Submission to the Review of Climate Change Policies 2017

May 4, 2017May 11, 2018 itdunlop

Contents:

Preamble
The Key Issue – Existential Risk
The Rapidly Changing Context of Global Climate Change
Practical Implications
The Australian Context
Existential Risk Management
Reframing Australia’s Climate Change & Energy Policies

Author: Ian Dunlop

Ian Dunlop has wide experience in energy resources, infrastructure, and international business, for many years on the international staff of Royal Dutch Shell. He has worked at senior level in oil, gas and coal exploration and production, in scenario and long-term energy planning, competition reform and privatization.

He chaired the Australian Coal Associations in 1987-88. From 1998-2000 he chaired the Australian Greenhouse Office Experts Group on Emissions Trading which developed the first emissions trading system design for Australia. From 1997 to 2001 he was CEO of the Australian Institute of Company Directors. Ian has a particular interest in the interaction of corporate governance, corporate responsibility and sustainability.

An engineer from the University of Cambridge (UK), MA Mechanical Sciences, he is a Fellow of the Australian Institute of Company Directors, the Australasian Institute of Mining and Metallurgy and the Energy Institute (UK), and a Member of the Society of Petroleum Engineers of AIME (USA).

Ian is a member of the Board of the ARC Centre of Excellence for Climate System Science based at UNSW. He is a Director of Australia 21, Deputy Convenor of the Australian Association for the Study of Peak Oil, a Fellow of the Centre for Policy Development, a Member of The Club of Rome and a member of Mikhail Gorbachev’s Climate Change Task Force. He advises and writes extensively on governance, climate change, energy and sustainability. He was a candidate in 2013 and 2014 to join the Board of BHP Billiton on a climate change and energy platform.

Preamble

Thank you for the opportunity to make a submission on Australia’s Climate Change Policies as part of the 2017 Review.

The Review Discussion Paper states that the Australian Government is “committed to addressing climate change —-“ and “is playing its role in global efforts to reduce emissions —-“ with “among the strongest targets of major economies (on a per capita basis) —–“.

Frankly that is a completed misrepresentation of Australia’s position over recent years, and particularly during the tenure of the present government, for the following reasons:

The objective of the December 2015 Paris Climate Agreement is to to hold global average temperature to “well below 2⁰C above pre-industrial levels and to pursue efforts to limit the increase to 1.5⁰C” ^[1]. A realistic assesment of the latest scientific and engineering mechanisms to achieve this objective indicates that, due to global inaction historically, it is now impossible to stay below 1.5^oC, and it will require an extremely rapid, unprecedented technological, economic and societal transformation to have any chance of staying below even 2^o
Australia signed and ratified the Paris Agreement, presumably accepting the necessity of addressing climate change urgently and achieving its objective . However our INDC emission reduction commitments, far from being among the strongest, when viewed in absolute terms are laughable, both in comparison with our peers globally, and in making a fair contribution to the Paris challenge.
Subsequent to Paris, the Federal Government has done its utmost to ensure the Paris objective will never be met by impeding the Australian transformation to a low carbon economy, favouring our traditional fossil fuel industries and discouraging rapid renewable energy innovation on the spurious grounds of “preserving energy security”. Our progress in taking up renewable energy is in spite of government policy, not because of it.
But most damning is the proposed opening up of an entire new coal province in Queensland’s Galilee Basin. This would be initiated with the Adani Carmichael coal mine, the largest ever built in Australia if it proceeds, with another six mines being contemplated. Most of this coal would be exported, but some earmarked for a new power station to underpin the development of Northern Australia.
This is hypocrisy at its worst. The domestic emissions from these coal developments would totally counteract our Paris INDC obligations for a start. But the global implications would be far more damaging, as one or two of these mines alone would ensure the world could never meet the Paris objective.

Only a government which does not believe anthropogenic climate change is a real issue, and has no intention of taking serious action, could have taken such positions. Previous governments of both political persuasions have been guilty of similar hypocrisy, with the result that the policies that do exist today are a dysfunctional and disconnected shambles brought about by years of denial and inaction. They are the cause of our so-called “energy crisis”.

The Review Discussion Paper, as so often with the climate change debate in Australia, defaults to important but essentially secondary sectoral issue. It ignores the threshold policy determinant, and that is the urgency with which we must address climate change.

Time is of the essence. If the world seriously intends to address climate change, then far more urgent action is required than we are seeing thus far, particularly from Australia, who is a notable laggard despite the fact that we are one of the countries most exposed to climate risk.

In reality, it demands emergency action, akin to placing economies on a war-footing. We have left it too late to achieve a smooth transition to a lower-carbon economy. The rationale for this view is set out below:

The Key Issue – Existential Risk

Climate change is about global risk management. Government policy, and the Discussion Paper, fails to recognise that climate risk is an existential risk beyond the conventional risk management experience of corporates, investors, financial markets and regulators. It is an unprecedented challenge to humanity.

The concept of existential risk is not understood or accepted in our political and policy considerations:

It is a risk posing permanent large negative consequences to humanity which can never be undone. One where an adverse outcome would either annihilate intelligent life or permanently and drastically curtail its potential ^[2] ^[3].

Expert opinion considers this is the risk we are now exposed to unless we rapidly reduce global carbon emissions. Our current global emission trajectory would lead to a temperature increase in the 4-5^oC range, a world which would be “incompatible with an organised global community”, with global population dropping from 7 billion to below 1 billion as the impact of climate extremes takes effect ^[4]. The World Bank has pointed out that “There is no certainty adaptation to a 4^oC world is possible” ^[5].

Even the 2.7 – 3.5^oC outcome which would eventuate if current voluntary Paris commitments were implemented, would result in outright social chaos in many parts of the world. The US Military Advisory Board warns against a “failure of imagination” in thinking through these implications of climate change ^[6], which is exactly what is occurring in Australia at present. This is particularly dangerous given our exposure to climate risk.

Existential risk requires fundamentally different risk, and opportunity, management from conventional practice. This should be the over-riding consideration determining the climate change policies which Australia now requires.

The Rapidly Changing Context of Global Climate Change

Any balanced assessment of the climate science and evidence accepts that climate change is driven primarily by human carbon emissions from fossil fuel combustion, agriculture and land clearing, superimposed on natural climate variability, and that it is happening faster and more extensively than previously anticipated.

In this context, scientists have long been concerned about the extreme “tipping point” risks of the climate system; non-linear positive feedbacks which trigger rapid, irreversible and catastrophic change.

These feedbacks are now kicking in. For example, Arctic weather conditions are becoming increasingly unstable as jetstream fluctuations warm the region 20⁰C or more above normal levels; sea ice is at an all-time low with increasing evidence of methane emissions from melting permafrost ^[7]. Greenland and Antarctic ice sheets are melting at worst-case rates ^[8], with the potential for several metre sea level rise this century ^[9]. The Antarctic Larsen ice sheet and Pine Island glacier are showing signs of major breakup as a result of warming Southern Ocean waters, a process which is probably now irreversible [10] ^[11]. Coral reefs around the world, not least the Australian Great Barrier Reef, are dying off as a result of record high sea temperatures ^[12]. Global temperature increases are accelerating, with 2016 being the hottest year on record [13] [14]. Major terrestrial carbon sinks are showing signs of becoming carbon emitters ^[15]. And much more.

The social disruption and economic consequences are already devastating, leading to extensive forced migration and economic collapse in some countries. The refugee crisis engulfing Europe, emanating from Syria and North Africa, is fundamentally climate change driven ^[16] and a precursor of greater conflict ahead. The viability of the Middle East in toto is questionable in the circumstances now developing [17] [18]. Major centres of economic activity, such as the Pearl River Delta, responsible for 40% of China’s exports, the Mekong River Delta and other parts of SE Asia are now under threat from climate-induced sea level rise prior to 2050 [19]. This has profound implications for Australia’s future.

Practical Implications

The Paris Agreement, the successor to the Kyoto Protocol, came into force on 4^th November 2016. It requires the 195 countries participating to hold global average temperature to “well below 2⁰C above pre-industrial levels and to pursue efforts to limit the increase to 1.5⁰C” ^[20]. Regional temperature variations would be far greater than these global averages, rendering many parts of the world uninhabitable even at 2⁰C, beyond the capacity of human physiology to function effectively.

Without rapid carbon emission reductions far greater than Paris commitments, the planet will become ungovernable. Dangerous climate change, which the Paris Agreement and its forerunners seek to avoid, is happening at the 1.2⁰C increase already experienced as extreme weather events, and their economic costs, escalate. The negative impact on human health is already substantial ^[21] ^[22].

It is impossible to stay below the 1.5⁰C Paris aspiration. To have a realistic chance, say 90%, of staying below even 2⁰C, rather than the unrealistic 50-66% chance upon which official analyses are based, means that there is no global carbon budget remaining today. Thus no new fossil fuel projects can be built globally, that existing operations, particularly coal, have to be rapidly replaced with low carbon alternatives, and that carbon sequestration technologies which do not currently exist have to be rapidly deployed at scale ^[23] ^[24]. Even accepting the 50-66% risk levels excludes new projects in toto.

Most dangerously, the climate impact of investments made today do not manifest themselves for decades to come. If we wait for catastrophe to happen, as we are doing, it will be too late to act. However governments, business and investors are complacently allowing the continuation of such investment on the basis that the 2⁰C limit is some way off, with a substantial carbon budget still remaining. Neither proposition is correct and the existential risk implications are being ignored. Indeed, in circumstances of high uncertainty, which is the case currently with tipping points, even greater precautions should be taken than might be the case with better scientific knowledge.

The transition to a low-carbon economy is unprecedented. We have the technology, the expertise, wealth and resources to make it happen. What we lack is the maturity to set aside political ideologies and corporate vested interests to cooperate in the public interest.

And most importantly, time. Any realistic chance of avoiding catastrophic outcomes, requires emergency action to force the pace of change, starting with a serious price on carbon to remove the massive subsidy propping up fossil fuels. The irony is that this transition is the greatest investment opportunity the world has ever seen and Australia has some of the best low-carbon resources to benefit from it.

These views are not irrational alarmism. They may be regarded as extreme relative to mainstream debate within the corporate, financial and investment communities. However they are well-grounded in the science and evidence, as set out in more depth in the “Climate Reality Check” paper referenced [25] and in the increasingly outspoken views of leading scientists [26].

The Australian Context

As the Prime Minister’s speech to the National Press Club on 1^st February 2017 [27] implied, although this was not stated, climate and energy policy must be integrated and treated holistically, not in silos as we have beeen doing.

He emphasised the need for “affordable, reliable and secure energy”, denounced the States for their “unrealistic” renewable targets, encouraged energy storage, but then placed the emphasis back on coal. Priority would be given to “clean coal and carbon capture and storage (CCS) and onshore gas (CSG)”, implying that renewables were neither affordable or reliable. Further “The next incarnation of our energy policy should be technology agnostic – it’s security and cost that matter, not how you deliver it. Policy should be ‘all of the above technologies’ working together to meet the trifecta of secure and affordable power while meeting our substantial emission reduction commitments”.

This approach ignores numerous inconvenient realities.

First, the speech skirted around our biggest risk, namely accelerating climate change. Whilst Australia ratified the Paris Climate Agreement, our emission reduction commitments are not “substantial”. They are laughable both in comparison with our peers globally, and to have any chance of making a fair contribution to the Paris objective..

Second, to have a realistic chance, say 90%, of meeting the Paris objectives, the world should no longer emit any carbon to atmosphere. We still emit record amounts today and need some fossil fuels to build the new low-carbon economy, so that is not going to happen. But emissions must peak and decline rapidly. There is no space for any new fossil fuel projects, coal, oil or gas.

Third, “clean coal” is neither new nor clean. These technologies can reduce emissions by up to 40% relative to conventional practice, but that does not solve our problem when the global carbon budget has already been exhausted. Further, costs are increased by up to 30%, rendering coal even less competitive with renewables.

Fourth, years of research have failed to establish the basis for CCS expansion at scale. CCS works where emissions are stored in depleted oil and gas reservoirs, which the oil industry has practised for decades. Storage in other types of geological structures is far harder. The few commercial operations in the world today are in the former category. The substantial additional costs of CCS again reduce coal’s competitiveness, particularly if you refuse to price carbon, as the government are doing. CCS will be useful at the margin, but it will not save fossil fuels from their inevitable demise.

Fifth, energy prices rose largely because our flawed regulatory framework allowed power companies to invest in unnecessary infrastructure on which they were guaranteed a return. Gas prices rose because the East Coast was opened up to the higher priced international gas market with the construction of export facilities at Gladstone. The unseemly rush into CSG resulted in substantial processing overcapacity, with economic pressure increasing as CSG production was constrained by community objection to the damage caused to arable land and water. Further, high methane leakage rates result in CSG having a greater warming effect than using coal, thereby negating its supposed benefit.

Sixth, there is nothing “agnostic” about choosing energy sources when the fossil fuel industry continues to enjoy a massive subsidy, far greater than renewables, by the lack of carbon pricing. A subsidy the IMF estimate to be around 60% of coal’s market price [28]. And this is the nub of the problem. Our climate and energy policies are a disconnected and dysfunctional shambles, brought about by years of denial and inaction from Federal Governments of both persuasions who do not accept that climate change is happening.

But that game is up. Climate change has moved from the twilight phase of much talk and relatively limited impact. It is now turning nasty. Events are moving faster than expected as irreversible climate tipping points are crossed. The economic and social costs of inaction can no longer be swept under the carpet, with regulators here and overseas demanding action to head off a climate-induced financial crisis.

The only way we can avoid catastrophic climate impact now is to initiate emergency action, akin to a war-footing. That will be accepted before long as impacts bite and low carbon technology undermines the fossil fuel industry

Our antiquated electricity grids are undoubtedly in need of overhaul, but 100% renewable grids are being constructed around the world in only a few years, providing genuine energy security and making traditional concepts of base-load power irrelevant.

As for affordability, energy prices will rise given the extent and speed of change. It is irresponsible to suggest otherwise. However they will rise less with renewables than with coal, with greater prospects of cost reduction as technology improves.

We need a new narrative, built around our potential to prosper as a low-carbon society. We have the world’s best renewable resources, the science, the technology and engineering expertise to seize what is the biggest investment and job-creation opportunity this country has ever seen. Government policy has been preventing that opportunity from being realised.

Existential Risk Management

The risks outlined above require that existential risk should now be the primary consideration in managing climate change and energy policy. That policy should be built around existential risk management unlike anything being contemplated officially at present. The components would encompass:

Normative Goal Setting. “Politically realistic”, incremental change from “business-as-usual” is not tenable. This must be replaced with a normative view of limits which must be adhered to if catastrophic consequences are to be avoided, based on the latest science. Action is then determined by the imperative to stay within the limits, not by incremental, art-of-the-possible, change from business-as-usual.
Change Mindsets, to now regard the climate change challenge as a genuine global emergency, to be addressed with an emergency global response.
Genuine Global Leadership. Current responses reflect the dominance of managerialism – an emphasis on optimising the conventional political and corporate paradigms by incremental change, rather than adopting the fundamentally different normative leadership needed to contend with the potential for catastrophic failure.
Integrated Policy. Climate change, though difficult, is only one of a number of critical, inter-related, issues now confronting the global community, which threaten the sustainability of humanity as we know it. Rather than viewing these issues separately in individual “silos” as at present, integrated policy is essential if realistic solutions are to be implemented. Climate and energy policy needs to fit within a systemic Australian approach to emergency action.

There needs to be an honest articulation of the catastrophic risks and the integrated sustainability challenge we now face, with extensive community education to develop the platform for commitment to the major changes ahead. That has not happened thus far.

Reframing Australia’s Climate Change and Energy Policies

I request that the Review of Climate Change Policies recognises and acts upon the following in developing their final recommendations:

Climate and Energy policy must be integrated and addressed holistically rather than in separate silos as they have been historically
Climate change already poses an existential risk to global economic, financial and societal stability. As such, addressing climate change must become the primary determinant of climate and energy policy
To limit temperature increase within globally agreed objectives, emergency action is now inevitable which must include economic instruments such as sensible carbon pricing, despite being repeatedly ruled out by successive governments.
Emission reduction objectives should be recast accordingly.
Existential risk management techniques are required which fundamentally differ from conventional practice.

All new fossil fuel investment should cease, particularly development of the Adani mine, the Queensland Galilee Basin coal province in general and CSG.

Emphasis must be placed on urgent programmes to transition to genuine low carbon energy sources.

Ian T Dunlop

Sydney

Australia

————-

References

[1] UNFCCC Paris Agreement Article 2:

https://unfccc.int/resource/docs/2015/cop21/eng/l09r01.pdf

[2] Existential Risk Prevention as a Global Priority”, Nick Bostrom, Oxford University, February 2013:

http://www.existential-risk.org/concept.pdf

[3] “Global Catastrophic Risks”, Bostrom & Cirkovic, OUP 2008:

http://www.global-catastrophic-risks.com/book.html

[4] http://grist.org/climate-change/2011-12-05-the-brutal-logic-of-climate-change/

[5] “Turn Down the Heat”, World Bank 2011:

http://documents.worldbank.org/curated/en/865571468149107611/pdf/NonAsciiFileName0.pdf

[6] “National Security and the Accelerating Risks of Climate Change”, Military Advisory Board, CNA Corporation, May 2014:

https://www.cna.org/CNA_files/PDF/MAB-201406508.pdf

[7] https://nsidc.org/arcticseaicenews/2016/12/arctic-and-antarctic-at-record-low-levels/

[8] http://www.smh.com.au/environment/sealevel-expert-john-church-resurfaces-at-university-of-nsw-amid-new-warning-signs-from-greenland-20161207-gt5qje.html

[9] https://www.theguardian.com/science/2016/mar/22/sea-level-rise-james-hansen-climate-change-scientist

[10] Antarctic tipping points for a multi-metre sea level rise, David Spratt, February 2017:

http://www.breakthroughonline.org.au/papers

[11] http://mashable.com/2016/12/03/nasa-photo-crack-larsen-c-ice-shelf/#GlKFT3rWbmqE

[12] https://www.theguardian.com/environment/2016/dec/09/great-barrier-reef-not-likely-to-survive-if-warming-trend-continues-says-report?utm_source=esp&utm_medium=Email&utm_campaign=GU+Today+AUS+v1+-+AUS+morning+mail+callout&utm_term=203508&subid=13317484&CMP=ema_632

[13] 2016 Warmest Year on Record Globally, NASA/NOAA, January 2017:

https://www.nasa.gov/press-release/nasa-noaa-data-show-2016-warmest-year-on-record-globally

[14] Global Heat Record Broken Again, Climate Council, January 2017:

https://www.climatecouncil.org.au/2016-hottest-year-report

[15] https://www.washingtonpost.com/news/energy-environment/wp/2016/11/30/the-ground-beneath-our-feet-is-poised-to-make-global-warming-much-worse-scientists-find/?utm_term=.2b40ab750c08

[16] http://www.pnas.org/content/112/11/3241.full

[17] The Roasting of the Middle East – Infertile Crescent, The Economist, 6^th August 2016

http://www.economist.com/news/middle-east-and-africa/21703269-more-war-climate-change-making-region-hard-live-infertile

[18] Extreme Heatwaves could push gulf climate beyond human endurance, The Guardian 26^th October 2015:

https://www.theguardian.com/environment/2015/oct/26/extreme-heatwaves-could-push-gulf-climate-beyond-human-endurance-study-shows

[19] How climate change will sink China’s manufacturing heartland, David Spratt & Shane White, 10^th August 2016:

http://www.climatecodered.org/2016/08/how-climate-change-will-sink-chinas.html

[20] UNFCCC Paris Agreement Article 2:

https://unfccc.int/resource/docs/2015/cop21/eng/l09r01.pdf

[21] The Lancet Commission:

http://www.thelancet.com/pdfs/journals/lancet/PIIS0140-6736(16)32124-9.pdf

[22] Australian Academy of Science, Climate Change Challenges to Health:

https://www.science.org.au/supporting-science/science-sector-analysis/reports-and-publications/climate-change-challenges-health

[23] “Climate Reality Check”, David Spratt & Ian Dunlop, Breakthrough Institute, Melbourne, June 2016:

http://www.breakthroughonline.org.au/papers

[24] The Sky’s Limit, Oil Change International, September 2016:

http://priceofoil.org/content/uploads/2016/09/OCI_the_skys_limit_2016_FINAL_2.pdf

[25]ibid “Climate Reality Check”, David Spratt & Ian Dunlop, Breakthrough Institute, Melbourne, June 2016:

[26] “The World’s Biggest Gamble”, Johan Rockstrom, Hans Joachim Schellnhuber et al, AGU October 2016:

http://onlinelibrary.wiley.com/doi/10.1002/2016EF000392/abstract

[27] https://www.pm.gov.au/media/2017-02-01/address-national-press-club

[28] Getting Energy Prices Right, International Monetary Fund, July 2014:

https://www.imf.org/external/pubs/cat/longres.aspx?sk=41345.0

Submission to the Finkel Review of the National Energy Market

March 3, 2017May 11, 2018 itdunlop

Contents:

Preamble

The Key Issue – Existential Risk

The Rapidly Changing Context of Global Climate Change

Practical Implications

The Australian Context

Existential Risk Management

Request to Expert Panel

Preamble

Thank you for the opportunity to comment on the Preliminary Report into the Future Security of the National Energy Market. I congratulate the Expert Panel on a comprehensive analysis of the challenges faced by our ageing electricity grid system, the need for extensive reform to address the realities of 21^st Century energy supply and the technological and market options available.

However I suggest that there is an overarching issue which the Preliminary Report does not adequately address, and that is the urgency with which we must address climate change, which in turn defines the context in which reform of the NEM should take place.

Time is of the essence. It seems unlikely, given the lack of action to date and the accelerating pace of climate change, that global average surface temperatures can now be held below the 1.5^oC to 2^oC range adopted in the 2015 Paris Climate Change Agreement which Australia has ratified. If the world seriously intends to address climate change, then far more urgent action is required than we are seeing thus far, particularly from Australia who is a notable laggard in its emission reduction commitments.

In reality, it demands emergency action, akin to placing economies on a war-footing. We have left it too late to achieve a smooth transition to a lower-carbon economy. Reform of the NEM has a critical role to play in this process, but it must be set against realistic emission reduction objectives far more stringent than the Government’s current emission reduction targets.

The rationale for this view is set out below:

The Key Issue – Existential Risk

The Preliminary Report does not recognise that climate risk is an existential risk beyond the conventional risk management experience of corporates, investors, financial markets and regulators. It is an unprecedented challenge to humanity.

As such it requires fundamentally different risk, and opportunity, management from conventional practice. In turn this should be the over-riding consideration determining the extent and speed of reforming the NEM.

The Rapidly Changing Context of Global Climate Change

These feedbacks are now kicking in. For example, Arctic weather conditions are becoming increasingly unstable as jetstream fluctuations warm the region 20⁰C or more above normal levels; sea ice is at an all-time low with increasing evidence of methane emissions from melting permafrost ^[1]. Greenland and Antarctic ice sheets are melting at worst-case rates ^[2], with the potential for several metre sea level rise this century ^[3]. The Antarctic Larsen ice sheet and Pine Island glacier are showing signs of major breakup as a result of warming Southern Ocean waters, a process which is probably now irreversible [4] ^[5]. Coral reefs around the world, not least the Australian Great Barrier Reef, are dying off as a result of record high sea temperatures ^[6]. Global temperature increases are accelerating, with 2016 being the hottest year on record [7] [8]. Major terrestrial carbon sinks are showing signs of becoming carbon emitters ^[9]. And much more.

The social disruption and economic consequences are already devastating, leading to extensive forced migration and economic collapse in some countries. The refugee crisis engulfing Europe, emanating from Syria and North Africa, is fundamentally climate change driven ^[10] and a precursor of greater conflict ahead. The viability of the Middle East in toto is questionable in the circumstances now developing [11] [12]. Major centres of economic activity, such as the Pearl River Delta, responsible for 40% of China’s exports, the Mekong River Delta and other parts of SE Asia are now under threat from climate-induced sea level rise prior to 2050 [13]. This has major implications for Australia’s future.

Practical Implications

The Paris Agreement, the successor to the Kyoto Protocol, came into force on 4^th November 2016. It requires the 195 countries participating to hold global average temperature to “well below 2⁰C above pre-industrial levels and to pursue efforts to limit the increase to 1.5⁰C” ^[14]. Regional temperature variations would be far greater than these global averages, rendering many parts of the world uninhabitable even at 2⁰C, beyond the capacity of human physiology to function effectively.

It is probably impossible to stay below the 1.5⁰C Paris aspiration. To have a realistic chance, say 90%, of staying below even 2⁰C, means that no new fossil fuel projects can be built globally, that existing operations, particularly coal, have to be rapidly replaced with low carbon alternatives, and that carbon sequestration technologies which do not currently exist have to be rapidly deployed at scale ^[17] ^[18].

The transition to a low-carbon economy is unprecedented. We have the technology, the expertise and wealth to make it happen. What we lack is the maturity to set aside political ideologies and corporate vested interests to cooperate in the public interest.

These views are not irrational alarmism. They may be regarded as extreme relative to mainstream debate within the corporate, financial and investment communities. However they are well-grounded in the science and evidence, as set out in more depth in the “Climate Reality Check” paper referenced [19] and in the increasingly outspoken views of leading scientists [20].

The Australian Context

The Prime Minister’s National Press Club speech on 1^st February 2017 [21] emphasised the need for “affordable, reliable and secure energy”, denounced the States for their “unrealistic” renewable targets, encouraged energy storage, but then placed the emphasis back on coal. Priority would be given to “clean coal and carbon capture and storage (CCS) and onshore gas (CSG)”, implying that renewables were neither affordable or reliable. Further “The next incarnation of our energy policy should be technology agnostic – it’s security and cost that matter, not how you deliver it. Policy should be ‘all of the above technologies’ working together to meet the trifecta of secure and affordable power while meeting our substantial emission reduction commitments”.

This approach ignores numerous inconvenient realities.

Sixth, there is nothing “agnostic” about choosing energy sources when the fossil fuel industry continues to enjoy a massive subsidy, far greater than renewables, by the lack of carbon pricing. A subsidy the IMF estimate to be around 60% of coal’s market price [22]. And this is the nub of the problem. Our climate and energy policies are a disconnected and dysfunctional shambles, brought about by years of denial and inaction from Federal Governments of both persuasions who do not accept that climate change is happening.

Existential Risk Management

Climate change is existential risk management on a global scale. The risk implications outlined above require that existential risk should now be the primary consideration in managing climate change and NEM reform. It should be built around existential risk management policy unlike anything being contemplated officially at present. The components would encompass:

Normative Goal Setting. “Politically realistic”, incremental change from “business-as-usual” is not tenable. This must be replaced with a normative view of limits which must be adhered to if catastrophic consequences are to be avoided, based on the latest science. Action is then determined by the imperative to stay within the limits, not by incremental, art-of-the-possible, change from business-as-usual.

Change Mindsets, to now regard the climate change challenge as a genuine global emergency, to be addressed with an emergency global response.

Genuine Global Leadership. Current responses reflect the dominance of managerialism – an emphasis on optimising the conventional political and corporate paradigms by incremental change, rather than adopting the fundamentally different normative leadership needed to contend with the potential for catastrophic failure.

Integrated Policy. Climate change, though difficult, is only one of a number of critical, inter-related, issues now confronting the global community, which threaten the sustainability of humanity as we know it. Rather than viewing these issues separately in individual “silos” as at present, integrated policy is essential if realistic solutions are to be implemented. NEM reform needs to fit within a systemic Australian approach to emergency action.

There needs to be an honest articulation of the catastrophic risks and the integrated sustainability challenge we now face, with extensive community education to develop the platform for commitment to the major changes ahead. That has not happened thus far. Investors, corporates and regulators have a crucial role to play in articulating reality and in adopting constructive solutions.

Request to the Expert Panel

I request the Expert Panel, in developing their final recommendations for NEM reform, to recognise that:

Climate change already poses an existential risk to global economic, financial and societal stability.
To limit temperature increase within globally agreed objectives, emergency action is now inevitable.
Emission reduction objectives for the Australian electricity system should be recast accordingly.
The Final Report needs to incorporate the need for emergency action in NEM reform, with market arrangements and technological choices structured accordingly, including carbon pricing.
Existential risk management techniques are required which fundamentally differ from conventional practice.

Ian T Dunlop

Sydney, Australia

————-

Author:

Ian Dunlop

Ian is a member of the Board of the ARC Centre of Excellence for Climate System Science based at UNSW.

He is a Director of Australia 21, Deputy Convenor of the Australian Association for the Study of Peak Oil, a Fellow of the Centre for Policy Development, a Member of The Club of Rome and a member of Mikhail Gorbachev’s Climate Change Task Force. He advises and writes extensively on governance, climate change, energy and sustainability. He was a candidate in 2013 and 2014 to join the Board of BHP Billiton on a climate change and energy platform.

Reference

[1] https://nsidc.org/arcticseaicenews/2016/12/arctic-and-antarctic-at-record-low-levels/

[2] http://www.smh.com.au/environment/sealevel-expert-john-church-resurfaces-at-university-of-nsw-amid-new-warning-signs-from-greenland-20161207-gt5qje.html

[3] https://www.theguardian.com/science/2016/mar/22/sea-level-rise-james-hansen-climate-change-scientist

[4] Antarctic tipping points for a multi-metre sea level rise, David Spratt, February 2017:

http://www.breakthroughonline.org.au/papers

[5] http://mashable.com/2016/12/03/nasa-photo-crack-larsen-c-ice-shelf/#GlKFT3rWbmqE

[6] https://www.theguardian.com/environment/2016/dec/09/great-barrier-reef-not-likely-to-survive-if-warming-trend-continues-says-report?utm_source=esp&utm_medium=Email&utm_campaign=GU+Today+AUS+v1+-+AUS+morning+mail+callout&utm_term=203508&subid=13317484&CMP=ema_632

[7] 2016 Warmest Year on Record Globally, NASA/NOAA, January 2017:

https://www.nasa.gov/press-release/nasa-noaa-data-show-2016-warmest-year-on-record-globally

[8] Global Heat Record Broken Again, Climate Council, January 2017:

https://www.climatecouncil.org.au/2016-hottest-year-report

[9] https://www.washingtonpost.com/news/energy-environment/wp/2016/11/30/the-ground-beneath-our-feet-is-poised-to-make-global-warming-much-worse-scientists-find/?utm_term=.2b40ab750c08

[10] http://www.pnas.org/content/112/11/3241.full

[11] The Roasting of the Middle East – Infertile Crescent, The Economist, 6^th August 2016

http://www.economist.com/news/middle-east-and-africa/21703269-more-war-climate-change-making-region-hard-live-infertile

[12] Extreme Heatwaves could push gulf climate beyond human endurance, The Guardian 26^th October 2015:

https://www.theguardian.com/environment/2015/oct/26/extreme-heatwaves-could-push-gulf-climate-beyond-human-endurance-study-shows

[13] How climate change will sink China’s manufacturing heartland, David Spratt & Shane White, 10^th August 2016:

http://www.climatecodered.org/2016/08/how-climate-change-will-sink-chinas.html

[14] UNFCCC Paris Agreement Article 2:

https://unfccc.int/resource/docs/2015/cop21/eng/l09r01.pdf

[15] The Lancet Commission:

http://www.thelancet.com/pdfs/journals/lancet/PIIS0140-6736(16)32124-9.pdf

[16] Australian Academy of Science, Climate Change Challenges to Health:
https://www.science.org.au/supporting-science/science-sector-analysis/reports-and-publications/climate-change-challenges-health

[17] “Climate Reality Check”, David Spratt & Ian Dunlop, Breakthrough Institute, Melbourne, June 2016:

http://www.breakthroughonline.org.au/papers

[18] The Sky’s Limit, Oil Change International, September 2016:

http://priceofoil.org/content/uploads/2016/09/OCI_the_skys_limit_2016_FINAL_2.pdf

[19]ibid “Climate Reality Check”, David Spratt & Ian Dunlop, Breakthrough Institute, Melbourne, June 2016:

[20] “The World’s Biggest Gamble”, Johan Rockstrom, Hans Joachim Schellnhuber et al, AGU October 2016:

http://onlinelibrary.wiley.com/doi/10.1002/2016EF000392/abstract

[21] https://www.pm.gov.au/media/2017-02-01/address-national-press-club

[22] Getting Energy Prices Right, International Monetary Fund, July 2014:

https://www.imf.org/external/pubs/cat/longres.aspx?sk=41345.0

Energy Security from Clean Coal, CCS & CSG – What could possibly go wrong ?

February 28, 2017May 11, 2018 itdunlop

Every few years the fossil fuel industry pressures politicians to force “clean coal”, carbon capture and storage (CCS) and more recently coal seam gas (CSG) on an increasingly sceptical community to justify their continued expansion.

This cycle started with promotion of Adani’s massive Carmichael coal mine in Queensland, for coal export to India. The South Australian blackout followed last September when violent storms blew down transmission towers, prompting instant Federal Government accusations that excessive reliance on renewable energy was the cause, despite clear advice to the contrary. When the long-overdue closure of the Hazelwood brown coal power station was announced in November, energy security became the political battleground. In passing, Adani were to be offered a $1 billion subsidy to construct the Carmichael rail line, then a further subsidy for a new domestic coal-fired power plant at the mine was mooted to assist the development of Northern Australia.

The Prime Minister’s recent National Press Club speech emphasised the need for “affordable, reliable and secure energy”, denounced the States for their “unrealistic” renewable targets, encouraged energy storage, but then took an evangelical swing back to coal, straight from the fossil fuel industry hymnbook. Priority would be given to “clean coal and carbon capture and storage (CCS) and onshore gas (CSG)”, implying that renewables were neither affordable or reliable. Further “The next incarnation of our energy policy should be technology agnostic – it’s security and cost that matter, not how you deliver it. Policy should be ‘all of the above technologies’ working together to meet the trifecta of secure and affordable power while meeting our (substantial) emission reduction commitments”.

So what could possibly go wrong with such sweeping vision?. Well, pretty much everything.

First, the speech skirted around the biggest risk facing Australia, namely accelerating climate change. Whilst Australia ratified the Paris Climate Agreement, our emission reduction commitments are not “substantial”. They are laughable both in comparison with our peers globally, and to have any chance of making a fair contribution to the Paris objectives of holding global temperatures “well below 2^oC above pre-industrial conditions and to pursue efforts to limit the increase to 1.5^oC”.

Sixth, there is nothing “agnostic” about choosing energy sources when the fossil fuel industry continues to enjoy a massive subsidy, far greater than renewables, by the lack of carbon pricing. A subsidy the IMF estimate to be around 60% of coal’s market price. And this is the nub of the problem. Our climate and energy policies are a disconnected and dysfunctional shambles, brought about by years of denial and inaction from Federal Governments of both persuasions who do not accept that climate change is happening.

The only way we can avoid catastrophic climate impact now is to initiate emergency action, akin to a war-footing. That will be accepted shortly as impacts bite and low carbon technology undermines the fossil fuel industry. In the meantime the damage created by political ideologues must be minimised, so no Adani, no coal-fired power, no CSG.

As for affordability, energy prices will rise given the extent and speed of change. However they will rise less with renewables than with coal, with greater prospects of cost reduction as technology improves.

In addition, we need a task force which will pull together the resources and expertise required to initiate emergency action, led by statesmen and women from businesses with a concern to create a genuinely sustainable Australia. It is their future which is being thrown away by fossil fuel industry pressure forcing government to remain firmly entrenched in the 20th Century.

Edited versions of this article were published in The Guardian and RenewEconomy on 3rd March 2017

Coal Industry – Wrong Way, Go Back!

September 29, 2015May 11, 2018 itdunlop

Coal producers and lobbyists are yet again promoting “clean coal” as the justification for continued expansion of energy coal as we make the inevitable transition to the low-carbon economy. Conscious that they can no longer credibly reject the evidence of accelerating climate change, the Minerals Council of Australia (MCA) and the World Coal Association (WCA) claim that the latest “clean coal” technologies, in the form of lower emission coal plants and carbon capture and storage (CCS), are an effective response.

Last week, the MCA released a paper by the International Energy Agency’s (IEA) Clean Coal Centre contending that new high efficiency “ultra-supercritical” coal plants in 10 countries in South and East Asia, including India and China, could reduce carbon dioxide emissions by 1.1 billion tonnes per annum compared to less efficient “subcritical” coal plants. They also heralded the opening of a new coal-fired power generation CCS plant in Saskatchewan as evidence that commercial scale CCS is now available.

Whilst such technological advances are welcome, that argument displays a fundamental misunderstanding of the climate science, and is being economical with the truth to put it mildly.

The full IEA picture emphasises that to stay below 2°C of global warming, we can’t afford to add any additional coal plants to the existing stock, no matter how efficient they are, unless their emissions can be sequestered. Certainly we need to replace or convert older, dirtier plants to the new cleaner technologies, but no new ones. Every new unabated coal plant locks in decades of additional coal burning and carbon dioxide emissions that our planet cannot afford.

In the IEA’s scenario to meet the 2°C limit, by 2040 there is room for only 780 GW of unabated coal power generation, and all of this must be the most efficient ultra-supercritical coal plants. The size of the world’s current coal fleet is 1900 GW, with an additional 300 GW under construction. Therefore even if not another single additional coal plant was built from today, we still need to retire two-thirds of the world’s current coal fleet by 2040 in order to stay within 2°C.

CCS is presented as the solution to overcome this constraint and allow unbridled coal expansion. It is not rocket science; it has been done in the oil industry for decades, reinjecting carbon dioxide produced with oil and gas back into the geological formations from whence it came. However the global storage capacity in depleted oil and gas reservoirs is limited and they are rarely in close proximity to coal power generators. If other geological storage structures have to be used, and the carbon dioxide transported any distance, storage security, technical difficulties and costs escalate dramatically which is why progress has been slow and industry has been reluctant to invest strongly in its development.

Expert analysis suggests that to sequester around a fifth of global power generation emissions would require the creation of an industry far larger than today’s world oil industry; implying the construction of more than 3000 plants within the next 20 years to have any chance of making a realistic contribution to emissions reduction. It is not going to happen, not least because the MCA and WCA have continually undermined sensible efforts to introduce a price on carbon pollution, thereby weakening the incentive to develop CCS.

Despite decades of rhetoric, globally we have only the one coal power CCS operation in Saskatchewan and even that is sequestering its emissions in a depleted gas reservoir. The project cost $1.5 billion for a mere 110 MW of output. A study by Saskatchewan Community Wind found that investment in wind power instead of the CCS plant could have saved ratepayers more than $1 billion. CCS will be viable in limited, specific circumstances and should be encouraged where that is the case, but it is never going to contribute substantially to the emergency reduction of global emissions now required. The industry should stop pretending otherwise.

Commitments made so far by countries in the lead-up to the December Paris climate conference show global emissions continuing to grow to 2030, albeit at a slower rate than in the past, in stark contrast to the rapid reduction required to stay below 2°C. Yet dangerous climate change is already happening at the 1.0°C increase we are experiencing today. The refugee crisis engulfing Europe is fundamentally climate change driven, triggered over the last decade by the most severe drought in recorded history in and around Syria. India, supposedly the great market opportunity for Australian coal expansion, has experienced unprecedented climate change-related heat extremes in recent years and changes to its critical monsoon system. These are precursors of far worse to come unless emissions are reduced fast.

The coal industry justifies expansion on the basis of demand supposedly “forecast” under an IEA scenario which assumes only limited change from “business-as-usual”. As the IEA themselves put it, this cannot be allowed to happen: it would be a world where temperature increases by around 4°C on average, with greater extremes regionally, a world where economic activity as we know it ceases as global population rapidly declines.

In short, the world would be toast. Australia, as the hottest, driest continent on Earth, would be toasted first. Coal leaders need to rein in the MCA and WCA, and start restructuring their companies, and retraining their workforce for the real opportunities the low-carbon world opens up.

Ian Dunlop was formerly an international oil, gas and coal industry executive, chair of the Australian Coal Association and CEO of the Australian Institute of Company Directors. He is a Member of the Club of Rome.

An edited version of this article appeared in the Melbourne Age on 25th September 2015.

The Australian Elites Have Failed Us On Climate Change

June 21, 2015May 11, 2018 itdunlop

The recent utterances of Maurice Newman, Chair of the Prime Minister’s Business Advisory Council, suggesting that climate change is nothing more than an attempt to establish “a new world order under the UN”, engendered some hilarity. They should not, because his comments highlight a fundamental failure of leadership on the part of Australia’s elites which is potentially disastrous.

The Business Advisory Council comprises some of the great and the good of Australia: Chairs of our leading mining, manufacturing, communications and construction companies and banks, ex-heads of the Prime Minister’s Department, Treasury and the Productivity Commission.

Whilst Maurice Newman’s writing is prefaced with the disclaimer that his views are his own, they clearly carry great weight in setting government policy. Whether it be the removal of carbon pricing, the pretence that Direct Action is serious climate policy, an ideological anti-science agenda reminiscent of the Dark Ages, or the charade of cutting the RET to reduce consumer costs when its own advice demonstrated exactly the opposite, the Federal Government’s actions have made it abundantly clear that it has no intention of taking climate change seriously.

In the real world, human-induced climate change is accelerating. It presents risks that humanity has never previously experienced, as evidence mounts that extremely dangerous “tipping points” in the Arctic, Antarctic, the Oceans and elsewhere are being activated, probably irreversibly. Current government policies would lead to a temperature increase of 4-6⁰C before 2100, a world where population would drop from 7 billion today toward 1 billion or less. Even meeting the “official” target of a 2⁰C temperature increase would halt population growth.

Due to lag in the climate system, the dangerous warming impact of fossil-fuel investments made today only becomes fully evident decades hence. Nonetheless, governments, investors and business are irresponsibly accelerating such investment, ignoring the risks. Waiting for catastrophe to happen before acting, which is in effect what Maurice Newman, and even “lukewarmers” such as Dick Warburton, Bjorn Lomborg and Nigel Lawson advocate, means that it is too late to act. It is precisely this scenario that sensible risk management is designed to avoid. Indeed, given the implications of passing “tipping points”, even greater precautions should be taken.

What are we to make then, of the deathly silence from other members of the PM’s Business Advisory Council in response to Newman’s very public stance? For example: Jac Nasser, chair of BHP Billiton which claims global leadership on climate change, Catherine Livingstone, former chair of CSIRO, one of the world’s leading climate change research organisations, now chair of the Business Council of Australia, Michael Chaney, former chair of NAB, another corporate sustainability leader, now chair of Wesfarmers. They will be well aware of climate risk; if not, as corporate directors they should be.

Perhaps there are whispered conversations in the corridors of power suggesting that Maurice might be wrong; if so they are singularly ineffective. The only conclusion is that the Council is comfortable with the charade of current climate policy despite the glaring contradiction with individual member’s corporate views. If not, given the risk we face, and the missed opportunities, they should be saying so, loudly and publicly; for disclaimer notwithstanding, the public perception is that Maurice Newman represents Australian business’s attitude to climate change.

This is reinforced by the fact that not a single Chair or CEO of a major company, bank or investment manager has spoken out against the Federal Government’s blatant climate denialism, and in particular, the government’s undermining of the new low-carbon industries on which Australia’s future depends. No comment on the lack of any strategic vision in the flood of Green and White papers on energy, defence, agriculture, immigration and infrastructure, all of which totally ignore the single biggest issue which should be driving policy – climate change.

Not that our elites shrink from taking a public position; witness the speed and anger of the big iron ore miners when our free market government proposed a Senate inquiry to explain how the free market works. A pity the same energy is not devoted to demanding sensible climate policy.

In 2008, with the Global Financial Crisis rapidly accelerating, Queen Elizabeth, in discussion with experts at the London School of Economics asked: “Why did no one foresee the timing, extent and severity of the GFC ?”. After some time, the British Academy responded that “A psychology of denial gripped the financial and political world, —— The failure of the collective imagination of many bright people to understand the risks to the system as a whole.”

Just so with climate change, as the same denial grips the elite of Australia, only the risks now are far greater. Quite simply, the future of humanity.

Remuneration is a major factor: “It is hard to get a man to understand a problem if his salary depends upon him not understanding it”. At present, our elites are being paid an obscene amount of money to, in effect, destroy the planet. They now need to lead and publicly take up the climate change challenge. We have solutions, but not if the elites hide in the shadow of Maurice Newman. Our grandchildren deserve better.

An edited version of this article appeared in the Melbourne”Age” on 21st June 2015: http://www.theage.com.au/comment/the-australian-elites-have-fundamentally-failed-us-on-climate-change-20150619-ghsb9d.html

Burning the Science Books

June 7, 2014May 11, 2018 itdunlop

Didn’t work then, won’t work now

Australia has an enviable reputation for scientific research, extending long before the hey-day of the CSIRO in the 1950s under the visionary leadership of Sir Robert Menzies and Sir Ian Clunies-Ross. On the hottest and driest continent on Earth, our prosperity would be non-existent had it not been for the enlightened application of science. So it has been of mounting concern over recent years to see governments of all persuasions adopt increasingly anti-science agendas.

The Abbott government is taking anti-science to new heights. Its “scorched earth” approach discards virtually everything not in line with narrow, free-market ideology, centred on sustaining Australia’s 20th Century “dig-it-up and ship-it-out” economic growth model.

The Prime Minister’s supposedly visionary address to the World Economic Forum in Davos last January, outlined this agenda[1]. Free-markets create prosperity, but their full costs have only become apparent in recent years. Over the last two decades, those costs have negated the benefits – we are actually getting poorer not wealthier [2]. The PM’s “vision” ignored such costs, along with the disastrous outcomes that the short-termism, inequity and corruption of free-markets delivers, witness the 2008 Global Financial Crisis, and ICAC closer to home. Markets are important, but they must operate within sensible rules and continual vested-interest lobbying has got rid of those rules.

Official orthodoxy decrees that conventional economic growth take precedence over all else, without understanding that such growth is no longer possible. In 1945 we had a relatively empty world of 2 billion people; we now have 7 billion. Exponential increases in both population and consumption, have delivered a “full” world, such that humanity today needs the biophysical capacity of 1.5 planets to survive, which is clearly not sustainable.

As a result, we are in the midst of a global discontinuity, where conventional growth has ground to a halt, notwithstanding futile efforts to reboot the system by printing money at will. We will emerge either with fundamentally different concepts of growth, or the system as we know it will collapse.

Excessive consumption has created global limits never previously experienced. Cheap fossil-fuel energy, which delivered our supposed prosperity, has dried up. Its carbon emissions have triggered global warming which is happening far more rapidly and extensively than expected. The remaining fossil-fuel reserves cannot be used if catastrophic climate outcomes are to be avoided. Water and food security are already badly affected, as witnessed by growing social instability and conflict around the world.

Yet our political and corporate incumbency refuse to “join the dots”, oblivious that global warming is already having a major negative impact on this country, that our high-carbon exports are a significant contributor, in the process destroying our manufacturing and agricultural industries.

They cannot grasp that we have enormous opportunities to prosper in the 21st Century, built around the rapid development of a low-carbon economy. We have the best low-carbon assets in the world, but to realise their potential, we need a new “vision” grounded, as never before, in science. On that score we are in big trouble.

Global warming is the greatest concern; it has already changed the context in which every policy in this country will have to be re-thought – from climate policy itself through energy, agriculture, social, health, infrastructure, migration and defence.

The government ignores the leading-edge climate science developed by our Institutions and informed scientific bodies worldwide. Particularly the work of the Intergovernmental Panel on Climate Change (IPCC), which is the most extensive scientific investigation probably ever undertaken. All of which point to the need for far more rapid action than acknowledged officially.

The science on an issue this complex is never “settled” as knowledge continually improves, but informed opinion is clear; we face potentially catastrophic risks, risks that are with us now, not one or two decades hence. We disregard them at our peril – which is exactly what the government is doing.

Science has disappeared from the government’s priorities just at the time we need it most.

Greg Hunt’s Direct Action White Paper has no scientific and economic grounding at all, whether from our own Institutions, the IPCC, the Garnaut and Stern Climate Change Reviews or numerous other global bodies such as the World Bank, IMF and the OECD. It is the climate policy you have when you don’t want a policy.

The work of the former Climate Commission, providing independent, objective explanation of the climate science, has been archived away from public view. Scientific illiterates have been appointed to key climate and business policy advisory positions. The Budget has gutted science funding in general, further emasculated the wholly inadequate Direct Action policy and rendered the CSIRO impotent.

The response from the supposedly scientifically literate Chairmen and CEOs of our major corporations, at the wanton destruction of their future innovation base, is a deafening silence.

Grandees such as John Howard and Cardinal Pell parade cynical climate denialism before international audiences [3] [4], putting more peer pressure on the current incumbents to toe that line and providing rare insight into the widespread denialist “groupthink” within senior conservative ranks.

Literally and figuratively, we are witnessing a “burning of the science books”, the like of which has not been seen since medieval times. It did not work for the Catholic Church in the days of Copernicus and Galileo, nor in Nazi Germany in the 1930s. It won’t work today.

Blinkered conservatism is recasting Australia in Donald Horne’s image of “A lucky country run mainly by second-rate people who share its luck.” [5]. Except that our 20th Century luck has run out and we are fast throwing away our options for a sustainable future. We need to insist that science is restored as the bedrock of our vision for the 21st Century.

Menzies and Clunies Ross never forgot that “Nature bats last”.
—————-

An edited version of this article appeared in the Sydney Morning Herald on 2nd June 2014.

[1] Address to the World Economic Forum, Davos, 23rd January 2014:
http://www.pm.gov.au/media/2014-01-23/address-world-economic-forum-davos-switzerland-0

[2] “Beyond GDP: Measuring & achieving global genuine progress”, Kubiszewski, Costanza et al, Ecological Economics, April 2013: http://www.uvm.edu/giee/pubpdfs/Kubiszewski_2013_Ecological_Economics.pdf

[3] “One Religion is Enough”, John Howard, Annual GWPF Lecture, London, 5th November 2013:
http://www.thegwpf.org/john-howard-religion/

[4] “One Christian Perspective on Climate Change”, Cardinal George Pell, Annual GWPF Lecture, London, 26th October 2011: http://www.thegwpf.org/images/stories/gwpf-reports/pell-2011_annual_gwpf_lecture_new.pdf

[5] “The Lucky Country: Australia in the Sixties”, Chapter 9, Donald Horne, 1964: http://www.penguin.com.au/products/9780143180029/lucky-country

Implications of Arctic Permafrost Thaw

January 19, 2012May 11, 2018 itdunlop

Of the many “Elephants in the Room” in the climate change debate, none are larger than the potential release to atmosphere of carbon dioxide and methane contained in the Arctic permafrost. Preliminary findings from the latest research, discussed at the American Geophysical Union’s (AGU) annual conference in San Francisco in December 2011, highlighted the extreme risks that humanity is now exposed to from global warming.

The Arctic has been warming 2-3 times faster than the global average, one consequence being that the volume of Arctic sea ice has reduced dramatically, by around 80% in summer since 1979, far faster than expected. If current trends continue, the Arctic may be sea ice-free in summer by around 2015, and all year by around 2030. This would likely lead to further positive warming feedback as the ice albedo effect diminishes, accelerating melt of the Greenland ice sheet, ultimately contributing several metres of sea level rise.

Such warming would also accelerate thawing of the Arctic permafrost, which contains twice as much carbon as the atmosphere. Releasing that carbon would accelerate global warming past tipping points which create a climate far less conducive to human evolution. The permafrost, along with clathrates on the seabed, contain large quantities of methane, with a warming potential twenty five times greater than carbon dioxide.

CO2 and methane release in the Arctic has been observed for some time, but the latest findings suggest this may be accelerating rapidly. The AGU discussion prompted a flurry of scientific commentary on the implications – whether the acceleration is real, whether the cause is anthropogenic or natural, whether the release mechanism might be abrupt or gradual. It is too early to understand the full implications. The complete scientific analysis of the latest evidence will be available later this year, but the preliminary findings should be a wake-up call to us all.

In risk management terms, these observations emphasise, as never before, the need for emergency action to reduce human carbon emissions. If permafrost thawing is allowed to accelerate, we may have little means of stopping it. Over time, this would be catastrophic, probably leading to global mean temperature increasing well over 4oC compared to pre-industrial levels, with a global carrying capacity of 1 billion people rather than the current 7 billion.

Our inaction today may well be guaranteeing such an outcome, which is why emergency action is needed now. This highlights the total inadequacy and empty rhetoric of the so-called “ Platform for Enhanced Action” agreed at the Durban UNFCCC Climate Conference last December. Waiting to negotiate an agreement by 2015, for implementation from 2020, meaning it will have little effect for years afterwards, when human emissions are at an all-time high accelerating faster than ever, the permafrost thaw is most likely accelerating rapidly and none of the supposed technological fixes for human emissions, such as carbon capture and storage, are working, is nothing less than suicidal.

The critical flaw is our inability, or refusal, to address risk and uncertainty realistically. The scientific community gives increasingly urgent warnings on the mounting evidence of anthropogenic warming and the need for rapid emission reductions. At the same time they rightly set out the uncertainties involved, but those uncertainties relate less to the fundamentals, far more to the impact of the warming (eg there is no doubt warming is occurring, the uncertainty is whether it will be a 4°C or a 7°C temperature increase). Officialdom chooses to ignore these warnings, preferring policy based on “political realism”, shorthand for hoping the problem will go away. Business, supposedly the experts on risk management, should take leadership, but have abrogated any responsibility, given that realistic action will require a fundamental redesign of the economic system, undermining established vested interests. The result is that nobody is seriously addressing the strategic risks to which we are exposed.

Conventional politics is incapable of handling this issue. Leadership is totally lacking within the political and corporate worlds; global and national institutions are failing here, as they are failing to address the financial crisis – on both counts economic growth is the problem, not the solution. The priority for 2012 must be to develop new mechanisms which, with community support, go around conventional politics and vested interests. Climate change is now a far bigger risk than any financial crisis and yet the real effort devoted to managing it is miniscule in comparison.

Corporate Heads in the Sand:Global Warming, Risk & Governance

June 23, 2011October 3, 2021 itdunlop

Global warming is about risk and uncertainty. Many factors are probably contributing to it, including natural variability. However, it is beyond reasonable doubt that the world is warming and that human carbon emissions are a major contributor. The risks of destabilizing the climatic equilibrium under which humanity as we know it has developed through the 11,000 years of the Holocene period are now escalating rapidly.

The glaring omission in current national discourse is any mention of these risks. The credible climate scientists have been sounding urgent warnings for some time. Politicians interpret these warnings in terms of “political reality”, proposing action which is far from that required. There is virtually no-one addressing the real risks. The science on an issue this complex will not be settled for a long time, but that requires even greater prudence in managing risk and uncertainty, particularly where climatic changes may be sudden and irreversible.

Sound corporate governance requires boards of directors to act honestly, in good faith and to the best of their ability in the interests of the company in perpetuity. They must also ensure risks are identified and suitable systems put in place to manage those risks. Global and national institutions are now indicating that global warming is one of the greatest risks we face, in both the short and long term. Thus its risk management should be a major concern and responsibility of the corporate sector, a responsibility the sector in Australia has steadfastly refused to acknowledge.

Which makes recent public pronouncements by some corporate luminaries of particular concern;

David Murray, Chair of the Future Fund, opined that carbon dioxide was not a pollutant, there was no correlation between carbon dioxide and global warming, and that the amount of ice in the world was slightly increasing, not decreasing (AFR “Lunch with David Murray” 10th June 2010)

Belinda Hutchison, Chair of QBE Insurance, stated that the recent natural disasters in Queensland had nothing to do with climate change, as demonstrated by “research received” (SMH “QBE blames La Nina for Disasters” 20th April 2011).

Dick Warburton, Chair of the Board of Taxation, Citigroup and other public companies, Peter Farrell, Chair of Resmed, and Geoff Lehmann, poet and tax specialist, re-iterated at length minority scientific opinion, accepting that carbon dioxide emissions have a warming effect on global temperature, but implying that the sensitivity of temperature to increasing carbon dioxide concentration was far less than claimed by majority scientific opinion, to the point that the effect was unimportant. The bottom line being that “Adaptation to adverse climate change, if and when it does occur, may be the best and only viable strategy.” (Quadrant “The Intelligent Voters Guide to Global Warming”, March/April 2011),

These categoric statements stand in stark contrast to the opinion of major Academies of Science around the world and key scientific organisations such as the CSIRO, WMO, BoM, NOAA etc. that most of the global warming in recent decades can be attributed to human activities and that urgent action is required to reduce emissions if potentially catastrophic outcomes are to be avoided.

The risk equation is simple. If we take serious action to reduce emissions, the cost is likely to be a manageable 3-5% of GDP, increasing the longer action is delayed. If global warming turns out to be as the scientific majority believe, with major adverse implications, we are as prepared as we can be to minimise the effects, and to adapt to those we cannot avoid. If the minority view proves correct, with minimal climate impact, we end up with a cleaner, less polluted and healthier environment.

If we take no action and the minority view proves correct, then it is “business-as-usual”. On the other hand, if the majority view proves correct, the world faces catastrophic outcomes totally unprepared, with an impact potentially worse than the Great Depression, WW1 & WW2 combined and a global carrying capacity of less than 1 billion people compared with 7 billion today. The impact on Australia would be particularly severe.

The empirical evidence of what might be termed the key performance indicators of global warming – melting of the Arctic and Antarctic sea ice and ice sheets, mountain glaciers and permafrost, ocean acidification, declining natural carbon sinks – all suggests that the warming impact is accelerating ahead of the scientist’s previous expectations. This is reinforced by the increasing frequency of extreme weather events, particularly over the last decade.

In this context, the need for urgent precautionary action should be obvious.

Everyone is entitled to their own opinion on this issue. It is reasonable to assume that the public statements above are reflected in the corporate approach to global warming being taken by organisations with which those individuals are involved. That would not be of great moment, except that those organisations exercise substantial influence and corporate power, with a major impact on Australian society.

Sound governance requires that directors take a balanced view of risk and uncertainty. To propose a strategy of either denial, or wait, see and adapt, in the light of current empirical evidence and the balance of expert advice, is a serious breach of fiduciary responsibility, both corporately and nationally – a breach which is only too evident in the current business approach to carbon pricing.

It is high time major Australian corporations acknowledged the real risks we confront, took leadership in implementing genuine precautionary measures urgently, and in particular woke up to the opportunities these present.

An edited version of this article was published in the Australian Financial Review on 23rd June 2011.

Ian Dunlop at Amplify Festival 2011

June 7, 2011May 11, 2018 itdunlop130 Comments

The end is nigh! Or is it? Can the carbon tax save us, is there life after oil, what can we do as businesses and individuals to help the cause? A collection of insights from an energy expert with a 30 year career in gas and coal.

Trigger For Global Sustainability

July 27, 2008April 30, 2018 itdunlop38 Comments

From ABC radio’s Ockham’s Razor, 27 July 2008 …

http://www.abc.net.au/rn/ockhamsrazor/stories/2008/2313512.htm

Ian Dunlop is Deputy Convener of the Australian Association for the Study of Peak Oil and warns that the oil supply will eventually run out and with that and the global warming issue in mind, we need to look for alternatives.