At a time when Australia is in the midst of an extraordinary fire season, a result of its driest and hottest year since records began, this book gave me life. It is a calmly stated, and quite technical, guide to fixing Australia’s climate policy impasse. But this book could radically transform Australia’s approach to climate change.
Ross Garnaut is Professorial Research Fellow at the University of Melbourne. He is also, as the media has just realised, something of a climate prophet. He produced Australia’s two major climate policy reviews – in 2008 and 2011. These led to Australia developing a big bunch of climate policies, including the notorious carbon “tax”. These policies did exactly what they were meant to do, including vastly increasing the amount of electricity from renewables, but then some of them were repealed following the election of Tony Abbott in 2013. This led to years of policy uncertainty that has done untold damage to Australia’s ability to reduce greenhouse gas emissions.
As we’re already seeing, Australia is the developed country most vulnerable to climate change. We also have to reduce emissions to play our part in global climate action. Ross’s argument is that this could make Australia an economic superpower in a low-carbon world.
There are three pillars to his argument. One, a vast increase in renewable electricity that would ultimately drive down electricity prices. Two, a huge increase in industrial processing driven by cheap, zero-carbon electricity. And three, a vast transformation of the land to reduce emissions and remove carbon from the atmosphere.
It is a bold idea, but it isn’t unprecedented. Other leading climate policy experts, such as those from Australia’s Deep Decarbonisation Project, have developed very similar plans. The great thing about these plans is that by passing climate change through an economic lens, they cut through politics. They are deliberately, and powerfully, hopeful.
The main plus of Ross’s argument, and it is a huge plus, is how optimistic it is. Reading this book I felt reassured and hopeful again. After some very trying years of very poor climate debate, this book offers a way out. It’s a plan everyone can get on board with, from all sides of politics. Done carefully, it could not only reduce emissions and grow the economy, but take care of other things we like, such as the environment. All we have to do is get started.
I’ll mention a couple of things that aren’t in this book. Nuclear energy is one – Ross considers it briefly, but ultimately rejects it because of its high costs. Other, more interesting forms of renewable energy aren’t here either (tidal, geothermal), but he leaves the door open should they become cheap enough.
Don’t expect this book to be a manifesto against economic growth or capitalism. Ross is an economist, and he is adamant that we can have our cake and it too, and I have to say, it is persuasive. He is very confident that we’ll be able to take carbon out of the atmosphere and store it, which seems to me rather optimistic, but who am I to judge! The vast transformation of the land also raised some red flags. We’re going to need a bunch of conservation scientists to make sure we don’t destroy the country in the process of stopping climate change.
The book’s one major flaw is that it is not designed for general readers. I worked as a journalist on Australian climate and energy policy for four years and I found it a slog. Policy-makers and -watchers will get a lot out of it, and I hope our members of parliament are up to it too, because it is vital they understand its messages. Someone should do a version for the rest of us…
So in the interest of spreading the message, I thought I’d do a bit of a chapter-by-chapter guide. Any mistakes in the following are my own, and remember, I’m not an economist.
1 – A personal reflection…
Ross starts on a 2019 road trip in the Murray-Darling, centre of another recent climate disaster, the deaths of millions of fish as waters dried and warmed, including ancient Murray cod. The Murray-Darling as a whole is drying out, which is bad news because it’s currently home to a lot of farms. On the whole the case has strengthened for keeping global warming below 1.5°C, which would mean about 2°C in Australia (we’re halfway there and things are bad enough). We will still leave an awful mess for our grandchildren to clean up, Ross writes, “awful, but not impossible”. He lays out his main argument of the book: that it is now way cheaper to address climate change than he ever predicted, and in fact could help grow Australia’s economy.
2 – Exorcising the diabolical policy problem
In this chapter Ross looks at all the things that have and haven’t changed since his last climate review in 2011. In the “haven’t changed” corner is the science, which has only got more certain. In the “have changed” corner is the gentle and recently not-so-gentle rise in public support for climate action and an increased awareness of the ethics of acting or not acting on it. Policy-wise, things looked hopeful after the 2015 Paris Agreement, and even China, the world’s biggest emitter of greenhouse gases, was making major headway. That has started to reverse with Trump’s trade war.
In Australia things were looking good when the government adopted pretty much all of Ross’s recommendations including a carbon price, and then took a turn for the worse with the election of Tony Abbott in 2013, who repealed it, sending Australia into a decade of policy uncertainty. This chapter is Ross’s way of saying “I told you so” but he is too polite to say it like that.
3 – Risk, reward and the economics of climate change
This is the most economics-y chapter of the book. Much of it discusses the “discount rate”. Ross dispiritingly promises that “no subject is duller for most people when they are first exposed to it”. Actually, it turns out to be pretty interesting, if theoretical. Discount rates are how economists value things (and “things” also includes people) in the future. They’re important because if we don’t value things in the future very highly (a high discount rate), then there’s not much point in paying a lot of money to stop climate change now.
Fortunately Ross argues that the discount rate is lower than he originally thought, and lower than other economists who work in this space. When matched with the lower costs of addressing climate change, it is a persuasive argument for action. Unfortunately the discount rate is lower because it now seems less likely that people in the future will be as rich as we are, and also because he’s counting extreme and catastrophic climate change that might make humans extinct. Much of this book is like that: a hopeful cloud with a silver lining of despair.
4 – The electricity transformation
Now we’re into the meat of Ross’s argument, and the first of his three pillars for Australia the low-carbon superpower. This is that Australia must fully decarbonise its electricity supply – totally giving up on coal and gas, and replacing them with renewable energy. This transformation is already underway. Electricity used to make up 40% of Australia’s emissions but now it is only a third. It hit a hiccup with the recent policy uncertainty but will pretty much continue for two reasons: the technology costs of renewable energy have fallen so much and borrowing money is cheaper in general.
Australia currently has very high electricity prices, but renewable energy will ultimately make them cheaper, and become very attractive for businesses to set up things that need cheap, zero-carbon electricity (keep that in mind for the next chapter). Australia now needs to do two things: create incentives for “firm” electricity (electricity that doesn’t depend on the sun shining and the wind blowing, such as batteries or other forms of storage) and for expanding the transmission network (so that renewable energy can get to where it’s needed). We could also sell our cheap, zero-carbon electricity overseas by building underwater pipelines to Asia, or by turning it into hydrogen fuel.
5 – The industrial transformation
Industry makes up a third of Australia’s greenhouse gas emissions. This chapter is about how to keep taking advantage of Australia’s enormous mineral resources (Australia is the world’s largest producer of both aluminium and iron ore), and all that cheap renewable energy, without ruining the climate. Most of the minerals mined in Australia are currently processed overseas because it’s cheaper, but Ross argues that will change when the world needs zero-emissions products. This can be done in four ways. This chapter gets quite technical about how minerals are processed but basically industry has such high emissions because it needs lots of electricity (which currently uses a lot of coal) and also it uses fossil fuels directly in turning minerals into the metals we use.
First, use all that cheap renewable electricity in industrial processing. Then, for the industrial processes that currently rely directly on coal and gas, use hydrogen for some (which also requires electricity) and for others use biomass (basically, wood). Finally, capture any remaining greenhouse gas emissions and put them underground.
6 – The transport transformation
There’s a pattern to this book. As we move through the chapters, things get harder. So we come to transport, which currently makes up a quarter of Australia’s emissions. Australia has been slow to take up electric and hydrogen cars, but that could change quickly with the low cost of renewable electricity. This transformation is driven by electric (for short distance) and hydrogen (for long distance) cars, more public transport, and some biofuels for things like long-distance flying. The main problem is that thousands of electric cars needing to be charged would drive up electricity demand enormously. Also it could make the grid less secure, if all those cars are charged when people get home from work in the evening. So we need incentives for people to charge their cars at other times. And we need a big investment in charging infrastructure.
7 – Earthing carbon
Of all of Ross’s pillars, this one is in the earliest stage. His main recommendation is more research. This chapter is about reducing emissions from things like farming and forestry, and actually removing greenhouse gases from the atmosphere by harnessing the power of plants. Emissions from the land have declined enormously over the last decade, and are now negative (the land is actually taking carbon out of the atmosphere). Of course this is offset by huge increases in emissions elsewhere in the economy. If renewable energy can reduce Australia’s emissions by two-thirds, Ross writes, the land sector could do the rest.
The main strategies under consideration so far are restoring poor grazing land so it sucks up carbon, farming gum trees like mallee in places that will soon become too dry for crops (Murray-Darling looking at you), changing burning practices, and improving soil. Should this transformation happen, it would radically change what regional Australia looks like. Instead of crops and livestock, imagine carbon farms stretching to the horizon.
8 – Embracing Australia’s low-carbon opportunity
In this chapter Ross sums up everything he’s already said. He wants to “build a bridge”, from Australia’s current policy uncertainty to hope and opportunity. Despair creeps in again: he notes that there is always a risk “that our grandchildren will inherit a parched and disordered country in which a past time of prosperity, democracy and good order is a myth of origin”. However there’s hope: support for climate action among voters seems to have settled at around 60%, which is surely enough for the government to take notice.
Interestingly, Ross argues that campaigning against coal mining projects, such as Adani, is a distraction, because international rules say we are only responsible for greenhouse gases produced within a country, and not for coal burned overseas.
Ross doesn’t see carbon pricing returning or an increase to Australia’s low climate target. This is unfortunate but he reckons they’re not necessary, and that the government could reduce emissions by half by 2030 without making a big deal about it. He makes a bunch of policy suggestions.
He finishes in central Queensland, with the powerful argument that not only will Australia’s low carbon economy be good for the economy, but that it will be particularly good for regional Australia, which brings his story full circle.
Superpower: Australia’s low carbon opportunity is published by Black Inc.