Last week in parliament, Kevin Rudd wheeled himself in to respond to a Dorothy Dixer on emissions trading. This allowed him to traverse the whole enchilada on climate change and the policy response. In the absence of action, he predicted higher seas, lower rainfall and stronger cyclones.
"A direct environmental assault on the planet [and] on our country", is how he put it. He argued crop production would fall, the Great Barrier Reef would be endangered, malaria would spread southwards, and we would be vulnerable to heat deaths and dengue fever.
Many would doubt these claims. And, at least with respect to the tropical diseases, Rudd himself might have wondered why malaria and dengue fever are not already prevalent in warmer parts of Australia if they are to become problems with a two degree temperature rise.
With renewable energy requirements, direct budgetary spending and regulations on product supply and housing construction, Australia is already spending about $3 billion a year.
Building on this, we are starting to see a kaleidoscope of greenhousecentred reports based on general equilibrium models of the economy. Activists, business and government agencies are feeding in assumptions to the modellers and then hawking the findings. The Australian Conservation Foundation contracted CSIRO (not an agency renowned for its economic expertise) to examine the impact on the economy of its own favourite scenario. Its report, Growing the Green Collar Economy, assumes away most of the problem with a belief that the nation's productivity can double with its energy use simultaneously halving.
This is the sort of fantasy that a hack golfer might construct from adding together his best ever scores on each hole and concluding he could beat Tiger Woods.
At least the ACF understands that Australia's carbon emissions have to be reduced, perhaps by 90 per cent, if we are to play a part in stabilizing global emissions. But to get there it had to adopt the most fanciful of possibilities. These included replacing coal with wind and some gas. Wind, however, cannot be used except in minor quantities -- not only is it three times the cost of coal but its variability means a wind-based system would face constant power outages.
Gas is an excellent fuel but is also carbon intensive and any substantial expansion of Australian demand would require a price more than three times that prevailing at present. Even if the ACF assumptions were realistic, the future would be joyless. We would face a massive reduction in car use, a change in diet away from meat and back to grains, no heating and air-conditioning, no air travel. The ACF sees green jobs replacing those lost by its proposals, though it is difficult to see eco-tourism thriving in the face of travel restrictions.
Alternative-scenario settings provide still bleaker pictures of a carbon-constrained future. A recent Access Economics report, using some highly optimistic assumptions about the cost of wind and other alternatives, concludes that for 2020 a carbon tax of $19 a tonne of CO2 would bring a cost to the economy of $18 billion a year.
Financially viable clean-coal technology seems to be a bridge too far. The newly announced Victorian brown-coal plant is dependent on a hefty subsidy simply to match blackcoal plants' emission levels.
And Climate Change Minister Penny Wong continues to pursue a 20 per cent renewable target in addition to an emissions tax, notwithstanding advice from the Productivity Commission that this will add needless further costs.
The only way deep emission reductions appear achievable is by a comprehensive shift to nuclear power.
Politicians are fresh from vilifying this energy source and denying that there is any possibility of such facilities being sited in their electorates. Last week, at the Australian American Leadership Dialogue in Washington, the Labor Party's Bob Carr and Paul Howes made steps to equate green with nuclear. Rudd has said we can do the CO2 reductions without nuclear power but he will change his mind once he's got the avalanche of climate change reports he has commissioned.
The reality is that we would need perhaps 40 nuclear plants dotted all around our coast if a carbon-free economy is not to mean impoverishment. Even then we would have lost our competitive advantage of cheap power, nuclear being 50 to 80 per cent more expensive than coal.
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