Responding to the energy crisis — and beyond.

Wilson Inlet, WA. A delicate ecosystem essential for migratory birds, now threatened by rapid rainfall loss

The current energy crisis is focussing a lot of minds on likely causes and possible solutions. The new Labor government has made a promising start by meeting with the States and finding consensus on a number of partial solutions. Chris Bowen, the new Minister for Climate Change and Energy is being honest in saying that there are no quick solutions.

Labor’s ascension to government will possibly put an end to the climate wars — ending a major impediment to the rational policy-making that is so desperately needed to address the crisis. But the most rational and probably single most effective policy option will take some time to recover from being the principal target of the war. Carbon pricing was badly wounded and will need active rehabilitation in the face of ongoing misinformation and junk science dragging climate policy into wider culture wars around the globe.

The current energy crisis is partially the result of governments choosing short-to-medium-term policies and avoiding the long-term solution offered by a price on carbon. They have also favoured smaller piecemeal policies over a comprehensive economy-wide carbon price. And importantly, they chose taxpayer-funded policies ahead of a carbon price that puts the costs of climate change back into the price of fossil fuels.

Labor chose to pursue a piecemeal approach to climate policy prior to the election as an understandable protection from further political attack. They undertook to adopt a pragmatic sector-by-sector approach, making policies for each of the 8 carbon-emitting sectors of the economy. This may have been good politics at the time, but it is not good climate policy. It leaves us vulnerable to many years of partial progress when the climate crisis needs comprehensive policies to address the root cause of the crisis — continuing growth of fossil fuel production and consumption.

Australia needs to restore carbon pricing as a viable policy option and recognise its value as a comprehensive policy that can underpin a steady and orderly decarbonisation, almost by itself. We cannot allow its past value as a political weapon in brutal retail politics to cut us off from such a powerful policy instrument.

The alternative is continuing piecemeal policies that will struggle to meet Labor’s targets and will certainly be too little to keep us on track for 1.5 degrees of warming.

A robust carbon price is also needed for Australia’s security; our energy security and national security. Both are endangered by our dependence on trading in fossil fuels. Much has been made of the fact that Australia has an abundance of energy resources, fossil and renewable, but still manages to have a shortage! This would not be happening if a carbon price had underwritten a much larger investment in renewables and storage. Our dependence on oil imports and vulnerability to the effects of global gas prices would both be significantly less.

Russia’s invasion of Ukraine has revealed just how destabilising fossil fuel trading can be. Geopolitics have been powerfully influenced by oil trading since long before the oil shocks of the 1970’s and 80’s. They have contributed to many international conflicts and the current one is no exception. Australia is in a good position to become self-sufficient in renewable energy and to no longer depend on oil imports. An abundance of cheap renewable electricity could soon replace domestic gas so that global shortages and price volatility would no longer be an issue.

Energy prices have also added to the current surge of inflation. The sooner Australia passes 100% renewables we can remove energy and fossil fuels from our list of inflationary concerns.

Also in the news is the government’s support for Woodside’s Scarborough gas project, a major expansion in fossil fuel production at a time when contraction is essential for decarbonising the global economy. A carbon price would make it uneconomic for Woodside to proceed and encourage it to further invest in hydrogen and renewables and other post-carbon initiatives.

Australia’s governments have long tried to avoid climate solutions that involve any pain or cost and have tried to do the impossible — support the fossil fuel industry and decarbonise at the same time.

Consequently, we have hundreds of policies attempting to protect our climate and environment from the damage being done by the industries that other policies are directly supporting. By trying to avoid pain we are applying the brakes and the accelerator at the same time, creating more pain for all.

A steadily-rising carbon price is the least painful way to underpin the transition to zero carbon, even for the industry itself. Guiding fossil fuels towards zero describes how “Even the industry benefits by having a clear incentive for an orderly transition away from high-risk, high emissions operations and the hugely disruptive consequences of accelerating climate disasters.”

We have a fresh new government and the opportunity to put a suite of rational policies in place that enable us to join the global race to zero emissions. Putting carbon pricing back in the policy mix is essential if we are to protect our world so that our descendants can thrive and prosper.