2018 Bob Carter Commemorative Lecture — Australian Environment Foundation, 3 July 2018
It takes character to do what’s right and it takes courage to disagree with your peers. On this score, Bob Carter was a good and brave man whose memory we should honour and whose example we should strive to emulate.
As Professor Carter found, and later his James Cook University colleague Peter Ridd also, this is an age that enthusiastically promotes social diversity but often demands intellectual conformity.
Both never let the desire for status impede the search for truth.
As Bob told MPs in 2015, “science does not operate by consensus….it is often best progressed by mavericks”. And as he pointed out in his book, Climate: The Counter Consensus, sometimes, we need to “trust authority less and our own brains more”.
….So….what could be a more fitting occasion for scepticism about green religion and its policy ramifications than an address in Professor Carter’s honour?
In Roman times, grapes were grown in northern England. In the middle ages, crops were grown in Greenland. And in the 17th century, ice fairs were held in London on the frozen River Thames.
So climate change is real alright. For me, the issue has always been: what role does man play, is carbon dioxide the key climate factor, and what might best be done to deal with it?
In government, I thought that we should be prepared to pay up to a billion dollars a year to cut emissions, through the taxpayer-funded emissions reduction fund.
I never thought that we should have to pay the $10 billion or so that Labor collected through the carbon tax. That’s why my government abolished it and in so doing delivered an immediate cut in electricity bills of 10 per cent.
My government set a 2030 emissions reduction target on the basis that this was more-or-less what could be achieved without new government programmes and without new costs on the economy.
There was no advice then to the effect that it would take a Clean Energy Target or a National Energy Guarantee to get there.
Our intention, then, was to monitor developments; and, in the meantime, to rely on market forces to make energy use efficient, and on the emissions reduction fund to keep overall emissions heading down at the lowest possible cost.
My government never put emissions reduction ahead of the wellbeing of families and the prosperity of industries. As I’ve said all along, you don’t improve the environment by damaging the economy.
I have never thought that reducing emissions should be a fundamental goal of policy, just something that’s worth doing if the cost is modest.
I have never thought that climate change was, to quote Kevin Rudd, the “great moral challenge of our generation”.
It was an issue, that’s all, and – at least on the actual changes we’ve so far seen – not a very significant one compared to man’s inhumanity to man; maintaining and improving living standards; and even to many other environmental issues such as degraded bush and waterways, particulate pollution, water quality in the third world, deforestation, and urban overcrowding.
After all, the increase in atmospheric carbon dioxide from roughly 300 to 400 parts per million over the last century has not had dramatic consequences. Storms are not more severe; droughts are not more prolonged; floods are not greater; and fires are not more intense than a century ago – despite hyperventilating reportage and over-the-top claims from Green politicians.
Sea levels have hardly risen and temperatures are still below those of the medieval warm period. Over time, temperature change seems to correlate rather more with sun spot activity than with carbon dioxide levels.
And even if carbon dioxide, a naturally occurring trace gas that’s necessary for life, really is the main climate change villain, Australia’s contribution to mankind’s emissions is scarcely more than one per cent.
Of course, we should treat the planet with respect as it’s the only one we’ve got. But it would the height of folly to suppress living standards, to shrink industries and to drive jobs (and their emissions) offshore…for what was merely a moral gesture.
Yes, egged on by media scare stories and attention-seeking academics, the public are inclined to believe that something is happening to climate…and that something needs to be done – but our children won’t thank us when their power bills keep soaring and their jobs keep going offshore in a futile bid to make the world imperceptibly cooler for our grandchildren.
There have been four big developments since my time as PM.
Post the carbon tax repeal, power prices have quickly resumed their inexorable rise, and have now doubled in a decade.
Gas prices have increased almost as much and – with too much of our gas under export contract and green bans on new exploration and extraction – that’s made the power squeeze worse.
Selective blackouts have become relatively common, with most of South Australia going dark for 24 hours because the wind blew too hard and the interconnector went down.
This bitter experience of expensive-and-unreliable power driving out of the system cheap-and-reliable power, and making it dangerously unstable, had it occurred earlier, would have made the Renewable Energy Target much more renegotiable – perhaps to the point of abolishing all subsidies for new wind farms.
And fourth, the biggest change, America has withdrawn from the Paris agreement.
When the world’s leading country withdraws, it can hardly be business as usual. Our 2015 target, after all, was set on the basis that the agreement would be “applicable to all…parties”. Absent America, my government would not have signed up to the Paris treaty, certainly not with the current target.
What wasn’t widely grasped, even then, is the impact of emissions policy on economic outcomes. Reducing emissions may or may not change the climate ever-so-slightly decades hence, but it sure has consequences for the way we live now.
Sure, we can substantially reduce emissions – but if we do – we can’t expect power prices not to rise and we can’t expect energy intensive industries not to close.
Sure, we can favour renewable energy – but don’t expect energy that’s cheap while it’s there not to drive out energy that’s there all the time…unless a strong reliability requirement is placed on it.
As the business leaders in Canberra last week to discuss energy policy made crystal clear, we cannot go on as we are.
A few weeks back, high demand on cold days, next-to-no renewable energy, and planned and unplanned outages in ageing NSW power plants meant that the wholesale power price spiked to $14,000 a megawatt-hour and the Tomago aluminium smelter was forced to stop three times in a week.
As the Tomago head said, you can’t run a smelter on weather dependent power, and you can’t run one on base-load gas either because it’s too expensive.
But this is our future – under the National Energy Guarantee – because the emissions reduction requirement means more wind and less coal; and the reliability requirement means more gas and more “demand management”.
This is the predicament we’re in because successive governments have claimed to help the planet by subsidising renewable energy and by imposing emissions reduction targets.
So now we want even more renewable energy – up from 23 per cent to perhaps 36; as well as even higher emissions reduction targets.
Isn’t one of the definitions of insanity doing the same thing and expecting a different result?
One of the most important laws of politics is: beware the unintended consequences of what seems-like-a-good-idea-at-the-time.
I’m not sure that the Howard government fully anticipated where the renewable energy target would lead when it first made the decision to impose one.
I certainly didn’t anticipate, as prime minister, how the aspirational targets we agreed to at Paris would, in different hands, become binding commitments.
I didn’t anticipate how agreeing to emissions that were 26 per cent lower in 2030 than in 2005 would subsequently become a linear progression of roughly equal cuts every year over the next decade.
But now that we are more alive to all the consequences of combining energy policy with emissions policy – and now that we do understand that this will define our economy for decades to come – there is no excuse for getting it wrong again.
If we surrender our main comparative economic advantage, cheap power, in what turns out to be a mere gesture because total emissions keep increasing and other countries have either made no commitments to cuts or don’t keep them – future generations will judge this one very harshly indeed.
If the country with the world’s largest readily available reserves of coal, gas and uranium continues to inflict on itself some of the world’s highest power prices, future generations will surely shake their heads in perplexity at such deliberate self-harm.