Take climate change. It, of course, is a threat – to our climate, and hence to our comfort and our economy – but think a bit more about it and you realise that, for a country like ours, it’s also a new gravy train we could be climbing aboard.
The stumbling block is that responding to climate change requires change – and no one likes change, especially those who earn their living from the present way of doing things.
So, what more natural reaction than to resist change? Economists are always warning politicians not to try “picking winners”. In reality, they’re far more likely to resist change by spending lots of money trying to prop up losers.
Start by denying that change is necessary. Global warming isn’t happening, it’s just a conspiracy by scientists angling for more research funds.
Nothing new about heatwaves, droughts, floods and cyclones – they’ve always existed. They’re becoming bigger and more frequent? Just your imagination.
What you’re not imagining is the ever-higher cost of electricity. But that’s just because those ideologues imposed a carbon tax and are making us subsidise renewable energy. Get rid of the taxes and subsidies and the cost falls back to what it was.
And those terrible wind turbines. They’re unnatural and unsightly, they kill rare birds and their noise endangers farmers’ health.
Renewable energy is unreliable because it depends on the wind blowing or the sun shining. You need coal for steady supply. With the greater reliance on renewable, where do you think the blackouts are coming from?
And renewable energy is so expensive. Coal-fired electricity is much cheaper. Plus, we’ve got all our chips stacked on coal. We’re world experts at open-cut coal mining. Our coal is much higher quality than most other countries.
Coal provides jobs for 30,000 workers. There are towns desperate for jobs who’d just love another coal mine. And, of course, we’ve still got huge reserves of the stuff that’s of no value if it stays in the ground.
Some of these claims have always been untrue, some are no longer true and some are less true than they were.
Just this week, for instance, a report from the independent Grattan Institute has debunked the claim that “outages” are being caused by renewables, saying more than 97 per cent of outage hours can be traced to problems with the local poles and wires that transport power to businesses and homes.
While it’s true that power from existing coal-fired generators is dirt cheap, many of these are old and close to the end of their useful lives. They’re not being replaced by new coal generators because there’s too much risk that the demand for coal-fired power will dry up before the generators have returned the money invested in them.
The latest report from the CSIRO says the lowest-cost power from a newly built facility is now produced by solar and wind.
The cost of solar, battery storage and, to a lesser extent, wind power, has fallen dramatically over this decade, partly because of advances in technology but mainly because of economies of scale as China and many other countries jump on the bandwagon. These falls are likely to continue.
This has gone so far that the old arguments about the need for a price on carbon and subsidies for renewables are being overtaken by events.
Installation of renewable generation is proceeding apace, with all renewables’ share of generation in the national electricity market jumping from 16 per cent to 21 per cent, just over the year to December, according to Green Energy Markets.
So, as the economist Frank Jotzo, of the Australian National University, has said, coal is on the way out. The only question is how soon it happens.
According to our present way of looking at it, this is disastrous news. But not if we see it as more an opportunity than a threat.
Professor Ross Garnaut, of the University of Melbourne, has said that “nowhere in the developed world are solar and wind resources together so abundant as in the west-facing coasts and peninsulas of southern Australia.
“Play our cards right, and Australia’s exceptionally rich endowment per person in renewable energy resources makes us a low-cost location for energy supply in a low-carbon world economy.
“That would make us the economically rational location within the developed world of a high proportion of energy-intensive processing and manufacturing activity.”
Ross Gittins is the Herald’s economics editor.
Ross Gittins is the Economics Editor of The Sydney Morning Herald.