Inconvenient truths for PM big on promises

Inconvenient truths for PM big on promises Keith Orchison BEHIND the hype of the Garnaut Report and the Rudd Government's carbon emissions green paper lie some very inconvenient facts. First: a carbon system applied as now proposed will barely make a dent in the growth of Australia's greenhouse gas emissions between now and 2020; it will not deliver a cut in emissions below today's levels, let alone below 2000 levels. Rudd is caught here by the Howard interest rate trap: it was not what the former prime minister said about interest rates under a Coalition government that mattered, it was what the voters thought he said, and when the rates rose again and again they punished him. In Rudd's case, he has led the voters to believe he is going to deliver relief from global warming or, at the very least, a world-leading Australian example of how this can be achieved - and he can't. He can't, first, because no matter what is done here, the key impact of human-sourced greenhouse gases on the environment will be delivered elsewhere. Second, because delivering a massive cut in Australian domestic emissions through very high energy prices will make a slaughterhouse of the local manufacturing sector and deliver more than a million direct jobs, and perhaps as many indirect ones, to the block. Nor can Rudd escape the political cost of undermining manufacturing by relying on the ongoing minerals and energy boom, heavily based on Chinese and other Asian demand for our resources, to be the key prop of the economy. As the eminent American economist, Jeffrey Sachs, at present visiting Australia, points out, countries over-reliant on exporting natural resources rarely show much economic growth. The most inconvenient fact of all is to be found elsewhere: in China, where the direction of the global concentration of greenhouse gas emissions in the atmosphere during the next few decades is already being decided. China is matched by only the US in the size of its emissions. The growth of US emissions has slowed this decade, but the growth of Chinese emissions has been, and is going to continue to be, enormous. In this country, activists obsess over each new coal mine or coal-fired power station as if it signals the end of our world, but the Chinese are duplicating our entire coal-fired power capacity every four or five months. China added 88,300MW of new coal-fired generation in 2007. Australia's total grid-connected power capacity is 48,200MW, of which 28,500MW is coal fired. The Chinese, to quote a paper delivered to the Asia Clean Energy Conference in Manila in June by Jianxiong Mao of Tsinghua University, Beijing, intend to build another 500,000MW between 2010 and 2020 while closing 4000 of their small, very inefficient coal plants. This program includes developing 120,000MW of renewable energy - four times what the Rudd Government's mandatory clean energy target aims to achieve - but 60 per cent of the new capacity will be coal-fired generation, their gases alone each year adding more than Australia's emissions from all sources to the atmosphere. The Chinese have on order 200 coal-powered units as big as the dozen largest in use in NSW and 16 units bigger than the 750MW plant, Australia's largest, just commissioned in Queensland. This represents some $700 billion worth of equipment orders and barely half of what will be needed to meet Chinese 2020 capacity targets. Because global warming is above all else a global issue, where the total of greenhouse gases in the planetary atmosphere decides what happens, even a suicidal decision in Australia to scrap all coal burners in the interests of showing the world a lead - cutting emissions by 180 million tonnes a year - would have no impact in the face of what the Chinese alone have already decided to do. Moreover, the Chinese, contrary to myth, are not doing nothing about emissions: they are engaged in a massive modernisation program that will improve their carbon intensity, but it will nonetheless add huge amounts of gases to the atmosphere. Which leads to the question: what is Australia trying to achieve? When Sachs tried very politely on ABC Television this month to make the point that effective action requires first deciding on your target, then working out how to reach it most efficiently, he was, to quote a subsequent ABC Radio news report, "dismissed" by federal Government sources. There is a raft of things Australia can, and should, do to deal better with its own greenhouse gas emission levels. An effective, regulation-driven approach to end-use efficiency is one. This month McKinsey & Company have released a study showing how the world can halve energy demand by spending about $US170 billion ($175 billion) a year. Adequately promoting effective large-scale non-emitting generation - geothermal in the short-to-medium term, perhaps solar thermal (baseload power, not rooftop solar cells) in the medium-to-long term - is another step that should be given greater prominence here. Spending big (and it will cost billions, not tens of millions) on cleaner coal generation technology and capture and disposal of carbon dioxide is important. As well, given the major upward trend in emissions as a result of Chinese and other developing nation activity, a serious adaptation plan for the long-term effects of global warming would seem sensible, too. It is necessary to adjust (and increase) the taxation system to fund these initiatives, which require large-scale community support as well as private investment, but this should be done in a straightforward and transparent fashion, not by inventing one of the world's most convoluted regulatory systems and myriad ways to avert its worst impacts by providing "get out of jail" cards to special interests while buying off voter rage through exempting petrol. If there is one thing that is crystal clear after a week of the Garnaut Report, his "town hall meetings" and the green paper, it is that the Rudd Government is already knee-deep in a swamp of its own making on carbon policy, and deaf to advice to stop wading. Keith Orchison was chief of the Electricity Supply Association for 12 years and a member of the Howard government critical infrastructure advisory council 2003