Cheap oil and climate ambition both down the pan, says International Energy Agency, kinda

NORMALLY first thing in the morning, a mug of coffee is never more than an arm’s reach away and there’s never a chance of that first serving of caffeine going undrunk.

Nasty habit I know, but I’m sticking to it. In fact, so entrenched is my morning coffee habit, that it would take an earthquake, a major explosion in the kitchen or the sudden realisation that I’m missing a limb, to distract me enough from its drinking.

Today though, you can add to that list, the publication of the International Energy Agency’s World Energy Outlook 2010 which has left my double espresso unloved and un-consumed. This morning, the IEA has declared that “the age of cheap oil is over” and that current commitments by world leaders won’t be anywhere near enough to limit global warming to 2C.

The IEA, for anyone that doesn’t know, is the organisation which provides advice to the world’s major economies on the future of energy sources including oil, gas, coal and renewables. They tell the world how much there is, how much it’s going to cost and what might happen in the future to prices and availability. In recent years, they’ve also started to consider the impact that different scenarios will have on attempts to limit emissions of greenhouse gases. However, there have been some suggestions that they’ve been cooking the books a bit, to make the outlook for oil sound better than it really is.

This year the agency has looked at the future through the carbon-tinted spectacles of its “New Policies Scenario” which “takes account of the broad policy commitments and plans that have been announced by countries around the world”.

So these are the things which governments have said they’ll do, or that they would like to do, but not necessarily things they’ve managed to get onto the statute books. So how’s that looking then? Continue reading “Cheap oil and climate ambition both down the pan, says International Energy Agency, kinda”

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Carbon price – Rio Tinto wants one too

LOTS of excitement after the boss of mining giant BHP Billiton gave a speech in which he said was in favour of a price on carbon and would quite like it if Australia’s Labor-led coalition government could get on with it.

Perhaps BHP Billiton CEO Marius Kloppers was still a little dizzy from his company’s recent $13.8 billion profit announcement, but here’s a bit of his speech.

The decisions that we are taking now on power production and building infrastructure will still be with us by the time we expect a global price for carbon to be in place. With about 90% of the carbon emissions from our electricity sector coming from coal fired power stations, Australia will need to look beyond just coal towards the full spectrum of available energy solutions.

Failure to do so will place us at a competitive disadvantage in a future where carbon is priced globally. My main point is a simple one – we need to anticipate a global price for carbon when taking decisions with long dated impact. The decisions we take now on power production will still be with us long after a global price for carbon is finally in place.

Editor of Climate Spectator, Giles Parkinson, declared Kloppers was showing “the sort of leadership from the biggest companies that has been so desperately lacking in the last 12 months”. Greens leader Bob Brown said Kloppers’ statement would add strength to the efforts by the new government’s climate change committee as it tries to find a route to a carbon price.

But BHP Billiton isn’t the only gigantonormously-really-quite-big mining company to have laid their carbon cards on the table in recent weeks. The Queensland Parliament’s Environment and Resources Committee is currently in the midst of an inquiry into renewable energy which currently accounts for just two per cent of all the state’s electricity.

Among the submissions to the inquiry is this from Rio Tinto Alcan and Rio Tinto Coal Australia.

It is widely understood that reducing greenhouse gas emissions will require a transformation in the way we produce and use energy. While renewables will play an important part, they must be seen as part of a portfolio of low emissions energy technologies (including nuclear, renewables and carbon capture and storage) that deliver increased energy efficiency. A carbon price on all terrestrial carbon is required to deliver that transformation.

So now Rio and BHP Billiton have joined the lengthening line of companies asking for a carbon price, such as electricity retailer AGL and technology company Siemens which were co-signatories of an open letter earlier this year.

Is this the bit where we point out that Liberal leader Tony Abbott has declared he’d never put a price on carbon, even if his policy announcements before the election seemed to declare the opposite?

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Abbott and Gillard offer to widdle on the climate change bonfire

ACCORDING to Tony Abbott, only the coalition has a credible climate change policy to achieve a five per cent cut in Australia’s emissions of greenhouse gases by 2020.

Allow me, if you will, to equate this climate change challenge to a gigantic raging bonfire of all Tony Abbott’s currently and previously-owned pairs of budgie-smugglers which would surely be a blaze three-storeys high visible from Christmas Island.

Presented with the challenge of controlling this three-story high bonfire of budgie-smugglers, what Tony Abbott is saying is that only he has a credible policy to enable him to pee on it, such is the gap between what is being offered and what is needed.

A couple of days ago, I was on a journalist’s panel listening to the three candidates for the seat of Brisbane talk climate and conservation to a group of gathered greenies. Both Labor’s Arch Bevis and Liberal Theresa Gambaro re-iterated their leaders “commitment” to that 5 per cent cut (the Greens candidate Andrew Bartlett pointed out they would be looking for a 40 per cent cut).

At one point  Mr Bevis stated that Labor was following the “science” on climate change, at which point I surmised that you’d be hard-pressed to find a credible climate scientist advocating a five per cent cut.

So what does the “science” think of a five per cent cut?

Well the minimum recommended by Professor Ross Garnaut’s comprehensive government review two years ago, was a 10 per cent cut. This 10 per cent cut, Garnaut said, would represent a fair shake of the sauce bottle from Australia as part of a global effort to stabilise emissions at 550 parts per million in the atmosphere.

Continue reading “Abbott and Gillard offer to widdle on the climate change bonfire”

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ETS v CARBON TAX = delay

NOW that Australia’s emissions trading scheme has been placed in deep freeze, on the back burner or whatever other analogy you might care for, talk is turning to an alternative market-based system to cut down emissions.

Donna Green and Liz Minchin at newmatilda make a decent stab at suggesting we should have plumped for a carbon tax all along.

Compared with an ETS, a tax is a simpler, more effective, faster solution for cutting emissions. That’s why so many people and major financial institutions — from renowned economists like Jeffrey Sachs and Nobel laureate Joseph Stiglitz to world-leading scientists like NASA’s James Hansen — all back a tax over trading.

Minchin and Green’s analysis of the issue runs over similar ground to that long-argued by the Carbon Tax Center in the US, which also thinks a tax would be faster to implement, encourage more predictable energy prices and be harder to fiddle than cap and trade.

I wonder though if this emerging debate will have a similar effect to the one artificially generated by climate change sceptics over the strength of the scientific evidence backing action on climate change?

Minchin and Green say a tax would be quicker to implement than an ETS. We should remember though that it took the best part of 15 years for Australia to introduce another consumption-based tax, the GST.

What this debate really adds up to is further delays and while this policy uncertainty is certainly harming the renewable energy sector, the same can’t be said for the resources sectors.

In the meantime, why not fiddle around with one of the only policy success stories to come out of the climate change box in recent years – the 20% by 2020 Mandatory Renewable Energy Target?

100% anyone?

By the way… this is the first post of my new blog. My old one is still sitting there with News Ltd.

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