Finance Alan Kohler: Australia’s expensive climate change double whammy
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Alan Kohler: Australia’s expensive climate change double whammy

alan kohler climate change
There is nothing to be done on energy other than go deeper into the red, writes Alan Kohler. Photo: TND
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On Thursday last week – June 30 – two documents were published here and in Washington DC that together present Australia with a horrible, very expensive problem.

They were the Australian Energy Market Operator’s new Integrated System Plan and the US Supreme Court’s decision in West Virginia versus the Environmental Protection Agency.

In essence the two documents tell us that Australia will fork out hundreds of billions of dollars to transition the electricity system to near-100 per cent renewables to no avail, and we’ll end up paying even more to deal with the effects of global warming.

With slightly more than one per cent of the world’s greenhouse gas emissions, Australia’s commitment to have net-zero emissions by 2050 has always just been a matter of us doing our part of the global effort – as we should.

But that global effort is in tatters because the Supreme Court has taken America out of the game. Keeping global warming to less than 1.5 degrees above pre-industrial temperatures, and therefore something less than catastrophic, now looks impossible.

That means it is now more important for the Albanese government to develop strategies and allocate funds to deal with impact of climate change than it is to cut emissions, as promised, by 43 per cent by 2030 and to net zero by 2050, as important as those targets still are politically and morally.

It’s now likely that both costs will have to be paid.

US climate precedent

The US Supreme Court has gutted the Environmental Protection Agency’s ability to reduce greenhouse gas emissions.

It was the latest in a long line of setbacks for the Biden administration’s effort to meet its emissions-reduction targets, driven by the Republican Party, in turn supported and funded by the fossil fuel industry.

The US is the world’s second-biggest emitter, accounting for 14 per cent of the total, but it’s not just about those emissions, as significant as they are.

fossil fuel
Electricity generation, as at this coal-fired plant, is second only to transport in terms of US greenhouse gas emissions. Photo: Getty

If conservative politicians and fossil fuel companies manage to block America’s transition to renewables using the stacked Supreme Court, as seems to be happening, a lot of other countries will decide there’s not much point damaging their own economies to meet Paris emissions targets; they might as well keep the band playing on the Titanic.

Last week’s judgment in West Virginia v the EPA was the result of a multi-year strategy by Republicans and their donors, mostly with ties to the fossil fuel industry, to use the courts to block America’s efforts to tackle global warming.

In that respect it’s similar to the Supreme Court’s overturning of Roe v Wade, which was the result of decades of planning by Republicans to use the court for political ends, culminating in President Trump appointing three new judges and creating a clear conservative majority on the court.

In a way, climate change has become collateral damage to the American abortion argument.

In last week’s case, West Virginia’s attorney general has succeeded in stopping any attempt by the EPA to tighten restrictions on carbon dioxide emissions from electricity generators, and also potentially blocks any limits the Biden administration puts on exhaust emissions from cars and trucks and on methane emissions from oil and gas plants.

It is one of a string of cases around the country being brought by Republican state attorneys general, supported by the fossil fuel industry, to give the power to decide climate change issues to Congress.

But Congress is powerless on this issue as well. The key part of President Biden’s climate action plan – new laws to replace coal and gas power stations with solar, wind and nuclear energy – had to be deleted from Biden’s big landmark policy bill last year because Senator Joe Manchin, a Democrat from West Virginia, said he’d vote against it.

President Biden said last week’s Supreme Court ruling was “another devastating decision that aims to take our country backwards”.

Full steam ahead on renewables

Australia, meanwhile, is going full steam ahead with renewable energy – not so much because of government action, although state governments are definitely part of it and the federal government is now stepping it up under Labor, but because of the massive growth in rooftop solar and the failures of coal-fired generators as a result of years of under-investment because of policy inertia.

AEMO’s Integrated System Plan issued on Thursday lays out how it sees the Australian transition to renewables taking place. Bottom line – it’s “accelerating and irreversible” and will cost $320 billion, according to other estimates.

The scale of the investment required is staggering: The main grid is expected to go from 30 per cent renewables to 83 per cent by the end of this decade, and then 98 per cent by 2050.

A maintenance person uses a ladder and harnesses to install equipment around a Solar panel array on the roof of a house
There has been a massive uptake in rooftop solar as energy costs soar. Photo: Getty

The scenario envisages a five-fold increase in rooftop solar by 2030, which will provide twice as much power as coal by then, with nine times as large-scale renewable capacity and three times as much storage, much of it household batteries.

The transition will require 10,000 kilometres of new transmission lines to where solar and wind farms are built, because they are almost entirely in different parts of the country to when the coal-fired generators are now.

So Australia’s government budgets – and therefore taxpayers – are going to be hit with the greatest double whammy imaginable: A massively expensive “irreversible” transition to renewable energy plus massively expensive floods, fires and cyclones, because our renewable transition will make no difference to global warming.

And these are budgets that are already deep in the red, firstly because of the pandemic and now increasingly because of the demands of disability, aged care, health care and defence.

What’s to be done? There is no alternative: Go deeper, and longer, into the red.

Alan Kohler writes twice a week for The New Daily. He is also editor in chief of Eureka Report and finance presenter on ABC news