Richard Denniss: Whatever happened to just in case?


Photo of Richard Denniss
Director of the Australia Institute Richard Denniss spoke at the Bermagui Institute dinner in February 2015

The world’s sluggish response to climate change is a mystery to many. After all, overwhelming evidence of a problem usually results in mitigation of the problem. Witness the global response when scientists suggested in the 1990s that chlorofluorocarbons (CFCs) might be busting a hole in the ozone layer, leading to high rates of skin cancer, amongst other consequences. The reaction was swift; CFCs were banned from aerosol cans. In America, consumers voluntarily switched away from aerosol sprays, resulting in a 50% loss in sales even before legislation was enforced.

Economist Dr Richard Denniss was the speaker at the Bermagui Institute Public Dinner at the Bermagui Hotel on 19 February. The topic: Does Tackling Climate Change Really Mean Harming the Economy?

‘In Australia,’ he said, ‘we’re typically a conservative bunch. We don’t think twice about insuring our house, when the risk of it burning down in any given year is about one in 10 000.’

At a national level, ‘we’re looking at spending $50 billion on 12 submarines to replace six that we haven’t even used yet.

Globally, ‘Twenty trillion dollars was spent on the [Global Financial Crisis]. If you’d asked the Finance Ministers if it was going to work, they would have told you, “We just don’t know, but we have to do something!”‘

That’s called the Precautionary Principle. Putting measures into effect just in case.

‘So,’ asks Denniss, ‘why aren’t we listening to 90% of the world’s climate scientists,’ when we were so quick to take action on the ozone layer in the 1990s?

CFC manufacturers were not a powerful lobby group. Coal companies are, and they can afford to muddy the waters with misinformation.

Well-moneyed interest groups have put forward economic reasons not to act against climate change. Specifically, they say that if renewable energy sources replace fossil fuels, jobs will be lost and the cost of electricity will rise. But, says Denniss, where’s the evidence?

With all the talk of job losses, many will be surprised to learn that, said Denniss, ‘The latest figures from the [Australian Bureau of Statistics] have 42,900 full-time and part-time workers in coal mining across the country, or 0.37% of Australia’s workforce.’ Over the decade from 1985, when coal-mining in the Hunter Valley moved from underground to open-cut processing, companies sacked half their workforce and replaced them with machinery.

‘There are 13,300 people employed installing solar electricity, compared with 8,081 jobs in coal- and gas-fired electricity combined,’ said Denniss. Clearly, the Electrical Trades Union is not concerned about renewables; there will always be jobs for electrical workers, whether the fuel is coal or solar.

And, far from driving costs up, use of wind and solar power and the fall in energy demand have driven down the wholesale cost of coal-fired power.

Retail costs to consumers have still gone up, because the amount of power used represents a small portion (about 20%) of the average electricity bill. As Australians have reduced their power needs, due to more efficient appliances and the massive uptake of solar, amongst other factors, electricity companies have had to raise their service charges to maintain profits. Electricity bills have roughly doubled since 2009, and over half of that increase has been in the service charges.

In a retrograde move, the Australian coal industry is aiming to double Australia’s current output of 250 million tonnes per year. The current low price has stalled many new coalmine projects for now. But with India’s focus on solar-powered micro-grids to service its vast rural population, and China ramping up nuclear, wind and solar power to address both climate change and pollution, will there be a market for all that extra coal in the future? Any infrastructure being built now on the promise of future mountains of coal exports is in danger of becoming stranded assets down the line.

What we need instead is forward thinking, free of vested, short term interests.

First published in The Triangle community newspaper, March 2015

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