Following the serious power blackouts that occurred in South Australia and near misses in other states, gas-fired power stations have been touted as the one of the best means to transitioning away from our aging coal-fired electricity generation system. This is short-term, simplistic thinking that will be detrimental in the longer term, and the Climate Council has just released a report explaining why. The report is called Pollution and Price: The Cost of Investing in Gas.
The Climate Council is the crowd funded organisation led by Tim Flannery that replaced the Climate Commission that was abolished by the Abbott Government shortly after they came into power. They aim to provide independent, expert information on climate change issues.
Here is a brief summary of the main findings.
Use of gas does not reduce emissions sufficiently
Australia must reduce greenhouse gas emissions down to zero by 2050 in-line with international goals. Fossil fuels (coal, oil and gas) all produce greenhouse gas emissions driving climate change. Limiting global temperature rise requires that they are all phased out. Gas is not sufficiently less polluting than coal to garner any climate benefit.
Greenhouse gas emissions are produced both from gas power stations and gas production (for instance, methane from gas leaks). Methane is 86 times more potent as a greenhouse gas than carbon dioxide over a
New gas power plants are less polluting than coal. However, when the entire supply chain of gas production is considered, gas is not significantly less polluting than coal. Current levels of reliance on gas power in Australia must be reduced to play our role in limiting global temperature below 2°C. Expanding gas usage is inconsistent with tackling climate change as it locks in emissions for decades into the future.
Greater reliance on gas will drive higher power prices
Australia’s liquefied natural gas exports are pushing up the price of gas power as domestic gas prices are now inextricably linked to world market prices for oil. This will continue into the foreseeable future.
The most economic and accessible reserves are now being exported. Further gas expansion will drive increased reliance on unconventional gas, which is expensive. Reliance on gas power is also driving power price spikes, particularly in South Australia, Queensland and increasingly in New South Wales, due to lack of competition among gas power companies.
Investment in new gas plants is financially risky
The large increases in future gas prices and volatility resulting from liquefied natural gas exports together with domestic gas prices controlled by relatively few producers, make investments in new power plants using gas very risky. New gas power plants would rely on ageing gas production infrastructure (e.g. processing plants and high pressure pipelines) that is increasingly vulnerable to failure. Costs of updating this infrastructure and accounting for methane leakage must be factored into policy and investment decisions.
New gas infrastructure locks in carbon emissions for decades. Future regulations may impose higher costs or stricter limits on emissions in the future, impacting on the economic viability of gas production and electricity generation, stranding investments.
Significant development of new gas plants is unfeasible without a massive expansion of unconventional gas
The sheer volume of gas required, the cost, the lock in of long-term emissions, environmental risks and lack of support from communities near gas wells makes this unrealistic. Currently the emissions from unconventional gas in Australia are unknown due to a lack of measurement and data. This presents a long term carbon risk to investors as high emissions fossil fuel infrastructure faces the possibility of future regulation due to climate change. Development of new unconventional gas is entirely out of step with meeting the Australian government’s climate change goals.
Renewable energy can provide a secure, affordable alternative to new fossil fuels
New renewable energy is cost competitive with new gas. The cost of renewable power and storage, particularly solar, wind and batteries, continues to fall and has no associated fuel costs. This contrasts with rising and volatile gas prices.
Technologies such as solar thermal, hydro and biomass plants can meet demand for electricity at all times of the day as well as meeting technical requirements for grid stability. Combining these technologies with wind, solar PV, and large-scale energy storage, can meet electricity demand round-the-clock. Using existing gas-fired generators and supply infrastructure prudentially to complement wind and solar power while scaling up a range of renewable energy technologies, energy storage and energy efficiency measures could deliver a limited benefit, provided the end goal is phasing out the use of all fossil fuels as quickly as possible.
The report concludes that Australia should not provide policy support for new gas power plants or gas supply infrastructure. Existing gas plants should be thought of as a short-term, expensive, emergency backup as renewable energy and storage is rapidly scaled up.
In November the Turnbull Government ratified Australia’s commitment to comply with the Paris Agreement on Climate Change. Australia has set a target to reduce emissions by 26 to 28% below 2005 levels by 2030, which builds on the 2020 target of reducing emissions by 5% below 2000 levels. The 2030 target is equivalent to about 13% below 2000 emission levels so the 2030 target is not as good as it sounds.
Currently the government’s main plan to reduce greenhouse gas emissions to meet our obligations under the Paris Treaty is called the Direct Action Plan. Introduced in 2014, the scheme operates by reverse auction, funding projects voluntarily proposed by the private sector. Projects are selected on the amount of greenhouse gas emissions expected to be abated at the cheapest price. So far $1.7 billion has been allocated out of a budget under the Emissions Reduction Fund (ERF) of $2.55 billion over 4 years.
Direct action also involves an emissions ‘safeguard mechanism’ to discourage large emitters from increasing their emissions above historical benchmarks. It commenced on 1 July 2016. It is not clear yet whether the rules will be effective in controlling increases in emissions.
This article draws on two recent analyses of the effectiveness of the Direct Action Plan:
- Paul J Burke, Undermined by Adverse Selection: Australia’s Direct Action Abatement Subsidies, Australian National University, April 2016
- Margaret Blakers and Margaret Considine, Mulga Bills won’t Settle our Climate Accounts: An Analysis of the Emissions Reduction Fund, The Green Institute, November 2016
Risk of Adverse Selection
Paul Burke questions the effectiveness of the direct action projects because of fundamental flaws in the scheme design:
- There is no way of preventing the direct action scheme subsidising projects that would have gone ahead anyway. For example funding has been provided for replacing machinery that is inefficient and upgrading lighting in supermarkets. These projects would provide a financial benefit to the proponent in any case so a subsidy has no justification.
- The international rules of carbon accounting require additionality. This means that credit for emissions reductions must not include changes that would have occurred anyway, say, because of legislation.
- The information about emissions expected to be abated will depend on a definition of baseline emissions, that is, what emissions would have been if the project had not been implemented. It is the proponent’s responsibility to identify their baseline in accordance with approved methods, and there is some flexibility. The government’s inability to know true project baselines creates a major challenge. Projects with overgenerous baselines will be able to submit relatively low auction bids because the abatement they offer will be easy to achieve, and thus cheap. These bids are well placed to secure funding. If the baseline is higher than business as usual, in the end the project will deliver less abatement than notionally indicated.
Effectiveness and Value for Money of Abatement to be Delivered
Margaret Blakers and Margaret Considine have undertaken the first ever analysis of the ERF auctions. They found that direct action not only fails its own test of delivering ‘real and additional’ emissions reductions, but also that it cannot serve as the foundation for more serious action without very substantial changes to its architecture. Their key findings are:
- Large sums of money (around $1.2 billion) have been poured into protecting land sector carbon. At the same time there is no federal policy safeguarding existing landscape carbon stocks. They are turning a blind eye to state governments rolling back land clearing controls. The entirety of the abatement purchased by the ERF so far (143 Mt CO2-e) at a cost of $1.73 billion accounts for less than 20% of projected emissions from land clearing up until 2030.
- Over half of all abatement comes from just two mulga-dominated bioregions in south-west Queensland and western NSW. The value of ERF contracts in and around these regions is about $1 billion. With carbon payments estimated to average $195 per hectare, this represents many times the per hectare value of land in the region. Paul Burke makes a similar point. This situation only applies to land with existing land clearing permits predating 1 July 2010. The payments rest on the assumption that clearing would have happened without the subsidy. No doubt some vegetation has indeed been preserved, albeit at a high price. Some of the spending has questionable additionality, however, given that the incentive to clear was anyway rather low (clearing is expensive and the productivity of the land is low).
- Much of the scheme’s expenditure has either been wasted or is at risk due to doubtful additionality (as per Paul Burke’s examples) and lack of permanence. 25% of ERF abatement has a ‘permanence’ period of only 25 years, after which time landholders regain ‘full land-use flexibility’. As well, the concentration of abatement in the semi-arid mulga regions carries its own risks such as from drought and climate change itself.
Fundamentally the ERF abatement profile is at odds with Australia’s emissions profile. Over 80% of our emissions are from industry, but 80% of direct action abatement is from the land sector. Only 4% is from the energy and industrial processes sectors, which produce most of Australia’s emissions.
Inadequacies in Methods for Vegetation Abatement
All the methods apply to ‘forest’ which is defined under the international rules. No methods are available at present for non-forest native vegetation or existing native forests on public land. Native forests on private land protected by legislation or covenant do not qualify because they are required by law to be protected.
Most landscape carbon resides in natural ecosystems. If well-managed, these will be resilient and are likely to persist and accumulate large carbon stocks in soils and plants over decades and centuries. Natural ecosystem management requires coherent, continental-scale policies and funding for the long term coordinated by the states and Commonwealth, not the ad hoc project funding that direct action provides.
The ERF is failing the climate, failing the land sector and failing the budget. To be credible, Australia’s climate policies must address the land sector in its own right and must stem the loss of carbon from the landscape caused by clearing, logging and other forms of degradation.
Ultimately the only effective long-term strategy to reduce Australia’s greenhouse gas emissions is to place a direct price on emissions.
Have you ever enjoyed the cool refuge that an underground cave offers from a hot summer’s day? Or perhaps you have experienced the soothing warmth when entering a cave during winter?
When descending into a cave, you may not only enjoy the calm climate, you may also admire the beauty of cave deposits such as stalagmites, stalactites and flowstones, known by cave researchers as speleothems.
Perhaps you already know that they grow very slowly from minerals in the water that drips off or over them. This water originates from rain at the surface that has travelled through soil and limestone above, and seeped into the ground and ended up in the cave.
As speleothems grow, they lock into their minerals the chemical signatures of the environmental and climatic conditions of the time the rainwater fell at the surface. So, as a stalagmite grows, the surface climate signature is continuously trapped in the newly created layers.
Some very old stalagmites hold climatic signatures of the very distant past, in some cases up to millions of years. They contain an archive of the past climate as long as their age, often predating global weather station records.
Above and Below
But if a cave remains cool during summer and warm during winter, how is its climate related to that of the surface? And how does this affect the chemical signature recorded by speleothems?
To understand the relationship between surface and cave climate, our research group, Connected Waters Initiative Research Centre at UNSW Australia, conducted multiple field experiments at the Wellington Caves Reserve in New South Wales.
During the experiments, the surface and the cave climates were measured in detail. For example, highly accurate temperature sensors were used to measure the water temperature at the surface, and at the point where water droplets hit the cave floor forming stalagmites.
Martin S Andersen
The research team initiated controlled dripping in the cave by irrigating the surface above the cave with water that was cooled to freezing point to simulate rainfall.
The cold water allowed us to determine whether the drip water in the cave is affected by the conditions at the surface or those along its pathways through the ground.
We also added a natural chemical to the irrigation water, which allowed us to distinguish whether the water in the cave originated from the irrigation or whether it was water already present in the subsurface.
Our results revealed a complex but systematic relationship between the surface and the cave climate. For example, surface temperature changes are significantly reduced and delayed with depth.
Our research illustrates how to decipher the surface temperature from that in the cave. Understanding this is necessary to correctly decoding past surface temperature records from their signatures preserved in stalagmites.
Keeping it Cool
We also discovered that air moving in and out of the cave can cool cave deposits by evaporating water flowing on the cave deposits. This cooling can significantly influence the chemical signature trapped in the cave deposit and create 'false' signals that are not representative of the surface climate.
In other words, it will make the surface climate 'look' cooler than it actually was, if not accounted for. While this is more likely to occur in caves that are located in dry environments, it may also have to be considered for stalagmites in caves that were exposed to drier climates in the distant past.
Our new knowledge can also help scientists select the best location and type of stalagmite for the reconstruction of past climatic or environmental conditions.
This new discovery is significant because it can improve the accuracy of past climate signals from cave deposits. It may also help us understand previously unexplained artefacts in existing past climate records. By improving our understanding of the past climate we can better understand future climate variations.
(Martin S Andersen)
Gabriel C Rau, Associate Lecturer in Groundwater Hydrology, UNSW Australia; Andy Baker, Director of the Connected Waters Initiative Research Centre, UNSW Australia; Mark O Cuthbert, Research Fellow in Hydrogeology, University of Birmingham, and Martin Sogaard Andersen, Senior lecturer, UNSW Australia
Well the July election is done and dusted and the Liberal–National Coalition just scraped in. Despite Malcolm Turnbull’s previous statements about the need for serious action on climate change it appears that he does not have the political will to overturn past government decisions to downgrade climate change research and development.
CSIRO is an organisation independent from the government but still very much dependent on government funding. In February the CEO announced that climate science is settled so the focus can change to adaptation and mitigation. This statement was used to justify cutting over 100 climate change research jobs. Funding could be diverted to fields that could be more lucrative.
The size of the cuts was modified following an international outcry but there was still a cut of about 75 positions from the Oceans and Atmosphere division. Research is to be centred in Hobart in a new Climate Science Centre that will coordinate the work of 40 scientists carved out of existing CSIRO teams, and also tap into work by the Bureau of Meteorology and universities.
In August another modification was made when new Science Minister, Greg Hunt, ordered CSIRO to revive some other climate science programs in climate analysis and forecasting in Hobart. But these jobs will be financed out of the existing budget.
Fundamentally we still have less climate science capacity than before the cuts were announced. Some outstanding scientists with a huge accumulation of knowledge such as John Church, global sea level expert, will not return.
Support for Renewable Energy
There are plans to cut most of the funding for Australian Renewable Energy Agency as well as its ability to give grants. As the world responds to the urgent need to build new renewable electricity generation capacity, this plan is puzzling. Again the government’s reason is long-term ‘budget repair’. Australia has a long history of leading research into new solar technology. Hundreds of jobs will be lost from current research organisations and the potential opportunities for future commercialisation.
These policies conflict with the plans to help Australia become an innovation nation. The message from the government is that research is an expensive luxury rather an essential part of our long-term future.
The Paris climate change talks in December 2015 produced an agreement hailed as 'historic, durable and ambitious'. Developed and developing countries alike are required to limit their emissions to achieve an objective of limiting average global temperature increases to 2°C with an aspiration of 1.5°C.
The Ku-ring-gai Bushcare Association is an unincorporated organisation that is supported by Ku-ring-gai Council which supports the Bushcare volunteer program and holds regular educational events. The committee comprises elected volunteers and Council employees.