Fossil fuels may have spurred the industrial revolution, but they’re also now threatening the very existence of the planet. Corporate governance expert Thomas Clarke explains why funding domestic, community-based renewable energy projects rather than the ‘stranded assets’ of international energy corporations makes more sense to business and the environment.
The new coal mine planned by Adani in Queensland’s Galilee Basin, if it is constructed, will be Australia’s largest. At a cost of $21.4 billion, the Carmichael project will make Abbot Point on the Great Barrier Reef one of the largest coal ports in the world. The mine will produce a total of 2.3 billion tonnes of thermal coal, equivalent to 4.7 billion tonnes of carbon dioxide over its operational life.
That represents an existential threat to the ecological future of Australia, not only to the precious beauty of the Great Barrier Reef.
If the Adani coal mine goes ahead it’s also unlikely the Australian Government could ever meet its declared commitment to the Paris Agreement on reducing emissions to limit climate change. In addition, by dumping vast quantities of coal into India it will also make it unlikely that India could meet its commitment to the Paris Agreement. In fact, since Adani will on its own use 0.5 per cent of the entire global carbon budget remaining, it could be the biggest single cause of wrecking the Paris Agreement.
At this stage, this potential environmental catastrophe is unfolding in slow motion. Adani has secured the agreement of both the Coalition Federal Government and the Queensland Labour Government. The mining giant has done so with the promise of billions of dollars of investment from the Adani Group and the creation of employment in North Queensland. However, the refusal of all four main Australian banks, and of an increasing number of international banks, to invest in the Adani mine exposes the fact that coal is no longer considered an acceptable or viable investment.
Australia, along with 195 other countries, signed the UN Framework Convention on Climate Change in Paris in 2015 (under Tony Abbott’s government). The Paris Agreement commits the signatories to reducing carbon emissions by 26 to 28 per cent by 2030 and signals a systemic move away from generating electricity from fossil fuels. The aim of the Paris Agreement is to hold any increase in the global average temperature to below two degrees Celcius above pre-industrial levels. A rise of more than that would see the global environmental, ecological and social damage of climate change increase exponentially.
The Adani Carmichael project is a fossil fuel nightmare from the past. The argument used by the Australian Government that the coal is intended for India where it will free millions of people from living in energy poverty is not convincing.
The Australian-mined coal will be too expensive for the poor of India, who are not even connected to the national grid. The Indian government policy is to limit reliance on imported coal, and to increase access to renewable sources of energy. In sharp contrast, this Australian mine will benefit only the billionaires who own Adani.
As revealed in a recent ABC Four Corners program on Adani, this mining group has a doubtful reputation in India for environmental violations and tax evasion which remain under investigation. The complex and opaque corporate structure of Adani, in which all subsidiaries ultimately lead to offshore tax havens, is not reassuring that any Australian Government investment would be worthwhile.
The $900 million loan being considered by the Northern Australia Infrastructure Fund to build a 189 kilometre rail line from the Carmichael mine directly to the port at Abbot Point I suggested was “a billion dollar government funded ghost train” at the Senate Economics Committee Inquiry into this in August 2017.
“If the Adani coal mine does goes ahead it’s also unlikely the Australian Government could ever meet its declared commitment to the Paris Agreement”
Fossil fuels were the source of the industrial revolution and many related industries, and stamped the character of the 20th century. But fossil fuels have caused the sustained degradation of the earth’s environment and ecology, severely damaged public health in urban communities across the planet, and are now coming to the end of their useful life. Though the international energy corporations are clinging to their trillions of dollars of fossil fuel assets discovered over a century of exploration, these are essentially stranded assets which can never be used in an environmentally safe way.
Energy companies now have the opportunity to join the 21st century in the exciting new industrial revolution of renewable energy. But this will require a paradigm shift in energy production.
Fortunately, as Al Gore demonstrates in his most recent TED talk, there is now an exponential growth in the development of all forms of renewable energy worldwide including solar, wind, hydro and wave power. In contrast to the energy industry behemoths of the past, the future of energy is decentralised, decarbonised and digital. The great divide between producers and consumers of energy will be replaced with domestic, community and local supplies of renewable energy which is readily distributable by digital means.
One startling illustration of this is research just published from the Australian National University which indicates 22,000 potential sites across Australia for pumped hydro storage. Together with wind or solar photovoltaic technology, they could provide 100 per cent renewable energy for the national grid. (Think of these as small Snowy Mountain hydro projects all around Australia.)
Fast tracking a few of the best sites for this technology could balance the grid when the Liddell and other coal-fired power stations close. Combined with the completion of Elon Musk’s 100 megawatt battery array in South Australia, the future of energy production in Australia is a much brighter prospect than we have been led to expect.
And the best part of this paradigm shift in energy production is that we can concentrate on maintaining and reviving the natural capital of the Great Barrier Reef and other ecological wonders of Australia, rather than destroying them in a sad delusion of ‘wealth generation’.