Arguments
Mitigation in Australia
Posted on 22 November 2016 by Riduna
Need to Curb Emissions
If we continue to increase greenhouse gas emissions at the current rate average global temperature could rise 1.5°C above the pre-industrial within a decade and 2°C by 2040. A rise of 2°C is likely to produce an increasingly dangerous climate which could make some parts of the world uninhabitable, accelerate ice melt and sea level rise and threaten our ability to feed a growing global population. And now, some climate scientists are debating the possibility of a 3°C rise before 2100. That would prove catastrophic.
If we wish to avoid scenarios where populations are driven from their homes by flood or starve because of drought or deluge producing crop failures, it is imperative that we avoid a rise of 2°C this century. The chances of our achieving this by replacing combustion of fossil fuels with clean energy source – and achieving this in a timely manner – are rapidly diminishing, given that average global temperature is already 1.3°C above the pre-industrial.
The current level of anthropogenic greenhouse gas emissions and the rate at which they continue to rise makes it imperative that they be reduced. To this end, technologies have been developed by the more advanced economies which can reduce demand for energy, significantly speeding up the rate at which we can reduce fossil fuel use. These ‘mitigating’ technologies are continually being improved and in the European Union and North America have been deployed to great effect. Yet in Australia, their use is at best disorganized, lacks uniformity at National or State level and at a local level is at best tokenistic or does not occur at all.
Fig. 1. Comparison between atmospheric concentration of CH4 and CO2 over the last 400,000 years and their effects on average global temperature to 2013. Source: R.Morrison, Wikipedia.
Mitigation calls for action which reduces anthropogenic greenhouse gas emissions, particularly Carbon Dioxide (CO2) and Methane (CH4) which, as shown in Fig. 1, are now at their highest levels in over 400,000 years. If these emissions are not curbed and reduced to zero by about 2050, the prospects of keeping average global temperature below 2C above the preindustrial this century become negligible.
Reducing these emissions can be achieved, primarily by reducing demand for fossil fuelled energy generation and by replacing use of fossil fuels with clean renewable energy sources.
If left to the private sector alone, it is unlikely that reduction in demand for energy produced by burning fossil fuels, or its more efficient use, would be achieved with the speed required to effectively slow average global temperature rise. One of the reasons for this is that existing businesses have invested, often heavily, in technology which no longer produces or uses energy efficiently. They are slow to abandon old technology before their outlay in it has been recovered or its continued use is no longer commercially viable.
Mitigation Measures
It therefore falls on the public sector to lead the way through legislation, by setting a good example demonstrating greater profitability to be had from using the latest technology and, in other ways, promoting the transition away from fossil fuels. Twelve basic ways of achieving this are:
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Mitigating Action |
Comment |
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1. Revise Building Codes to provide that new dwellings must have (a) energy saving insulation, (b) solar hot water, (c) photovoltaic panels, or (d) LED lighting and (e) an energy rating whenever sold. |
The argument against revising building codes is that it would increase the price of housing, already too costly for aspiring first home owners. However, it also reduces electricity needs saving owners money, increases property resale value and assists purchasers to identify best buys. |
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2. Provide LED lighting for all street lights, other external public lighting and interior lighting of all publicly owned premises, including the premises of businesses owned or partly owned by government. |
Use of LED lighting is more durable, reduces electricity consumption and its cost by 50%-80%, reducing consumption of coal fired energy, carbon emissions and operating cost to commercial consumers and the public sector. |
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3. Actively encourage private sector use of LED lighting and increase sales tax on all other forms of less efficient lighting to discourage their on-going use. |
As above |
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4. Encourage use of electric and hybrid plug-in vehicles by offering (a) concessions on registration, (b) assisting provision of charging facilities and (c) offering concessional parking fees. |
These forms of encouragement are needed until the range of EV’s exceeds that of internal combustion engine cars, and their price is much more competitive – probably by 2020. EV’s with a range of >300 km, priced at $30,000 are already available and improvements on range and price will occur as battery prices continue to fall. |
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5. Equip public sector car fleets with electric and hybrid-plug in vehicles as fossil fuelled vehicles have to be replaced. |
Most Government vehicles are used for journeys within the city in which they are located and can be made by existing plug in EV’s or in the case of longer journeys, by plug-in hybrids, reducing carbon emissions and operating costs. Were government fleets to replace fossil fuelled vehicles with EV’s, this could increase public demand and use of EV’s, lower their price, promote their use in business fleets and by households. |
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6. Use PV panels to provide off-grid electricity to help meet public sector requirements and sale of surplus to the grid. |
State and Local government use of PV to generate electricity is very low and its storage for meeting grid demand is presently non existent. Yet these measures could significantly reduce cost of energy and the Budget bottom line in the public sector and lower the need to generate it by burning fossil fuels. PV technology has been available for a decade yet public sector uptake, particularly at Local Government level remains very low. |
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7. Legislate on a National or State basis to provide for uniform classification of all electrical appliances sold in Australia with stars to indicate efficiency in use of electricity. |
A System already exists but is neither legislated for or regulated by government. It could be improved by taxing least efficient rated appliances, thereby encouraging production and sale of the most efficient appliances. |
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8. Support tree planting to ensure that new plantings exceed loss of trees due to land clearing, harvesting and natural loss. |
Land clearing and tree harvesting exceeds planting, reducing the carbon sink and increasing the amount of CO2 absorbed by vegetation when the need is to increase absorption. |
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9. Promote recovery of methane and its utilization to generate electricity for use in operation of facilities such as piggeries, sewage processing or sale to the grid. |
Anthropogenic waste, particularly domestic waste consigned to landfill produces methane, largely flowing freely to the atmosphere, This gas is available for generating electricity, reducing local government operating costs and emissions though there has been very little investment in methane recovery. |
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10. Assist replacement of fossil fuelled electricity generation with public/private sector development of renewable generation using the latest technologies. |
Solar power stations are now able to generate electricity at less than 3 cents/kwh, cheaper than generating electricity by any other means and half the price of coal generated electricity, even at current depressed prices for that commodity. Yet State governments have been slow to promote replacement of coal fired power stations with solar and Local governments have ignored this possibility. |
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11. Progressively reduce subsidies and other assistance to the producers of fossil fuels, particularly coal.
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Paying fossil fuel producers subsidies of not less than $1 billion per annum, ultimately to pollute the atmosphere counters public policy aimed at reducing emissions and assisting projects of greater public or national benefit |
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12. Promote commercial development of technology which more efficiently produces, stores and uses electricity. |
The stated intention of Federal Government is to reduce funding for the ARENA Grants program which is primarily responsible for promoting development and commercialisation of carbon mitigating technologies. |
This list is by no means complete – use of low fuel vehicles, the questionable use of charcoal use in agriculture and other measures might be included – but it does include measures which long ago could have been implemented in Australia and other countries in the region.
Coordination and Goals
All of these measures expand economic activity since they create new manufacturing and employment opportunities. They should therefore be attractive, particularly to Premiers and Chief Ministers faced with rising unemployment due to contraction in the mining and manufacturing sectors.
Fig. 2. The National Grid links Northern Queensland with Southern Tasmania, a distance of over 5,000 Km, the longest transmission line in the world. It supplies about 200 terawatt hours of electricity each year to over 9 million businesses and households. Source: National Grid Maps
Jurisdictions connected to the National Grid should be working towards ensuring that the future of fossil fuelled power stations is gradually reduced to providing back-up power for renewable electricity generators. Fossil fuelled generation can then be completely phased out when technology develops cost-efficient larger scale storage of electricity, sufficient to provide security of supply for days rather than hours at present.
Storage capacity of this kind is likely to be available within five years and may be commercially available within a decade permitting wide use. This will enable construction of solar power stations supplying individual towns and cities 24/7 through mini-grids and probably by mid-century, result in abandonment of the National Grid as we now know it and its replacement with self sufficient regional mini-grids.
Transition to clean energy would be accelerated by taking the mitigating activities described above. Several of these activities (particularly 1,2,3, and 6) have the effect of reducing demand for electricity, enabling fossil fueled power stations to reduce their output and enabling closure of those with the highest emissions, thereby reducing national greenhouse gas emissions.
It appears that mitigating action undertaken by jurisdictions served by the National Grid is somewhat limited and needs to be more coordinated. Mitigating actions taken by one jurisdiction potentially affect ability to meet demand for or supply electricity in any or all of the others.
For example: If Queensland decides on a program of rapid conversion of all public lighting to LED, this will significantly reduce consumption and demand for electricity with the result that coal fired power stations in that State will reduce generating capacity, eventuating in closure of the power station with the highest greenhouse gas emissions. This reduces Queensland’s emissions and reduces the cost of public sector lighting in that State by up to 80%. It may also reduce capacity in Queensland to generate a surplus in the event of a spike in demand in New South Wales or other States.
If Victoria implements its policy of reducing greenhouse gas emissions by 40% by 2025 it is likely to involve decommissioning of Hazelwood Power Station, the largest emitter of greenhouse gases in Australia. This may increase Victoria’s dependence on States to its north to provide back-up, not only for Victoria but also for Tasmania and South Australia. Does that capacity exist? Hazelwood may close in 2017.
In summary, inadequate coordination of action by the jurisdictions transitioning from fossil fuel to renewable generation, can leave some without adequate back-up to ensure continuity of supply and may result in less than optimal location or prioritisation of capital investment. A possible candidate for the role of coordinator is a body comprising the jurisdictions served by the National Grid but not dominated by a seemingly ideologically driven Commonwealth.
Equally clear is that State and Commonwealth public sectors have done very little to implement the mitigating measures listed above. For example, States are constrained in the action they can take by Commonwealth regulation of building standards. Yet, until implemented, jurisdictions served by the National Grid have little chance of meeting their commendable emissions reduction targets or weaning themselves off fossil fuels while ensuring reliability of electricity supply.
Finally, it is noted that several jurisdictions, notably the Commonwealth, seek to balance their budgets and, at the same time, increase employment opportunities. Both of these objectives would be significantly assisted by implementing the mitigating activities set out above.
What is missing from today's business economic planning (private or public) is the correct operating cost. Because businesses use an incorrect operating cost (that does not include future CC external costs), when they evaluate project options based on fully distributed cost accounting, they are therefore not picking the most profitable option. If they would use the correct operating cost, then the mitigation efforts listed here would be the most profitable and the economic motivation would be 'naturally' in place to push their implementation.
Businesses mistakenly think that these future external costs are some sort of phantom cost or else costs that they will be able to escape (forever) & let that some other entity shoulder them. What they don't realize is that, no, these costs are not an academic exercise, some phantom number on paper that they, in the real world, won't ever come to ever bear. Wrong! These costs will become real costs, that will show up as real debits, increasingly so, on their balance sheets.
These costs will show up as 1) increased P&C insurance premiums (Property & Casualty damage), and 2) taxes (as military costs rise in order to maintain geo-political stability). For the first one, P&C premium costs are essentially 1:1 equal to the climate impact costs (floods, droughts, storms). To be clear on this statement, the CC impact costs that economists forecast, will show up to the global businesses (1:1) equal to all the P&C insurance costs that are incrementally more than a baseline, after scaling-up for %GDP rise.
One way to make these true operatings costs as immediately transparent & direct as possible (sooner than later) is to implement a carbon tax (inserted at the source). A revenue-neutral carbon tax, where the revenue is equitably re-distributed, is the least burdensome approach economically (link).
All of these mitigation efforts (listed in this article) would fall into place (economically) if businesses (private & public) used the correct operating costs (either voluntarily, unlikely to happen, or involuntarily, carbon tax). Then businesses (& consumers) would do the right (sustainble) thing, because the right thing would be the most profitable thing. The sooner we re-calibrate our thinking to think how business thinks (private & public), i.e. in terms of most profit (& based on correct operating cost, all of it), then the easier it is to talk with them on a common platform and get the business world to see & accept the right, ethical mitigation efforts.
There are solutions that we haven't even dreamt of. If positive-sustainable economics were in place, then investors would be coming out of the wall for R&D to uncover, more & more, better & better solutions; again, all because these R&D efforts would be highly profitable. Again, this is the "talk" , the "language" that moves business (profit), but make sure they understand that they need to use the correct operating cost. They will get it. They will intellectually understand & relate to this, and will also understand that the real costs (not phantom ones) will come to bear sooner or later, and that it is prudently profitable sooner than later to "make the books right".
Therefore, the top thing on the list should be a carbon tax, and then all of this (& more) will start to domino into place. Other approaches may help (subsidies, regulations, etc) & can be included if needed for backup support, but the carbon tax is the most effective means to move us off of status quo & toward the best sustainble solution efforts.
The one break through that we need to make all forms of renewable energy completely practical is energy storage. When we crack that one, the last argument against renewables will crumble and then we will only have vested interests to fight against. They will be defeated by simple economics. Their energy will be more expensive than renewable energy.
Good article. However when you said, "This list is by no means complete" I wonder why you left off the largest of all, BCCS?
Dr. Christine Jones has one answer.
Some more information:
Liquid carbon pathway unrecognised
sauerj @1: I would take issue with you on P & C premiums and taxes as being externalities. They are part of an industry's budget and fully accounted for.
The real externalities, the "phantom" ones and actually far more significant in the present context, are those costs which are borne by individuals, consumers and the public sector in mitigation of the consequences of the industry - industrial blight, waste, emissions and so on. Those are the costs which the budgets ignore but which are increasingly apparent.
william @2: I'm increasingly of the opinion that economic arguments are a bit of a red herring in the context of global warming.
If a denier will not accept the fact of the earth's energy budget then no arguments over the economics of fossil fuel and renewables is going to make headway.
On a statistical basis, insuring your house and contents makes no sense for an individual since he is far more likely to spend tens of thousands over the years on premiums than he is to get back in claims. It's the risk factor that is ignored in that argument, and the same one that's ignored in the warming "debate".
More variable weather, and more storms etc will impact on companies, but whether they insure against this is their business just like fire insurance. They will do it when the risks start to hurt their bottom line.
Given climate change is longer term, compared to the risk of fire for example, this could take some time. However smart companies should be thinking about it, especially where they build factories in relation to sea level for example.
Externalities are different. Companies damaging the environment do indeed cost the public, and so this becomes everyones problem. Companies historically have a poor record of any initiative in resolution of the problem. The only thing that has changed behaviour is government legislation, from bodies like the EPA in the United States. Right now they are the only body doing much, although they often seem to stop short of forcing companies to pay costs. And it appears Trump is determined to undo the EPA if possible.
But who would know. Trump has talked in so many contradictions I give up making sense of it.
However a carbon tax is one method of forcing companies to pay the cost of their polluting relating to climate change. This is certainly economically sound.
A tax on carbon is great, as long as the revenue generated is used to subsidize or develop clean energy. From past experience in Australia, the carbon tax revenue mostly went into building bigger government and subsidizing low income families, as well as tv and media advertising to tell the population how great the carbon tax was.
In a country like Australia with a relatively small population that generates about 1% of global emissions, mitigation measures make us all feel good but can't ever make a measureable impact on the climate at any level.
For that reason, I think it's best to transition sensibly to low carbon generation with a broad environmental focus and with the expectation that emerging technologies will make many of today's green energy solutions obsolete within 20 years.
To that end, a country like Australia might be best served investing in clean energy R&D and putting carbon tax dollars into clean energy projects in developing nations where they'll achieve maximum carbon abatement.
" From past experience in Australia, the carbon tax revenue mostly went into building bigger government and subsidizing low income families",
Ohh, the right-wing deadly sins! And compensating polluters for higher prices, did you mention that?? Terrible thing to try and help people affected by higher energy prices isnt it?
How exactly was government made bigger by the spend in carbox tax?
I prefer pigovian tax myself but seems to me that government was trying to achieve much the same outcome.
Just an update to the article. Hazelwood wont maybe close in 2017, it will close. It is being shutdown at the end of March.
Wol @4 & nigel @6: When I said P&C costs, I meant these sorts of insurance costs to the entire economy. But, your points are valid, in that private business will not bear the direct brunt of the non-industrial portion of these costs; they will in an indirect way, but not a direct way. So, the totality of these costs won't ever show up directly on business (private only) balance sheets.
Another fallacy w/ my thinking is that it is ridiculous to think that an individual business could model true, long-term operating costs for an array of project options based on how each option might impact their future climate change (or operating) costs. Obviously, a single business is way too small for different project options to make a difference to their operating costs due to CC impacts. Total lapse of thinking on my part.
I therefore fall back on the need of carbon taxes to force these operating costs onto private & public endeavors. The tax has to 1) have enough bite to it (high enough operating cost) to make sustainable projects more profitable than non-sustainable options when conducting fully distributed cost evaluations (for either new projects, deciding when to abandon old plants, and for R/D investments), 2) ramped up at a brisk but economically tolerable rate & the ramp rate should be held firm to stablilize business planning, and 3) Be re-distributed in equitable and optimum ways for both economic stability and carbon cessation. Subsidies and regs could be used, if needed, for back-up support; i.e. a multi-prong set of forces.
How about an item #13 to deal with travel, especially long-distance travel?
On the topic of travel, I read today that 92 million barrels per day of oil are consumed globally (mostly for transport I assume). Apparently there is 315kg of co2 per barrel when burned. According to my pretty ordinary maths, this is 3Gt p.a.....the plan is to continue this with a small downward trajectory to 75million bpd in 2050....we have to stop converting the terrestrial C into atmospheric C and start using the abundance of atmospheric C for our fuels, but this needs to be economically rewarded. We must recognise the value of the commons (the commom wealth) in our Commonwealth.