Net-zero credibility in fantasy policy - from the barely believable to the absurd
In what must rank as one of the most brazen public policy announcements in Australian history, Anthony Albanese, Jim Chalmers and Chris Bowen promised to radically restructure the Australian economy within a decade at zero cost.
Even setting aside the laughable notion that cutting Australia’s 1.1 per cent share of global emissions would make a measurable dent in global climate patterns, the claim was absurd.
Not only would a new plan to slash carbon dioxide emissions by 62-70 per cent from 2005 levels by 2035 cost nothing, it would supposedly be a boon for jobs, growth, incomes and the environment, we were told.
The Treasurer unveiled modelling asserting that the costs of not pursuing net zero would be “significant and consequential” and “exceed” the costs of following the government’s far more coercive plan, an affront to economic principles that suggests individuals and businesses should be free to choose how to invest. Indeed, we are asked to believe that forcing hundreds of billions – ultimately trillions – of dollars into wind and solar, whose intermittency and inefficiency have consistently pushed up power prices wherever they’ve been rolled out, would be cheaper than doing nothing.
For all the talk at the press conference of “the science”, actual science – based on observation and evidence – was nowhere to be found in Treasury’s 54 pages of voodoo economics.
“Across all scenarios, global mitigation action is assumed to be sufficient to ensure global temperatures are kept well below 2C by the end of this century,” the document says.
In other words, Treasury simply assumed the world will achieve net zero by 2050 – a proposition that is patently, and increasingly, false.
According to the International Energy Agency, global carbon dioxide emissions have risen 63 per cent since nations solemnly agreed to cut them at Kyoto in 1997. They have increased almost every year since, including rising by almost 1 per cent last year.
Albanese offered a “fun fact” that China has almost twice as much wind and solar under construction as the rest of the world combined. But this trivia is meaningless; China is big. The climate doesn’t care about national trivia or Treasury’s gushing over 165 “net-zero commitments”. It cares about total emissions – and China began building almost 95GW of new coal power plants last year alone, the highest on record and about four times our entire coal power fleet.
Meanwhile, after trillions of dollars in investment and endless hype, wind and solar together contributed just 3.1 per cent of global energy supply in 2022, according to the IEA. While global emissions may soon plateau, the idea they will collapse to near zero by 2050 is ludicrous. Indeed, electricity demand from artificial intelligence data centres alone is expected to double by 2030 to about 945 terawatt hours – slightly more than all of Japan’s electricity consumption.
Treasury’s modelling hinges on heroic projections of booming demand for “clean energy-embedded export industries” – undefined, non-existent and perhaps too embarrassing to call by their real name: green hydrogen, which had failed repeatedly to deliver commercial returns despite billions in subsidies.
The Soviets would have been proud of Bowen’s grandiose Net Zero Plan, unveiled alongside six Sector Plans “to show industry and investors what the government thinks is the most feasible decarbonisation pathway”. Not pursuing net zero, Treasury warns, would “result in capital misallocation as businesses invest without clear direction”. Heaven forbid businesses invest without government direction!
As esteemed Canadian scientist Vaclav Smil noted last year the world’s first energy revolution – from wood to fossil fuels, or from a less to a more efficient energy source – took two centuries and still wasn’t complete. Almost three billion people today rely primarily on wood, straw and dried dung for cooking or heating. Believing we could replace the “entire energy foundation of modern civilisation” within 25 years, and this time from a more efficient to a less efficient source of energy, was delusional.
Even The New York Times, bastion of fashionable internationalism, published a lengthy piece this week lamenting that “the whole world has soured on climate politics”, noting the obvious collapse of interest in net zero across societies and governments.
In short, there will be no net zero by 2050, and there is no “transition”. The central assumption underpinning the government’s modelling is simply wrong.
Matt Kean, chair of the Climate Change Authority, said the government was “positioning Australia as a global leader on climate ambition”.
If only Treasury had modelled the likely outcome if the world simply ignored Australia’s supposed climate leadership.
It is sad to see our leaders spout such logical and empirical nonsense. Achieving the emissions cuts they propose would require a carbon tax of hundreds of dollars a tonne – more than 10 times the level briefly imposed by Julia Gillard’s government in 2012.
Even if the increasingly hysterical climate forecasts prove accurate, the rational strategy would be to wait, see if the fears are justified, and adapt if necessary, as humans always have. The IPCC itself conceded in 2014 that “changes in income, technology, relative prices, lifestyle, regulation, governance and many other aspects of socio-economic development will have an impact … that is large relative to the impact of climate change”.
Flagging his new targets this week, Bowen said he wanted emissions cuts that make Australians “proud”. He will for right for a time at least; pride may well be the only positive payoff they deliver until the massive economic damage becomes clear.
Adam Creighton is senior fellow and chief economist at the Institute of Public Affairs.
More Coverage
‘A dangerous ideology’: Is the birth culture war putting babies at risk?
Were there any lingering doubts that we’ve entered a post-rational world – where feelings and fantasies govern public policy – they were snuffed out on Thursday when the government told voters that two plus two equals five.