Cost-benefit needed on net zero

At every turn the cost and timetable for the much-vaunted transition to net zero gets bigger and longer, with insufficient attention paid to value. The latest report from Net Zero Australia puts the cost at $1.5 trillion by the end of the decade, with the need for $7 trillion to $9 trillion of capital by 2060. According to the group’s study – conducted by interdisciplinary teams from the University of Melbourne, the University of Queensland, Princeton University and management consultancies Nous and Evolved Energy – achieving net zero will require growing renewables as our main domestic and export energy source to 40 times current national electricity market capacity. One striking feature of the report is the scale of industrialisation slated for large parts of the Northern Territory and outback Western Australia.

The report concedes that investment is much higher in the net-zero transition than continuing to use fossil fuels. But it says decarbonisation will reduce our reliance on gas and oil imports. Instead, the transition will require a large fleet of batteries, pumped hydro and gas-fired firming. Development of a large carbon capture, use and storage industry will be vital, as well as greatly expanded energy transmission and distribution networks. The group sees no role for nuclear unless costs fall sharply and renewables are constrained.

The vision outlined in the Net Zero Australia report mirrors the one put forward by former chief scientist Alan Finkel, who sees forests of wind farms carpeting hills and cliffs from sea to sky as well as endless arrays of solar panels disappearing like a mirage into the desert. The reality is energy industry experts are warning the federal government has no chance of meeting its 2030 targets. Projects that have been promised are years behind schedule and billions of dollars over budget. Snowy Hydro 2.0 provides a salutary lesson in the gulf that can exist between vision and reality. And key to the delivery of the economic benefits outlined in the latest report is success in developing a feasible export hydrogen industry, something that has yet to happen. Meanwhile, those calling loudest for the transition say it will require an effort in line with the US-led Marshall Plan to rebuild Europe after World War II. This suggests that as the timeline gets shorter, governments will be more prepared to sacrifice liberties to get their way. Already, this is being tested by community opposition to transmission line projects and proposals for offshore wind developments.

The transition to net zero requires a proper cost-benefit appraisal. And it must be guided by what is happening globally. Increasingly there are signs that once-determined governments in Europe and elsewhere are struggling to hold the line on net zero. And latest reports on China from Australian National University research is that carbon dioxide emissions are growing faster in the world’s highest emissions nation than before the pandemic, with power generation and industry driving the increase. China’s emissions increased by 2.7 million tonnes a day in the first quarter of 2023 compared with the first three months of 2019. This means the annual increase in China is more than double Australia’s total emissions of 463 million tonnes last year.