Suicide by targets

About this time of the year eight years ago, as a much younger, sprightlier and less grey (by at least a few shades) Chrenk, I was starting to watch from the inside of the tent and up-close the unfolding political suicide of the then leader of the opposition, Malcolm Turnbull, in his drive to bind the Liberal Party to Labor’s Emission Trading Scheme policy. The ETS would have established Malcolm’s credentials as one of the new breed of progressive and green-friendly leaders of centre-right parties, on par with David Camerons of this world, in addition to enabling Malcolm’s spiv mates from the big end of town to make tens of millions of dollars trading more ephemeral pieces of paper. But away from party rooms, trading rooms and boardrooms, at the coalface (so to speak), where it actually matters, it would have had zero impact on global temperatures, while at the same time decimating Australia’s economy. The ETS policy was a triumph of moral posturing and trendy symbolism at the expense of the national interest. Whatever your views on anthropogenic climate change, the scheme would have led to no environmental gain for all the pain for our resources-rich, export-oriented nation. We all know how the whole sorry saga ended: Malcolm rolled (disclosure: my then boss, Senator Brett Mason, was the first to resign from the shadow ministry over his opposition to the ETS and one of ten to sign the spill letter), ETS rejected by the Party Room, the coalition with the National Party preserved, electoral annihilation averted, the policy itself ditched by the Labor government, which then in turn ditched the policy’s biggest apostle, Saint Kevin of Kyoto.

Is history repeating itself, to borrow from Marx, first as a tragedy, second time as a farce?

As Judith Sloan writes in “The Australian”:

If you believe your annual electricity bill will fall by $90 every year for the next decade, you will believe anything. Renewables will go from 28 per cent of electricity generation in 2020 (including rooftop photovoltaics) to 42 per cent in 2030 (and 73 per cent in 2050) — but your electricity bill will fall each year. That’s the Finkel review message.

It flies in the face of what we know about the international experience of renewables: there is an almost perfect positive relationship between the penetration of renewables and the price of electricity. Think Denmark and Germany with their high percentages of electricity generated by wind and solar (mainly wind), and think extremely high electricity prices.

Finkel’s 42 per cent clean energy target is this year’s ETS; less direct than an emission trading scheme, but no less expensive for the economy and the consumers, no matter what ridiculous claims about falling electricity prices the report and its supporters make. A clean energy target is but another way to force decarbonising of the economy by favouring the more expensive and less reliable renewables at the expense of the cheap but politically and environmentally incorrect energy sources we currently rely on. And once again, Malcolm Turnbull is pushing this idyllic green vision on the reluctant Party Room.

The truth of the matter is that only way to effectively replace coal, oil and gas with clean alternatives like solar, wind, thermal, hydro, tidal and others is to make the latter as reliable and as cheap as the former. This will come only as a result of further scientific and technological progress. Progress, which over the past few decades has already seen solar energy made easier and cheaper than a scientific curio it has started as, but not easy and cheap enough yet to compete with carbon-based energy sources on a level playing field. Thanks to that near-inexhaustible natural resource, human ingenuity, I have no doubt we will get there one day, or if not quite with solar, then perhaps with cold fusion, hydrogen or any number of other technologies ranging from imagined to experimental. But we’re nowhere near there yet. The speed, extent and direction of technological progress in the area of energy production is not something that anyone can credibly forecast, which makes any projections about future prices (over several decades ahead) of electricity meaningless, and therefore any timetables ridiculous, if not also dangerous, if the idea is to stick to them at any price – to the consumer.

If you really care about promoting renewables as an alternative energy source, lobby governments to spend more on scientific research to make them easier to use, more reliable, and more competitive, and not through a unfair subsidy of mandating use regardless of the price differential. You might think that much higher energy prices and therefore substandard economic performance are the price worth paying for the “cleaner and greener” Australia, but unless every other significant economy in the world is willing to make the same sacrifices, you are merely buying some very expensive moral vanity. More than that, you are forcing everyone else, from a Bankstown pensioner to Malcolm Turnbull’s Point Piper neighbour to buy it too, to make you feel good about yourself – all with nil impact on the global temperature. Or you can deceive yourself and others even more by making promises about the energy prices actually falling, when you have no way to guarantee such decreases, and all experience suggests otherwise, at least in the short to medium term.

Time will tell if Malcolm is prepared to die in the ditch (again) to promote an environmental policy at odds with the party base and its parliamentary membership. At best, the renewable energy target might end up as another typical thought bubble of the Turnbull administration: much ado about nothing, and no harm done – except to the credibility and electoral prospects of the current government.