coherent decarbonisation policies are beginning to be seen as a risk.”
This is something that Morrison has to be aware of and which will activate him, Connor says.
Economic writer Alan Kohler in the New Daily says the clear and brutal fact is that climate change is going to be hugely expensive if we act now, and probably more if we don’t.
He’s calling for a Churchillian “whatever it takes” approach and says it’s inevitable that we’ll need a “massive expansion of the public sector, very large budget deficits and an even bigger rise in government debt than we’ve ever seen, including in wartime”.
The scope of work is now well beyond anything the private sector can do, he says, in particular because there is an entire coal industry to shut down.
Indeed, a Churchillian task.
But with the latest IPCC report, one we have to embark on with speed and with the federal government in front – and everyone else by our side.