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Our carbon black hole - the real budget shortfall

There is a particular kind of budget shortfall that won’t get any mention in this election campaign, and yet this shortfall has immense implications for the economic and social future of Australia. The…

As the sun sets on our fossil fuel reliance, the need to dedicate our carbon budget to renewable energy becomes increasingly critical. Image sourced from www.shutterstock.com

There is a particular kind of budget shortfall that won’t get any mention in this election campaign, and yet this shortfall has immense implications for the economic and social future of Australia. The shortfall concerns the difference between the proportion of our carbon budget that we ought to be spending on constructing the renewable energy infrastructure and the proportion that we actually spend.

Within the next four decades we will need to construct a new energy infrastructure that is almost largely based on renewables - a mixture of wind, wave, photovoltaic, solar thermal and geothermal. We only have a short period to do this because the economic risks associated with climate change will eventually require us to largely disinvest from the old economy’s energy systems of oil, coal and gas.

A new balance sheet

The budget that will drive this is not the government’s economic budget or the national accounts but the carbon budget. Talking of climate change in budgetary terms is useful because it gives a clearer picture of the problem’s urgency. The planet can only absorb a certain amount of additional carbon dioxide without destabilising atmospheric and oceanic systems. The longer we delay action and continue to expend that finite budget, the closer we get to a time when we will not be able to halt the destabilisation process.

For this reason The Climate Institute has urged the government to adopt a carbon budget approach. One way of doing this is to see what amount of carbon emissions is required to stay under the 2 degree Celsius threshold that has been generally regarded as the upper limit for managing climate change. By knowing the limits, we can set real budgetary targets to guide policy. We can also see how much we fail by.

One of the most important uses of the carbon budget approach is to see where we spend our precious budget of carbon. And at the moment we are not spending it on the right things. There is a growing shortfall between the amount of carbon emissions we have to build new renewable infrastructure and what we are actually spending. This shortfall is increasing rapidly because we are blowing our carbon budget on the fossil fuel energy infrastructure that caused our current problems. Of even greater concern is the fact that the traditional political parties show no sign that they are aware of this carbon budget shortfall, let alone its importance to the future economic well-being of the country.

Climate cone of silence

The traditional political parties don’t seem to want to discuss the climate change issue during the election. My guess is that all their polling and focus group research tells them that people are thoroughly tired of the issue. Unfortunately, this avoidance won’t make the problem go away. Sick of hearing about climate change? I have some bad news for you. This issue will, for the very long foreseeable future, be the most important big-picture topic that the Australian economies and politicians will need to deal with. Our economy is more exposed than any other to the carbon bubble that will pop some time in the next few decades.

The most recent report from the Australian Climate Commission, The Critical Decade 2013: Climate change science, risks and response, makes it clear that the road ahead will be a rocky one. For the world to have a reasonable chance of staying under the 2 degrees Celsius global temperature by 2050, it has around 600-900 gigatonnes (billion tonnes) of CO2 emissions in the global carbon budget. However, this scenario leaves the entire global economy with a budget of only around 75 gigatonnes to remain under 2 degrees Celsius from 2050 to 2100.

Thousands of thin film solar modules were recently installed on a former Russian military airfield in Gross Doelln, Germany. They are reported to provide 36,000 households with electricity. AAP

Bill McKibben, Carbon Tracker and other interested groups have also pointed out that at some point the world’s investment, insurance and reinsurance, superannuation and risk-analysis communities will wake up to the financial risks involved and will pull the plug on oil, gas and coal investments. When that happens, those economies most reliant on the fossil fuels industry will be profoundly impacted, and Australia is one such economy.

The Australian Climate Commission has taken this message on board and, in turn, the message of The Critical Decade is relatively simple. For the world to keep under the difficult-to-achieve global temperature increase of 2 degrees Celsius by 2050, the majority of its fossil fuels need to remain unused and new power sources found. Globally and nationally, we now need to invest our limited carbon budgets in the renewable and sustainable sources of energy production that will carry us into the future.

Germany and other first-mover economies, such as Denmark and Sweden, are already doing this. Australia currently produces around 12% of its energy via renewables, while Germany produces more than 25% of its much larger energy needs from renewables, with plans for 80% by 2050.

Our carbon budget

Global CO2 emissions in 2011 were 33.376 Gt. Australia’s contribution to this global total was .0563 Gt, or 1.7%. Under the budgetary settings described above, this means that our budget is between 9.6-15.1 GtCO2 for the next 37 years to 2050. So, at current emission rates, we will overshoot our carbon budget by around 60% (7.5 GtCO2).

If we are to do our bit in keeping climate change within tolerable limits, Australia’s carbon budget from 2050-2100 is about 1.3 GtCO2. This equates to 26 million tonnes of carbon per year. The current annual rate of carbon emissions in the Australian economy is about 400 million tonnes, so it is clear that our energy systems need to change, and change dramatically.

But, more importantly, we are spending relatively little of our limited carbon budget on constructing the renewable infrastructure that will drive the Australian economy after 2050 while only producing something less than 10% of the carbon emissions that we produce today. And we will need a sizeable proportion of our remaining carbon budget to do that.

This is a massive transformational task and yet we are frittering away our carbon budget on maintaining the fossil fuel energy infrastructure of the past. The carbon debt that we are leaving to future generations of Australians is growing rapidly and the leaders of our two major political parties seem to be totally unaware of this crucial problem.

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42 Comments sorted by

Comments on this article are now closed.

  1. Berthold Klein

    Civil-Environmental engineer

    There is no credible experiment that proves that the "greenhouse gas effect" Hypotheses is real. It is now becoming evident that there has been a Terrible Conspiracy to trick the world into believing in the GHGE and then steal money from everyone with a Carbon Tax.
    Here is just some of the evidence.
    UN Scientists Who Have Turned on the UN IPCC & Man-Made Climate Fears — A Climate Depot Flashback Report

    Warming fears are the “worst scientific scandal in the history…When people come to know what…

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    1. Janeen Harris

      chef

      In reply to Berthold Klein

      How can mankind keep belching filth into the atmosphere and expect there to be no consequences? Even if the science isn't perfect surely we have the sense to see the mess that's being made. We need to show more respect for the planet that has provided everything that we have ever had.

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    2. David Arthur

      resistance gnome

      In reply to Berthold Klein

      So Klein's doing another screen dump? Here's the correction to his nonsense.

      Earth is warmed by absorption of short wave sunlight. Because of this, Earth's temperature can remain unchanged by returning the same amount of energy to space. That is, solar shortwave energy is balanced by the earth re-radiating to space as a 'black body' radiator with a characteristic temperature of ~255K; that is, from space the earth's spectrum is roughly that of a radiating body with an optical surface temperature…

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    3. John Newton

      Author Journalist

      In reply to Mike Swinbourne

      I concur. Mr Klein's mind, like those of his ilk, is like a steel trap. Unfortunately the trap is closed. Nothing that is said, no amount of proof will make him change his kind. And if we ignore them, they will go away

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    4. Alice Kelly
      Alice Kelly is a Friend of The Conversation.

      sole parent

      In reply to Berthold Klein

      So CO2 doesn't warm the planet Berthold? Care to show me proof of that?
      Gossip is not evidence.
      Here are a few Meteorological services who have a history in regard to observing weather and climate. Some of them have answers to your problem..
      The first is Australia, "Shaping up to be one of Australias hottest years on record" You can also click on the link, About climate change. http://www.bom.gov.au/climate/change/
      The next is the national service of the US, NOAA, they have an excellent explanation…

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    5. David Thompson

      Marketing Research

      In reply to Berthold Klein

      Sorry, Berthold, but that is just tedious spam. Go find some other corner to spruik crazy, we're full up here as it is.

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    6. Dennis Singer

      Student

      In reply to Berthold Klein

      Counterexamples and evidence please, not platitudes.

      Did you know that about 99.96% of the (dry) air composition of the atmosphere is composed of gases that aren't greenhouse gases (ie don't absorb IR radiation)? Did you know that if there was no CO2 in the atmosphere, the average temperature of the earth's surface would be about -15 deg C, instead of the current 15 deg C?

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  2. John Newlands

    tree changer

    Australia's CO2e emissions have hovered around the 550 Mtpa mark since the 1990s. I suggest a 5% reduction 2000-2020 is trivial with 15% being more worthy. Renewable energy accounts for about 13% of Australia's electricity with most of that coming from hydro built in the mid 20th century.

    Germany may be up around 30% renewables but at a staggering cost in subsidies. In 2013 Germany is hypocriticalIy opening five new coal fired power stations as they provide cheaper backup than gas. My guess is the Germans will never achieve 80% renewables penetration. There is already a backlash over power costs with Merkel threatening to repeal subsidies. In Australia I doubt there is much appetite for higher electricity prices.

    In terms of what is politically achievable renewable energy is unlikely to create the big carbon cuts needed.

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    1. Mike Hansen

      Mr.

      In reply to John Newlands

      "My guess is the Germans will never achieve 80% renewables penetration."

      My guess is that they will. And John - despite your deepest desires they are not going back to nuclear. The news from Fukushima just does not get any better.
      http://www.theaustralian.com.au/news/world/fukushima-radiation-leak-a-serious-incident/story-e6frg6so-1226701479672

      Here is an article that debunks most of the myths being propagated by the pro-nukers and climate change deniers about Germany.
      http://reneweconomy.com.au/2013/separating-fact-from-fiction-in-germanys-renewables-revolution-37327

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    2. Mike Hansen

      Mr.

      In reply to John Newlands

      John. Here is a tip. You are not James Hansen who devotes most of his time and resources doing science and dealing with disinformation from climate science deniers. 90% of your comments here are attacking renewable energy.

      On the coal plants that have been commissioned this year. When do you think those plants commenced construction. Like to phone a friend? 5 years ago, 10 years ago from the financing and planning stage? That is right - when Germany still had its entire fleet of aging nukes operating…

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    3. John Newlands

      tree changer

      In reply to Alice Kelly

      Subsidies for fossil fuel have been discussed at length before on The Conversation. The biggest item in dollar terms the diesel rebate doesn't apply to electricity. If we just had a full coverage carbon price (tax or ETS) with a tough CO2 cap but no RET we'd know where windpower stood in the mix without the need of a mandate. That way critics could say it succeeded on its own merits. As I said on another thread I think Australia will be a long time getting to 2m solar roofs.

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    4. Mike Hansen

      Mr.

      In reply to John Newlands

      Interesting but confused article John. I thought the following summed it up.

      "However, just as it is here, some three-quarters of them support the drive for renewable energy while at the same time belly-aching about the cost of their power bills."

      “energiewende” is a massive undertaking. I am sure the naysayers will have plenty to write about for years. Some of it will even be true.

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  3. William Boston

    Retired

    The problem is the power of the minerals, oil and other extraction industries. They can and will never accept that the materials that make up their assets in their balance sheets will ultimately become worthless. They are supported by the millions of large and small investors who depend on the income produced. Retirees like me depend on these returns to live in our comfortable world.. Hence we are lemmings heading for the cliff. Many of us will die before the jump, leaving the problem for our descendants…

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    1. Alice Kelly
      Alice Kelly is a Friend of The Conversation.

      sole parent

      In reply to William Boston

      I think many of them do know, (BHP). and are very busy protecting their $ as fast as possible, until legislation takes over. There are other nutters like the Koch brothers and aar Gina Rinehart, who are climate change illiterate and also protecting their "interests". One only has to look at the way she is treating her children to realise she would probably stop at nothing to ensure legislation does not get in the way of her coal mining interests etc.

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    2. Stephen McDonough

      Business Process Analyst

      In reply to William Boston

      Indeed. The urgency not to take action on climate change, but to extract as much wealth out of the resources sector as possible before it becomes politically and socially unacceptable to continue.
      As with everything in the private sector, the demand is to invest invest invest until the last dollar won't return a profit.
      Doesn't matter if you're investing in infrastructure, labor, advertising or lobbying - and it doesn't matter where the profit is made. Climate science is a threat to business, so it's about suppressing or shifting the debate.

      It's worth noting that cigarette companies are still around despite losing their battle with science decades ago. Even though the climate science is cutting through and we're actually talking about emission targets, a shift to renewable infrastructure globally will take a very long time indeed.

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    1. Alice Kelly
      Alice Kelly is a Friend of The Conversation.

      sole parent

      In reply to Michael Pulsford

      Michael, what you're doing is fantastic, and I will check it out. On the other side of the fence is the recalcitrant denier. I now recommend to them that they sink all their super into coal because it's all a hoax, and let me know how that turns out in 10 tears time. They are generally pretty interested in money...

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    2. Michael Pulsford

      Lecturer, RMIT School Of Art

      In reply to Alice Kelly

      Cheers! Yeah, there are plenty of people who are unconvinced, but I think it's largely counterproductive to argue with them. There's always new details to argue about and it never seems to get anywhere. I like your suggestion though!

      Personally I'm focused on organising amongst people who do think climate change is real and serious: the people who've changed their lightbulbs already but realise that doesn't approach the scale of the problem; the people who've lobbied their politicians and gotten…

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    3. Alice Kelly
      Alice Kelly is a Friend of The Conversation.

      sole parent

      In reply to Michael Pulsford

      Hey Michael, thanks for getting back to me. I look from afar at nice positive people like yourself. Myself, I'm a fighter, the surname says it all. So it takes all kinds together is my philosophy, different strategies, same outcome. Lots of talk to insist on action. Nature will help.

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  4. Chris Borthwick

    Writer

    A true enough article, except that it seems to believe that there is in fact a chance that we will evade our doom. We won't. Our children and grandchildren, if we have any, are going to die screaming. This seems as close to a certainty as there is, and I think anybody who phrases their arguments in any way that admits for any hope should be obliged to present a credible scenario for getting there that doesn't involve magic wands, waking up and finding it was all a dream, or people doing the right thing against their short-term economic interests.

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    1. Mike Hansen

      Mr.

      In reply to Chris Borthwick

      I am a bit more optimistic Chris. Climate change is a slow-burn problem. It is true that we have no way currently of getting CO2 out of the atmosphere so we are definitely committed to an amount of warming whatever happens.

      But you will notice even here at TC the bulk of climate science deniers are elderly. It is definitely a cause for older angry white conservatives. Over the next decade or two they will cease being the problem and will become part of the LNP's soil carbon solution. The vested interests will remain but at the same time the problem will become much more apparent.

      It does mean that decarbonising the economy will become much more difficult and expensive. But I am very confident that as a species we are up for the challenge.

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    2. Peter Taylor

      misanthrop at misanthropia

      In reply to Chris Borthwick

      Too true, Chris. The climate has already changed irrevocably, and it's happening faster than predicted. If the entire planet stopped burning fossil fuels today, the planet would continue to warm beyond the magical 2 degrees. If you haven't already read Clive Hamilton's Earth Masters, then I urge you to. It is widely recognised as the best summation, and most user-friendly book about the catastrophe that is unfolding. It seems to me that Governments are not doing anything because they know it is hopeless. Instead they're arming themselves to the teeth, secretly monitoring all dissent, and expropriating vast areas of land in Africa that they hope will provide food for them and their corporate backers and the devil take the rest of humanity.

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  5. David Arthur

    resistance gnome

    A/Prof Edwards, thanks for this article.

    I've no doubt it's well-meanng, but there are a few problems with a "carbon budget" approach. For one thing, it smacks too much of top-down, centralised, old-school Soviet-style planning: "WE will decide how much carbon we emit, and the manner in which we emit it".

    Instead of capping and trading, the demonstrably sub-optimal technique, wouldn't it make more sense and be more equitable, more efficient, less corruptible, to simply put a consumption tax on fossil fuels and apply the revenue to broad tax cuts? Every year thereafter, the rate of carbon tax is increased (with offsetting cuts to other tax rates) until the requisite decrease in fossil fuel use is achieved?

    The studied refusal of Climate and Grattan Institutes to countenance this much simpler idea goes to the absence of critical thinking which pervades them.

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    1. Mike Hansen

      Mr.

      In reply to David Arthur

      David. You are missing the point of the article. Try reading it again.

      This website will give you the idea.
      http://trillionthtonne.org/

      So the article is suggesting that we should think in terms of those remaining emissions (the carbon budget) being a precious resource that should be used wisely in decarbonising the economy.

      This has been suggested by a number of climate scientists as an intuitively easier to grasp explanation of the problem we face.

      "centralised, old-school Soviet-style planning". Sorry David but Godwinning is just a substitute for thinking. This article says nothing about tax in any event.

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    2. Alice Kelly
      Alice Kelly is a Friend of The Conversation.

      sole parent

      In reply to Mike Hansen

      Mike I don't know if you read yesterday a conversation "Break the carbon curse to curb global emissions" in the uk edition.
      http://theconversation.com/break-the-carbon-curse-to-curb-global-emissions-17338?utm_medium=email&utm_campaign=Latest+from+The+Conversation+for
      "Policy makers should be aware that the main division is not between advanced and emerging economies, but between fuel rich and fuel poor, " he said. "If you want to understand why a country has a high carbon intensity, it will tell you more to look at resources than other economic indicators. Put simply, scarcity leads to responsible use of a resource; abundance the opposite."
      This is obvious, but that policy makers attention should turn to the fuel rich nations to start cutting emissions. Like Australia. How on earth we think that we can continue to keep saying, but, and get away with it. No one in the rest of the world will notice?

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    3. David Arthur

      resistance gnome

      In reply to Mike Hansen

      Thanks Mike, I get the idea of a carbon budget.

      However, we've already spent 100% of our "carbon budget"; this is the point I'm trying to make to John Newlands in a comment that starts with "Thanks John. You write: ".

      You see, IF we say, "okay, we can afford to utilise a further X billion tonnes of emissions and stay below 2 deg C warming", we'll fail to stay below 2 deg C of warming because that 2 deg C warming will drive sufficient permafrost thaw and ocean warming to cause large outgassing of CO2 and CH4 from both.

      We also need to consider that a further 2 deg C of warming exposes numerous low-lying coastal cities to risks of large-scale storm damage and inundation.

      Agreed, the article says nothing about tax. However, the very notion of thinking in terms of a carbon budget can only be a precursor to some sort of emission capping scheme - centralised, old-school Soviet-style planning.

      Is it really Godwinning if I composed that phrase myself?

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  6. john tons

    retired redundant

    Let us assume for the moment that AGW is a myth - let us assume that the peer reviewed literature on the subject by climate scientists have got it horribly wrong. Can we then safely continue on a business as usual trajectory? The answer is even in that scenario we need to make the transition to renewables and make it fast. The first clue can be found by looking here http://www.youtube.com/watch?v=IAjQ-Xkexqw. Simon Michaux as a mining professional describes in vivd detail the problem we are facing…

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    1. Doug Hutcheson

      Poet

      In reply to john tons

      "Should we start to take population growth seriously?" Dead right we should! If we don't limit our population globally, Nature will do so for us, through starvation and pestilence, or we will do so through war over dwindling resources. Great future for the kiddies, innit?

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  7. Urs Baumgartner

    Consultant for Environment and Sustainability

    Great article Mark! You bring it to the point.

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  8. David Bindoff

    manager

    I agree with the thrust of this article. I am surprised by the budget figures. I had in mind from 3 years ago in the order of 550 gt and in the intervening years global emissions have been around 100gt so a range of 600 to 900 gt is a very much relaxed range, I guess it may depend on how you define reasonable chance of staying under 2 degrees.
    At this point it seems to me there is absolutely no reason to 'gild the lily' and understate the scale of the task.
    Given that we cannot avoid a further half degree or so based on already accumulated emissions considering that once we start to experience much more extreme conditions our capacity to respond will be diminished, it makes the utmost sense to act early and intensely.

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    1. Doug Hutcheson

      Poet

      In reply to David Bindoff

      "it may depend on how you define reasonable chance of staying under 2 degrees" and how you envisage the damage even as little as 2°C will do to the future habitability of our planet.

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  9. Doug Hutcheson

    Poet

    "The planet can only absorb a certain amount of additional carbon dioxide without destabilising atmospheric and oceanic systems." The big problem is we don't know with any certainty just what changes we have already locked in. The touted aim to keep global warming to 2°C is a political goal, not a scientific one. The science is clear in warning us of the inevitability of changes to our climate, but we don't have a second Earth to practice on, so we have no way of knowing how much damage will be done through 2°C warming. The chances of keeping below 2°C are vanishingly small, given the apathy of the populace toward emissions reduction. Yes, I know that it is possible, but I'm afraid I don't regard it as probable.

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