News | 21st Feb, 2013

Dirty fossil fuel exports will come back to bite Australia

21 Feb 2013
Graham Readfearn, The Guardian

Australia just loves to share, regardless of whether or not the world might universally benefit from what it's got to give.

There's been Kylie Minogue, a certain beer that nobody in Australia actually drinks, unplayable spin bowlers, those mini plastic alopecia-ridden clip-on koalas and pictures of "wish you were here" beaches.

But there's another, less famous Aussie-born export: fossil fuels. Lots of 'em.

I know, I know. Australia is tackling the world's greatest market failure with its legislated price on greenhouse gas emissions. One tonne can be yours for AU$23 (£15.50).

Al Gore has said the laws introduced in 2012 by the Labor prime minister, Julia Gillard, had "inspired the world" because "carbon polluters are being held accountable for the global warming pollution they pour into the atmosphere every single day". Barack Obama has described the policy as "bold".

Few would argue that it's a first step to fundamental change but Gore, Obama and Gillard need blinkers when they use the carbon price as evidence of serious action.

That way they can avoid seeing the squizillions of tonnes of Aussie fossil fuels being shipped and burned around Asia like they're going out of fashion (which surely they should be).

Australia's domestic emissions of greenhouse gases are relatively modest on a global scale – about 560m tonnes of CO2-equivalent (CO2e) annually. But on a per capita basis, Aussies are one of the worst offenders in the developed world.

A new study in the journal Biogeosciences finds Australia exports twice as much CO2e via coal and gas than it emits at home from burning fossil fuels for energy. But Australia is only getting started.

Already the world's biggest exporter of coal, a Greenpeace report has dubbed the country's plans to expand those exports as a "carbon bomb" that will add 900 megatonnes of CO2 to the atmosphere every year when its burned.

On top of that, the state of Victoria is touting, to anyone interested, some 13bn tonnes of its reserves of lignite – low-grade brown coal.

Australia's most emissions-intensive power plants are fueled by brown coal. In theory the much-lauded carbon price should hit the dirtiest power generators the hardest.

But new analysis this week suggests that, so far, the carbon price hasn't so much hit them hard as provided billion dollar bonus cheques.

A report commissioned by not-for-profit group Environment Victoria has found, in the first six months of the scheme, the Victorian power firms passed on to customers more than 100% of the carbon price.

Among the laws and schemes to deliver that price was a pot of cash to supposedly stop power plant owners going under and the lights going off.

Thanks to this and the extra cash from price rises the report claims the brown coal generators will pocket between AU$2.3bn (£1.5bn) and AU$5.4bn (£3.64bn).

And where does a fair bit of that filthy lucre go? Clue: it starts with "e" and ends in "xport". Three of the biggest power plants are owned by two international energy giants: the Europe-based GDF Suez and the Hong Kong-based CLP Group.

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Read about the Baillieu Government's plans for a brown coal export industry here >

Read about how coal generators are making windfall profits from carbon tax compo here >