RUTHFULLY YOURS

Floods, droughts, hurricanes, bushfires, coral bleaching, algae blooms off South Australia, you name it, rascally climate change is behind it. It is now established science that almost all extreme weather-related events in recent decades are due to climate change which, in turn, is due to burning fossil fuels and other human and bovine activity. 

There were very few extreme weather-related events before climate change. There will be few extreme weather-related events once we have achieved net zero and beyond. We are living through a unique era of multitudinous extreme weather-related events, proving without doubt that achieving and then bettering net zero is the greatest moral challenge of our time. We don’t meet it, we’re dead. Quod erat demonstrandum.

I was thinking about how this modern delusion, only modestly caricatured, has infected minds when perusing the results of a poll of 40 so-called “top economists” conducted by The Economics Society of Australia. The economists were given a menu of answers to choose from in response to some loaded questions on the power supply. As follows:

♦ What do you believe is the most important and second most important of three goals in transforming Australia’s energy system? Achieving net zero by 2050 or ensuring reliability of the power supply or minimising the cost of generation and distribution.

♦ What would be the optimal mix of energy resources in 2040 among coal, gas, renewables and nuclear?

♦ What should be the policy instrument employed to achieve the optimal energy mix? Cap and trade carbon pricing or firm commitments not to extend the life of coal plants or subsidies for preferred forms of energy or an extension of the safeguard mechanism to most industries and firms or tax concessions for preferred forms of energy or direct government funding of preferred forms of energy.

It is without surprise, in these weather-threatening times, that 18 of the 40 economists polled put achieving Net Zero as the most important goal. Fifteen have no coal at all in the optimal mix by 2040. Over half have renewables accounting for 75% or more generation. Risibly, Professor John Quiggin (Queensland Uni) has 95% renewables. On average, across all of those polled, renewables contribute 69% to the optimal mix by 2040. Forget about the reliability of supply if that average came about, never mind the outliers. On my count only 8 contemplate nuclear in the optimal mix.

Fifty percent of responses favour not extending the life of coal mines as part of the solution. No doubt those strongly against coal have a one-to-one correspondence with those who favour achieving Net Zero over the reliability of power supply. A case of moral posturing prevailing over keeping the lights on.

As you might imagine when it comes to policy instruments, cap-and-trade carbon pricing is the preferred choice of most economists. Economists like the idea of using a market mechanism even when they have not the least idea how it would actually work in practice. That is not their job. Remember the unfair criticism of the Resource Super Profits Tax (RSPT) devised by Treasury Secretary Ken Henry in 2012. Sure it was unworkable but excellent in theory. 

I intended to issue booby prizes to those who are most divorced from reality. Unfortunately, the boobies are too numerous to list. However, to end on a positive note, while a tiny few of those polled are better than woeful, Gigi Foster, from the University of NSW is a standout. She must feel extremely lonely in academia. Here is her marvelous response to the poll. No need to say more. Enjoy.

I don’t like the premise of this question, which is that some bunch of future-tellers have any place predicting the precise energy mix that will be optimal in 15 years’ time.

What I am confident about is that renewables have no chance of replacing fossil fuels; that we should use more of our wealth of gas reserves and also keep coal going for reliable base-load generation; and that we should consider nuclear.
How to get there: Bring some French engineers over to Australia and pay them to advise us on the feasibility and optimal location and design of nuclear power generation in Australia. Also, wipe out all the special subsidies to “renewable” technology that are based on the net zero madness.