The recent ‘Red Book’ briefing by Australian Treasury  to the new Rudd government highlighted the need for a major transformation of the economy if Australia is to effectively deal with climate change.

In the report, obtained by Channel 7 under an FOI application, climate change was described as ‘the single most pressing environmental, economic and social challenge’ facing Australia.

Treasury stated that an effective national response to climate change ‘will entail a major transformation of the economy’ and that ‘If stated emissions reduction objectives are to be achieved, the energy profile of the economy will have to be fundamentally changed, with market-based incentives needing to play a leading role.’

The current 16 year economic boom in Australia is likely to continue for another 2 years according to the Red Book briefing, largely fueled by the rapid growth of China and India and their demand for resources, of which Australia has plenty.

Shift from fossil fuel economy

So what is ‘a major transformation of the economy’ and a ‘fundamental change’ to the nation’s energy profile.

Bottom line is that Australia (and the rest of the world) must substantially reduce its dependence on, and use of, fossil fuel products such as coal, oil and gas, or we will be running enormous, and effectively permanent, risks to the future of  the national economy arising from the impact of climate change.

Fossil fuels have been relatively cheap sources of power for hundreds of years. Our modern way of life, and the global economy, has literally been constructed around the use of fossil fuels. Almost every product and service provided in developed countries is reliant on fossil fuels.  GDP of developed (wealthiest) countries is closely related to their GHG emissions.

Fossil fuels were created by natural processes over hundreds of millions of years, and we are effectively burning it all a million times faster -  over a few hundred years.  That’s like winning the lottery and blowing it all in a few seconds.  We are pumping greenhouse gases (GHGs) into the earth’s biosphere at a rate faster than at any time in the earth’s known history, and certainly in human history. That will almost certainly result in faster and more intense climate change than humans, and probably the planet, have experienced before, and may be beyond our ability to adapt.

Coal fired power

But how does a country such as Australia change its energy paradigm?
One of the obvious areas for change is in the use of coal for generating electricity. Coal fired power represents a significant proportion of Australia’s GHG emissions.
Coal is plentiful and relatively cheap – provided the ‘collateral damage’ to the environment and to the future economy is externalised, i.e. not  taken into account in the financials of the emitter or the end user, and provided the industry is subsidised by the government/taxpayer.

By externalising collateral costs of emissions, emitters (and consumers) avoid paying for the damage caused by their activities. Essentially, we pass the cost on to Mother Nature and to governments. We expect the natural processes of the planet’s systems to absorb and correct any imbalance that we create. Some consequences are paid for by governments, such as health system costs and remediation of ecosystems.
Basically, we are running up a substantial debt to the earth’s biosphere and sooner or later the debt will be called in, by way of perturbation of the climate system which could cause a  substantial impact on our economies and lifestyle, unless we do something soon to stop the current trend.

Subsidies

If the current subsidies to the fossil fuel industry are removed and the coal-sourced energy was saddled with the real cost of carbon, coal-fired power generation would hardly be competitive with renewable energy.

For instance, Government subsidies (read ‘taxpayer support’) have been propping up the fossil fuel industries (oil, coal, gas) in Australia to the tune of between $7 billion and $10 billion a year depending on which source is quoting the figures.  Remove the subsidies and you’ll soon see that the fossil fuel industries are a lot less profitable without the subsidies.  By contrast, the Australian government spent only $232 million for renewables and energy efficiency, and $750 million for alternative fuels during 2005/2006.
Without the subsidies they would have to increase prices or efficiency.  In today’s circumstances that may be useful, as it would lower consumer purchases and reduce the energy used per unit of production.

Add in a carbon tax or emissions trading scheme that has serious teeth and fossil fuels will be far less sustainable economically, making renewable energy sources more economically viable.

Australia is the 4th largest repository of coal deposits and the biggest exporter of coal. Sooner or later, coal exports from Australia and into other countries will be penalised or discouraged as nations reduce their emissions and reliance on fossil fuels in an attempt to avert dangerous climate change.

Moral issue

Knowing what we know now about the impact of GHGs and the risks that we face on a global scale as a result of climate change, there is also a moral question of whether Australia should continue to export coal to China and other countries in the knowledge that the coal will ultimately produce huge amounts of GHGs as China builds a coal-fueled power station each week through to 2020 – another 600 power stations – as it rushes headlong towards a ‘higher’ standard of living.

Australia cannot afford to wait until the coal market collapses. That collapse may take 10 years or 20 years. China won’t need coal forever – it has 200 years of coal buried on it’s own turf.

Australia must act quickly to create the renewable energy capacity that will not only deliver jobs and growth, but will also enable the country to wean itself from fossil fuel energy.

Australia has the innovative capability and the wealth to do that. It could be well on the way to that outcome within 20 years with a smidgen of political will.

How?

Australia is blessed with plentiful supplies of 5 natural sources of renewable energy: wind, solar, waves, currents and geothermal.

If the fossil fuel subsidies are phased out  over the next 12 years and the funds are diverted to building renewable energy capacity,  all major cities in Australia could be obtaining most of their electricity from renewable sources. Base load needs could be accommodated by having some gas fired power stations, which can be brought online quickly when renewable sources are less productive, e.g. a windless, cloudy day. 
If an additional $10Bn per annum (additional to the subsidy diversion) were to be invested by the government into renewables over the next 20 years and private and corporate investment was encouraged by clear policies, Australia would be well on the way to a 60% reduction in GHG emissions.

It seems that the US Congress is thinking the same way. Recently, Speaker of the House, Nancy Pelosi, sent a letter to Vice President Dick Cheney in relation to his pending visit to the Middle East. Part of the letter reads:

“The House of Representatives has again passed legislation to significantly expand our renewable American energy industry in a fiscally responsible way, paid for by ending taxpayer subsidies to the five largest oil companies which are earning record profits. This legislation is pending in the Senate. These subsidies cannot be condoned at today’s historically high oil prices. When oil was just $55 a barrel–half the current price–the President said that such subsidies could no longer be justified. We agree and hope he will actively support this legislation to direct our energy dollars from subsidies for oil companies to development of alternatives to increase our energy independence and improve our national security.”

It was worth a try, but Ms Pelosi may have to wait until the next President is elected to get any movement on that initiative.

By Christo Norden-Powers  ©2008 Spandah

What a simple idea is Earth Hour. Once a year at the end of March, we turn off the lights and  appliances for an hour and live a simpler, perhaps more romantic existence for a short while.

Last year, when Earth Hour began in Sydney, who would have thought that 12 months later 150 million people around the world would have joined the movement for the March 2008 Earth Hour It demonstrates the power of an idea and the interest that people have in doing something positive about climate change..

In 2007, in Sydney alone, where most of the electricity is generated by coal fired power stations, that hour reduced CO2 emissions by the equivalent of 48,000 cars being taken off the road. Rough guess is that in 2008, worldwide, that figure was around 1.4 billion cars.

After the Earth Hour in March 2007, I went to the local supermarket to buy some groceries. At the cash register I commented to the cashier “I suppose you had to keep your lights on to trade”. She replied that they turned half the lights off for two hours instead of all the lights for one hour, and that half the lights were still off, as it was not yet 10 p.m.

I looked back into the store, and said “I wouldn’t have thought that half the lights are off. It looks normal and I had no trouble seeing the shelves when I was pushing the trolley”. The cashier said  ‘It made little difference to visibility. No one noticed”.

The store has such an intense amount of lighting that beyond a certain point, the extra lights made little difference to the ability of people to work or shop there. Basically, half of the lights in the store are a total waste of electricity and money – and a totally unnecessary source of CO2.

I then paid attention to the lights in shops at the big shopping malls such as Westfield. Every shop had a downlight embedded in every square metre of the ceiling, and many had lights on shelves and other locations in addition to the ceiling. Why? To light up the merchandise. It seems to be a standard part of the design of shops that lights are everywhere. Frankly, I find that appalling in the age when we are facing a climate disaster.

The simple answer if to light stores with renewable energy.

Commercial buildings could take a leaf out of Wal-Mart’s book in the USA. Wal-Mart is the USA’s (and world’s) biggest retailer, with over 1600 stores. They now have a strategy for fitting their stores with solar panels to deliver power to the stores. They are building experimental stores to cut greenhouse emissions. And they are saving big bucks. One very simple cost saving and GHG-saving idea was to remove the lights from the drink dispensing machines located in each store’s staff lunch room. The lights in the room allowed staff to see whether they were buying a Coke or a Pepsi, so some one figured that the lights in the machines were not essential. In fact, they were a waste. They removed the drink machine lights. The annual cost savings from that single idea was $1 million.  And reduced their carbon footprint by around 4,000 tonnes.

Shareholders of the world unite! How many companies in which you or your investment fund or pension/superannuation fund hold shares leave lights blazing all night, 7 days a week, when no one is in the building. Makes the city look pretty. And it’s killing us. And killing profits. That money goes to the utility corporations or governments that own the utilities, and the vast majority of lights are burning energy that creates CO2.  All for nothing.

Every business on this planet could save money by cutting unnecessary power usage and put that money to better use!.

Let me know what your company is doing about it. If your company isn’t doing anything to reduce its emissions, organise a group of interested people and management tomorrow and start finding ways to save costs. Then get the company to put those savings back into renewable energy sources for power (solar panels, small wind turbines etc) and into more efficient appliances. Then look for ways to trade your carbon savings.

It’s good training for when the Emissions Trading regime comes into effect ( see blog Jan 30).

by Christo Norden-Powers  ©2008 Spandah