Albanese is off message on reality of energy transition

The Albanese government increasingly is looking and sounding tone deaf, ramping up its rhetoric on global climate action as the world becomes increasingly distracted and daunted by the reality of the task. The latest example is the Prime Minister’s “intervention” at a G20 session on the energy transition in Brazil. There is an element of magical thinking in Anthony Albanese’s desire to “help growing economies realise the benefits of industrialisation, while delivering on their commitments to decarbonisation. And in doing so, diversifying our exports, deepening our trade ties and building supply chain resilience”. For Australia, the experience to date has been one of cost overruns and project delays, as well as what Frontier Economics says has been an underestimation, by hundreds of billions of dollars, in the cost of decarbonisation. In a report commissioned by the Coalition, Frontier found the cost of replacing coal-fired power generation with a solar- and wind-powered National Energy Market would be $642bn. This is more than half a trillion dollars more than the $122bn price tag touted by Labor for a renewable NEM.

US president-elect Donald Trump, meanwhile, has selected as energy secretary Chris Wright, a leading figure in the shale oil and gas revolution that delivered the US energy self-sufficiency and gas prices that are a fraction of what is being paid by industry elsewhere, including in Australia. Mr Wright is opposed to the Paris Agreement on climate action, as is Mr Trump. This is likely to increase the cost burden on other nations, including Australia, to foot the bill now being negotiated by Chris Bowen at the COP29 climate meeting in Baku, Azerbaijan. China has led a group of 77 developing nations to demand developed countries agree to pay $US130 trillion ($200 trillion) a year to help the developing world deal with climate change. Climate groups want the money to be delivered as grants rather than loans, and the Baku talks are discussing putting 20 per cent of the money through the Green Climate Fund, which has a history of delinquent decision-making.

The Baku talks reportedly are making slow progress, as is Australia’s bid to host a joint COP with Pacific Island nations in 2026. Rival bidder Turkey is refusing to back down on its bid, and it is possible no decision will announced at this week’s gathering in Azerbaijan. Turkey’s biggest contribution to the UN Framework Convention on Climate Change to date has been to argue it should be considered a recipient developing nation, not a contributor developed one, as it was initially listed.

With Mr Trump back in the White House, it is likely much will change between now and COP31. In the meantime, Mr Albanese has been posing alongside British Prime Minister Keir Starmer, who has pledged his country to an emissions reduction target of 81 per cent by 2035, despite being off track to meet its existing pledge for 2030. Back in the real world, industry is warning that the failure to prioritise gas as a transitional fuel will result in the greater and longer use of coal. Glencore chief executive Gary Nagle has urged the Albanese government to slow the transition from coal to renewables or risk falling behind other nations that are prioritising cheap energy. He says the costs for Glencore’s metals business in Queensland are double, or more, than those in India, China, Canada and the US. His comments coincide with a refreshing call by BHP president Geraldine Slattery for corporate leaders to publicly advocate for policies that would make Australian enterprise globally competitive.

Top of the list must be reliable and affordable energy. Mr Bowen continues to see the energy transition through the prism of domestic politics and international. diplomacy. In response to Mr Nagle’s comments on coal, he said the Albanese government was “acting in the national economic interest by seeking to take advantage of the global energy transition and capitalise on our abundant renewable resources, from our sun and wind to our critical minerals and Aussie know-how”. He said the government was “delivering an orderly and responsible transition that the former ­Coalition government failed to do”. At some point, politicians from all sides must recognise they are running out of time and options to find a credible solution to what has become a wicked energy problem.