For months conservative politicians and commentators in Australia and around the globe have been desperate to link the world’s energy crisis to policies to get greenhouse gas emissions to net zero.
By blaming the energy crisis on net zero policies, commentators have laid the fears and suffering of people around the world at the feet of climate advocates, the UN and any government with even the most moderate climate goals.
Some have screamed an “apocalypse” is coming if Australia pushes for net zero, pointing to Europe’s energy crisis as a harbinger of the supposed doom to come.
But last week, those famous greenies at the International Energy Agency – the world’s most influential energy policy organisation – tried to put those arguments to bed.
In its annual World Energy Outlook, the IEA’s executive director, Fatih Birol, wrote: “Faster clean energy transitions would have helped to moderate the impact of this crisis, and they represent the best way out of it.”
Despite energy analysts saying rising power costs in Australia – and around the world – are due to the cost of gas and coal on international markets, conservatives have consistently made a link to net zero policies.
Last month in the Australian, Nick Cater, the executive director of the Liberal party-aligned Menzies Research Centre, wrote that the cost of energy had gone up “in every country” that had tried to move away from fossil fuels, even before Russia’s invasion of Ukraine.
On an almost daily basis, the Nationals senator and former resources minister Matt Canavan links net zero policies to the pain caused by rising energy costs.
The Liberal leader, Peter Dutton, said in his budget reply speech last week that in Europe “countries are rationing power” and electricity and gas bills were “spiralling out of control”, with pensioners and low-income families having to choose between paying power bills and eating.
According to Dutton, this was “not only because of the invasion of Ukraine, but because governments in several countries in recent years have made catastrophic energy decisions” and had turned off generators “before the technology and system are ready for more renewable energy”.
So what does the IEA have to say on all this?
Birol said analysis for the agency’s report should “dispel some of the mistaken and misleading ideas” that the current crisis “is somehow a clean energy crisis”.
“That is simply not true. The world is struggling with too little clean energy, not too much,” he wrote.
“When people misleadingly blame climate and clean energy for today’s crisis, what they are doing – whether they mean to or not – is shifting attention away from the real cause: Russia’s invasion of Ukraine.”
Experts have told this column that it is the spiralling costs of gas and coal that have underpinned rising prices here, because Australia’s power prices are linked to global commodity markets.
The IEA said in the most affected regions “higher shares of renewables were correlated with lower electricity prices, and more efficient homes and electrified heat have provided an important buffer for some – but far from enough – consumers”.
Russia is the world’s biggest fossil fuel exporter. As countries looked to source oil, gas and coal from elsewhere, this caused a huge spike in costs that continues to reverberate around the globe.
But costs had been rising even before Putin’s invasion.
“Climate policies were blamed in some quarters for contributing to the initial run‐up in prices, but it is difficult to argue that they played a significant role,” the IEA report said.
“In fact, more rapid deployment of clean energy sources and technologies would have helped to protect consumers and mitigate some of the upward pressure on fuel prices.”
The report listed a host of factors contributing to rising prices, including the speed of the economic rebound from the pandemic, droughts in Brazil cutting hydropower, heatwaves in France cutting nuclear output, flooding affecting Australian coal production, and failures by governments to introduce policies to increase clean energy investments.
But could net zero policies have held back investment in fossil fuels? Was this helping to drive up prices even further?
There was, the IEA said, “scant evidence to support the notion that net zero emissions pledges have stifled traditional investments in supply, as these pledges are not yet correlated with changes in fossil fuel spending”.
In 68 countries and the EU where net zero pledges did exist, the IEA analysis showed, fossil fuel investments were at similar levels to 2016.
Changes in investment levels in net zero countries in more recent years were “not noticeably different” from those countries with net zero pledges.
What is the likelihood that the IEA’s report prompted conservatives to pull the plug on their anti-net zero rhetoric? Not likely at all.
Safeguard scheming
“Emission impossible” read the headline on page one of the Daily Telegraph on Thursday, with a story claiming “tens of thousands of jobs” were at risk from the Albanese government’s revamp of a failed Morrison government emissions reduction policy.
The story finds four company submissions to the government’s consultation process on changes to the safeguard mechanism that complain they may not be able to reduce emissions fast enough to avoid paying a penalty under the scheme.
Glencore – predominantly a coalminer – complains some of its facilities may have to close (considering how all analysis shows coal’s days are numbered as the world decarbonises, this is hardly a shock). Alcoa, BlueScope and Opal express doubts they can cut emissions fast enough.
But what the story doesn’t mention is the government’s $15bn national reconstruction fund or the $1.9bn Powering the Regions fund that are, in part, designed to advance technologies to cut emissions in sectors like this.
Nor does it mention that Glencore, Bluescope and Alcoa all have net zero targets by 2050.
Mining giant BHP, with 17 facilities in the safeguard scheme, sees little problem with reaching the targets under the scheme, according to its submission.
Not mentioned by the Daily Telegraph either is that the safeguard mechanism – covering the 215 biggest polluting facilities – was introduced by the Coalition and designed to eventually cut emissions from heavy industry. So far it has failed.
Industrial emissions went up under the Coalition as many companies were allowed to have their pollution limits raised without penalty.
