The madness of king coal


As the deindustrialisation of Australia gathers pace we will inevitably become more reliant on the resource sector. And yet of all the reasons for being sceptical about the resource sector’s capacity to pick up the slack in the Australian economy⎯it doesn’t employ many people; it’s prone to booms and busts; it’s overwhelmingly foreign owned⎯one deserves more attention. Or it does in the case of the coal industry, at least.

Coal is Australia’s second largest commodity export and undoubtedly a major contributor to the currently positive balance of trade. But even if we think that a trade surplus is a cause for national celebration – and that’s far from clear given the complexity of contemporary transnational trade patterns, of course – should we rejoice at coal’s contribution to this?

If there is one thing we know about coal it is that its use around the world is contributing to climate change. This is not the place to argue the toss about global warming, but if for the sake of argument we accept the scientific consensus – as I do – it is clear that CO2 emissions from coal are a major and growing problem. Indeed, Greenpeace claims that coal-fired power plants are the single biggest source of man made carbon dioxide in the atmosphere.

If human beings are ever to take meaningful action in response to the increasingly well-understood and evident consequences of climate change, then restricting the use of coal would seem an obvious place to start. While hope springs eternal, no doubt, pessimists have some persuasive arguments when it comes thinking about why this is unlikely to happen.

The principal argument put by coal’s defenders is that it’s cheap, abundant and a key source of energy for the developing world. We exploited coal during the West’s industrialisation so why shouldn’t the developing world? It’s not a bad argument, but it ignores the fact that the planet’s capacity to absorb CO2 emissions was much greater then and that we know what’s going on now – even if some are wilfully and depressingly unable to admit it.

Given the continuing importance of coal in places such as the US and Australia, it’s difficult for the West to strike moral attitudes, much less provide leadership, on this issue. Indeed, Germany has actually increased its use of coal in the wake of the nuclear disaster at Fukushima. This is unfortunate to say the least as, because for all its undoubted drawbacks and dangers, nuclear power looks like one of the essential components of any energy mix in a warming world.

Australia could show real international leadership on this issue, but almost certainly won’t. This is not a cheap shot at the Coalition, as its predecessor was equally remiss, despite all the lofty rhetoric about the ‘greatest moral challenge of our time’. The reality is that governments everywhere continue to privilege national interests above collective ones, and are encouraged to do so by powerful, well-organised lobby groups and the sheer difficulty of reaching effective international agreements.

Under such circumstances it is hardly surprising that, as the Australian Coal Association proudly declares on its website, ‘over the past 10 years black coal exports have increased by more than 50%’. Much of this has gone to northeast Asia and constitutes a key part of our ‘engagement’ with that part of the world. It is also contributing to the catastrophic pollution that is causing such problems in China. Whether this is a sustainable basis for our regional ties, either politically, economically or even strategically is a moot point.

It is important to remember that even if only some of the projected consequences of global warming and climate change prove to be accurate they will have potentially profound consequences for international security. It may be unreasonable to expect democratically elected political leaders to fret about 50 year time horizons, but if someone doesn’t our collective prospects look bleak.

The great hope among industry’s supporters in Australia is that the most improbable of oxymorons, ‘clean coal’, will become a reality. Despite an estimated $25 million of public money having been poured into trying to develop it (the same amount Ardmona asked for, as it happens), no substantial progress has been made. It is hard not to conclude that the search for clean coal has been a monumental exercise in wishful thinking, but one that implicitly acknowledges the unforgiving nature of the underlying problem.

As with so much else these days, the solution to this problem, if there is one, probably rests with China. There is no doubt that Chinese authorities are very concerned about the potential for social unrest that pollution from the coal-fired power stations around cities like Beijing is causing.

Whatever China does will make a major difference for good or ill. We must hope that China’s authoritarian leaders engineer a shift away from one of ‘our’ key exports and ultimately force producers to curb their output. Market forces may have their uses, even if they have to be given some direction by powerful states at times.