Proof of Climate Change

If you want an example of the reality of rapid human-induced climate change, you only need to look at the change in tone of reporting after Labor won the Australian federal election. In barely a week after the win, reporting on Kyoto changed in the Australian (mostly Murdoch's News Limited -- strictly limited) press from "we can do more by staying outside an imperfect system" to "Australia joining the club makes it so much stronger".

It was always a mystery to me in any case why refusing to join the club somehow gave us a stronger voice. All the weaknesses of Kyoto were extremely well known – indeed some were engineered in deliberately to make it an easy starting point. How, therefore, being outside would make those weaknesses clearer escaped me.

No doubt all of this made sense in the cloud-cuckoo land of a losing election campaign.

Now, we can turn to hard reality: gearing up for post-Kyoto.

The fact is that the Kyoto targets were more symbolic than real. Yet being in the system has focused effort on renewables and other approaches to emission reduction. Germany, with about half the rate of solar radiation we have with only about a twentieth of the land area, generates more than ten times the solar power per capita that we do. Why? Because Germany has stratagems like an aggressive policy for rewarding feed-in (when you generate solar power, and sell the excess to the grid).

The next piece of hard reality is short-term targets.

Labor has committed to committing to short term targets only after receiving a report from Professor Ross Garneau in 2008. That’s a start, but you have to worry about the commitment Labor has made to tax cuts without considering potential costs of emissions reduction targets. Here are a few examples of potential costs. Hot dry rock geothermal power is a promising technology that looks nearly ready to go, but significant commercial risks remain before the first plant can be operational. If hot rocks become part of the plan, is the government willing and able to stump up capital, if the private sector balks at the risk? What if the oil price continues to rise, making fast trains a desirable alternative for inter-city travel? Does the government have funds stashed somewhere to get new infrastructure costing tens of billions of dollars built?

Then there’s the clean coal story – an even more unproven technology than hot rocks. The fact that parts of the technology have been tested in different ways and on smaller scales doesn’t mean it will work. Again, there are significant risks that could prevent private capital from touching the technology. Either the government will have to support it with substantial capital – or face up to more likely scenario of the costs of a substantial decline in coal usage, both domestically and internationally.

On top of these straightforward risks is the question of how steep a carbon tax needs to be imposed to make cleaner technologies competitive. The carbon tax needs to be high enough to make the new technologies viable, but not so high as to cause major economic damage. It also needs to be calibrated to similar measures overseas.

On the subject of economic damage, the risks are somewhat overstated because a reconfiguration of an economy seldom results in pure cost. No doubt when the first Model-T hit the showrooms, the horse industry predicted doom and gloom. And, indeed, farriers and horse manure shovellers were put out of work in large numbers... and no doubt still populate the dole queues in large numbers. A significant factor in a post-Kyoto economy will be improved efficiencies, which should have a knock-on effect. In the process of reducing energy needs, an organization may find and eliminate other inefficiencies. Why? Once a culture of R&D has been established, the scientists and engineers engaged to reduce energy consumption will need to justify their jobs by discovering other useful innovations. (And of course it will be harder to fire them under a Labor government when the job is done, but I digress…)

The indirect cost of recalibrating the economy is rebuilding capacity for R&D in areas long neglected under the previous government: alternative energy, business process efficiency, science, engineering and mathematics.

Australia is well below the OECD average for R&D expenditure measured as a fraction of GDP (1.64 in Australia, versus an average of 2.26 – 2005 figures). Providing an incentive to spend more on R&D, in the long run, will advantage our economy not disadvantage it as apologists for doing nothing claim. Being stuck in a fossil fuel economy when the rest of the world starts imposing carbon taxes certainly will not be a good place to be.

With some of the recent announcements of findings that indicate that climate change science up to now has been understating the risks, we need to be on side, and taking part constructively, not carping from the sidelines.

To misquote LBJ: we can surely do more by being inside the tent pissing out than by being outside the tent pissing in.