Coal’s demise brings a host of tough, new challenges
In 1865, renowned British economist William Stanley Jevons wrote a seminal book about his nation’s reliance on coal. “In truth [it] stands not beside but entirely above all other commodities,” he wrote. “It is the material energy of the country … the factor in everything we do. With coal almost any feat is possible or easy; without it we are thrown back into the laborious poverty of early times.”
For more than 250 years, the industrial and domestic life of the modern world has been largely powered by an abundant and cheap supply of coal. It is somewhat paradoxical then that the very life of the planet has now become reliant on ending coal’s long reign.
As The Age’s national environment and climate editor Nick O’Malley reported over the weekend, there is a rapidly growing global movement to put the brakes on the coal industry as soon as possible in a desperate attempt to slow the warming of the planet.
Climate experts are hoping that this new push will culminate in world leaders agreeing to support an announcement before or during the COP26 global climate talks in Glasgow in November to rapidly phase out coal-fired power. The cost, complexity and contradictory forces at play make it a challenge on a scale the world has rarely faced.
China is the most obvious example. While it announced last week that it would follow in the footsteps of Japan and South Korea in pulling the plug on bank-rolling new coal-fired power plants abroad, its own voracious need for power to buttress its economic rise means it’s not planning to start winding back its own reliance on coal for many years to come. That is reflected in the price of thermal coal, which has skyrocketed this year due to a resurgence in demand from the likes of China and India.
Australia is facing its own divergent pressures. The industry employs about 40,000 workers and coal exports bring in $50 billion a year, with royalties lining the coffers of state and federal governments at a time when enormous debt levels are being racked up to contain COVID-19.
At the same time, the market value of coal-fired power stations is being slashed by the plummeting price of wholesale electricity prices, triggered by the expanding renewable energy sector and the popularity of domestic rooftop solar panels. This is resulting in electricity companies fast-tracking the closure of coal-fired plants.
As Treasurer Josh Frydenberg pointed out last week, the business community and markets are increasingly making decisions that reflect the need for a transition to lower carbon emissions. What he was not so frank about was the Coalition’s lack of political will to tackle areas that the markets cannot determine. Its “technology not taxes” approach is just not enough.
The to-do list is substantial. The closure of local coal-fired plants must be supported by putting in place the infrastructure and incentives to ensure enough renewable energy comes online to guarantee supply. Coal miners must be given employment pathways out of the industry. Australia can no longer stand on the sidelines in global efforts to provide developing countries with alternatives to coal-fired power. And ambitious national targets in reaching net zero emissions must be set and then followed through with a suite of regulatory measures to enforce them.
While Mr Frydenberg’s backing of the case to cut greenhouse gas emissions to net zero by 2050 is welcomed, it is really too little, too late. As he said himself, we risk being left behind in a mammoth economic shift that could impose enormous costs on this nation.
The Morrison government desperately needs to move faster. If there is one thing the pandemic has shown, when there is a pervasive threat to the wellbeing of the nation, governments must take the lead and act decisively. That time has come in regard to climate change and the coal industry.
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