Even though the US House of Representatives passed the Waxman-Markey cap-and-trade emission restraint bill last week, it has to pass the more formidable hurdle of the Senate before it can become law. The bill requires a 20 per cent reduction in US emissions by 2020 and an 83 per cent reduction by 2050.
Such a level of reduction would bring US emissions to the present world average and is consistent with stabilising global CO2 equivalent emissions somewhere between the present 450 parts per million and the projected 550 parts per million.
As the Copenhagen conference in December approaches, it becomes increasingly clear that it will end in an absence of meaningful pledges to reduce CO2 emissions. The executive secretary of the United Nations Framework Convention on Climate Change, Yvo de Boer, gave his best spin, saying it would be, “physically impossible to finalise every last detail”.
Emission-reduction commitments are being diluted. A watering down of the European Union’s proposed targets is certain to be intensified after the recent election results. Faced with a 35 per cent increase in emissions, a newly elected Canadian government abandoned its 6 per cent Kyoto emission-reduction objectives two years ago. Japan is proposing to do little more than hold its existing emission levels.
Meanwhile, the developing world, which now has similar emissions to those of the developed world, is playing hardball. China, in return for some aspirational reductions down the road, is demanding the US reduce emissions by 40 per cent by 2020 and, in addition, provide 1 per cent of its gross domestic product a year in assistance to poorer countries, including itself. Comparable demands would apply to similarly placed countries, such as Australia.
The Greens aside, even Australia’s most carbonophobic legislators cannot credibly proffer a 40 per cent reduction in emissions by 2020. And for Australia, a 1 per cent a year outflow for assistance comes to $10 billion a year – half our defence spending.
Coal is one certain casualty of any carbon tax or cap-and-trade system that stabilises CO2. Because of its carbon content, coal cannot continue to be burned if carbon emissions are to be reduced to the extent intended. Technologies such as carbon capture and storage offer no life support for coal; even on the most favourable assumptions, they would produce coal-derived energy at more than twice present costs.
We can only speculate about what future technologies might be low-cost alternatives to coal, oil and gas, though there is little possibility that wind and other exotic renewables could do the job. They could never become sufficiently reliable, let alone achieve the threefold lowering of costs needed to enable them to match fossil-fuel prices.
The only currently feasible means of achieving a drastic reduction in emission levels is a conversion of electricity generation to nuclear. For Australia, this would be a trillion-dollar program and leave us with higher electricity costs. To allow the targeted reduction in emissions, it would also entail some means of ensuring vehicles ran on nuclear-generated electricity. It would also mean considerably less air travel, unless new means of aircraft propulsion are invented.
The loss to Australia from coal’s obsolescence would be considerable. Comprising a quarter of our exports, coal is the basis of the low-cost energy that has been our industrial backbone. Spin-offs for other industries aside, the wealth stored in our 76 billion tonnes of coal deposits would be lost. Even with an intrinsic value as low as $10 a tonne, this amounts to $760 billion, which is close to this year’s gross national product.
Ironically, those most vocal in opposing coal as a power source are also the most hostile to nuclear power. Some just want a different sort of economy – one less attuned to the materialism they despise. Others have become attached to economic models that indicate closing down energy-intensive industries would mean their swift replacement by new businesses. They naively envisage new activities that will allow miners to become bookies’ clerks, and iron workers to retrain as shop assistants.
Many of those welcoming an enforced ending of the fossil-fuels era parrot the cliche, “The Stone Age did not end because we ran out of stones”. But steel survived the end of the Iron Age and copper the end of the Bronze Age, and we have not stopped using stone. Nor were these eras ended by targeted taxation measures.