In the Climate Change Authority’s inaugural annual review of Australia’s emission reduction progress, it warned us: “There are some hard decisions and trade-offs we, as a society and as individuals, need to make together for a successful transition to a net zero economy.”
In many cases it will fall to politicians to make these trade-offs on our behalf and there will be a range of people and industries significantly affected.
Those who have depended on secure and well paid jobs in coal power stations and coalmines, for example, will have to find new work. The steel industry will need to completely transform itself to either use recycled scrap or hydrogen instead of coal.
Our agriculture sector will have to find a way to address methane emissions from cattle and sheep. Motor mechanics will find that as we switch over to electric vehicles, demand for their services will decline and many will go out of business.
A small number of those who live in rural areas will find their farmland views substantially and permanently changed by the installation of power lines or wind turbines.
On top of this, the Climate Change Authority pointed out, household gas appliances needed to be phased out by governments.
The response from Chris Bowen was swift. On the ABC’s 7.30 program, the climate change minister effectively said “don’t look at me – that’s the responsibility of state governments”.
This is not true. A phase out of gas appliances requires a nationally agreed law otherwise it could represent a restraint on trade between the states which is outlawed by our constitution. The Victorian government is trying to act through its recently released gas substitution roadmap, but it will be very difficult without Bowen’s help.
Yet let’s imagine the alternative: that Bowen embraced the authority’s recommendation. That he, along with the prime minister and state premiers, announced that within two years residential gas appliances would no longer be available for sale. Once gas heaters, cooktops and water heaters wore out, households would need to replace them with efficient electric alternatives.
There would almost certainly be uproar. He’d be branded radical and reckless. Media outlets would run headlines claiming households would freeze over winter. The measure would be labelled an extreme sovereign risk for investors. No doubt we’d also see claims it was unAustralian and that it would mean the end of the barbecue (even though almost all barbecues would be unaffected).
But is this really a radical decision?
Millions of Australian homes already get by just fine without access to gas. That includes homes in areas exposed to very low overnight temperatures in winter, such as in Tasmania and inland rural areas. In terms of the effectiveness of reverse-cycle air conditioners as heaters – millions of homes across frigid Scandinavia rely on this heat-pump technology to heat their homes.
Yes, I agree, old-style electric resistance cooktops are rubbish. But newer induction cooktops provide a level of precise and quick adjustment that many world leading chefs prefer to use over gas.
And this is a decision that will leave consumers financially better off. A thinktank called the Institute for Energy Economics and Financial Analysis undertook an economic analysis of the impacts of a steady phase-out of gas appliances as they wore out in Victoria (where residential gas use is very significant). It found the phase-out would deliver a net saving of $900 per household after accounting for the increase in the electricity use and financing costs for the electric appliance replacements. Yes, gas pipeline owners would lose out, but their loss of $3.5bn is dwarfed by the economic benefits to the broader community of $17bn from 2023 to 2050.
Another good reason to phase out residential gas is because we need to preserve gas for industries that can’t so easily switch out of this fuel. The reality is Victoria’s offshore gas fields, which have historically been the biggest source of supply across the states of Victoria, South Australia and New South Wales, are running out.
According to the Australian Energy Market Operator’s forecasts, by 2027 Victoria, South Australia and NSW will likely face gas shortages winter that will get progressively worse each subsequent year. By 2030 the overall annual shortfall if governments do not act to phase out gas in favour of electric alternatives is estimated to be around 20 petajoules of gas under Aemo’s central step change scenario.
To put that into perspective, it is equal to about 13 winter days without any gas at all. Although, in practice, it wouldn’t involve going completely without gas for entire days but instead would necessitate rationing it over many more days over winter.
If our energy and climate change minister thinks a decision to phase out residential gas appliances is too hard, then we really should just give up on the net zero goal. In the overall scheme of the decisions and trade-offs we need to make to reach net zero, this is one of the easiest.
Tristan Edis is a director at Green Energy Markets – a provider of analysis and advice on energy and carbon abatement policy and markets
