Guest essay by Eric Worrall
Is Australian coal still “naughty”, if the coal is burned in China?
Aussie PM Tony Abbott has infuriated greens in the last few days, by approving a gigantic new coal mine in the state of New South Wales.
According to Breitbart;
Last week a contentious A$1.2bn open cut coal mining project was given the thumbs up by the Environment Minister, Greg Hunt, allowing for 268 million tonnes of coal to be extracted until 2046. The mine is in the state of New South Wales. The project, the third begun under Mr Abbott in less than 12 months, was approved after rigorous environmental testing and consultation with the local community.
Yes, there were Green Party opponents who called the mine ‘disastrous’ and ‘economically insane’, but in the end the mine went ahead because of the national interest.
Mr Abbott’s stated belief is that fossil fuel not renewable energy holds the key to a viable future – not just in Australia but across the developing world. In November last year he said:
“For the foreseeable future coal is the foundation of prosperity. Coal is the foundation of the way we live because you can’t have a modern lifestyle without energy, you can’t have a modern economy without energy.
“So if we are serious about raising people’s living standards in less developed countries, if we are serious about maintaining and improving living standards in countries like Australia, we have to be serious about making the best use of coal.”
However, Breitbart also cites an interesting statistic, that 73% of Australia’s coal is exported, presumably mostly to China.
President Obama has effectively granted China a “free pass” until the 2030s, to emit as much CO2 as they want. So there is no problem with China digging up vast quantities of their own coal, and burning it in Chinese power plants.
But why does the coal China burns have to actually be mined in China? If a given quantity of coal is going to be burned anyway, thanks to China’s free pass, doesn’t it make sense for as much of that coal as possible to be mined in the most ecologically friendly fashion possible, in tightly regulated Australian mines?
If Australia mines the coal, but the coal is burned in China, who carries the green “guilt”? Is the burning of the Australian coal in China sanctioned by China’s free pass, or does the coal count against Australia, even though the coal is being burned in China? Or does Australia have to accept shame just for the amount of coal in transit, which is instantly transmogrified into “good coal” when it crosses the Chinese border? Or does Australia only have to feel green guilt, if it can be demonstrated that the Australian contribution has increased the total quantity of coal which China is burning, over and above what they would have burned were they fully dependent on domestic supplies? In this case, would Australia only have to feel green “guilt”, for this hypothetical surplus?
If it is agreed that Australia has created such a surplus, can Australia’s green “guilt” be assuaged by scaling back Australian production, to eliminate the Australian sourced surplus, and filling the resulting demand gap with coal sourced from China? So any consequent overall surplus is purely a decision of China, and therefore sanctioned by the Chinese CO2 free pass?
If this is unacceptable, could some Australian coal mines be temporarily redesignated as Chinese embassies, and therefore become technically part of the People’s Republic of China? Australia of course would be entitled to charge a “rent” for land occupied by China embassies – said rent to be approximately the income the Australian government would have made, by taxing Australian coal producers who would otherwise have mined coal from the redesignated Chinese embassy land?
In any case, shouldn’t greens be encouraging Australia to help China minimise their ecological footprint, by encouraging Australia to export as much coal as possible, to minimise the amount of coal sourced from less regulated Chinese facilities?
You could actually make a scientific argument that China burning coal has absolutely no effect not only on temperature but also on total CO2 in the atmosphere. During the last 20 years not only has there been little or no warming of the lower troposphere, but also no increase in the rate of increase of atmospheric CO2, which has styed close to 2ppm per year. Meanwhile, China’s CO2 production has doubled – they are now the world’s largest producer of CO2.
Have a look at http://www.esrl.noaa.gov/gmd/ccgg/trends/#mlo_growth There is unsteadiness in the trend because a hot year has some of its CO2 removal by nature being postponed to the next year. The longer term trend of increasing growth rate of atmospheric CO2 shows through.
Hmmmm, Pinatubos and Superninos both show.
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In his dreams.
China has granted China a free pass, until such time as they feel like changing it.
Perhaps we should be discussing the long term logic of again allowing fully foreign owned companies to dig up said coal and to profit offshore and largely tax free from its export sale. Of course the Chinese would be silly to dig up and diminish their own reserves when Oz provides an All You can dig smorgasboard. Funded by cash artificially generated in their own banking system (yeah, we ain’t smart enough to do that within our own country, right?)
This further compounded by Abbot’s ‘brilliance’ in ‘Free Trade’ negotiations that will allow the import of skilled (on the basis of their own paperwork) O/S workers (on the basis of their own paperwork) to take the jobs.
Its a complex subject, but I suspect tax rates might be the reason Australian companies fall behind.
Companies based in Hong Kong and Singapore pay much lower taxes, so its much easier to attract investment – the post tax profit returned to investors is higher.
Since Australia finds it difficult to make domestic companies financially attractive, the next best thing is to allow foreign companies to do their thing, but take a slice of the action.
Agreed, Eric, it is a complex subject.
If it is only tax, then we should be smart enough to create a sovereign wealth fund type holding company, (ie Temasak Holdings style), then provide favorable tax breaks to the ‘working’ company (often, in Singapore style, 51% owned by Temasak anyway).
That always brings the free market supporters out howling, but the alternative is to give away vast sums to foreign entities, shareholders and foreign taxation authorities for a relatively small slice of the full value.
It is worth noting Temasak is now in the process of divesting some of their businesses – apparently under the mantra of free markets. Given their past success in rapid development of their country, it is interesting to contemplate what has changed their thinking. I’d suspect of new generation of ‘free market literal adherents’ coming through, not quite realizing the significant advantage of keeping a firm hand on the tiller and in the cash register.
We could do it the Norwegian way.
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Statoil ASA, (OSE: STL), is a Norwegian multinational oil and gas company headquartered in Stavanger, Norway. It is a fully integrated petroleum company with operations in thirty-six countries. By revenue, Statoil is ranked by Forbes Magazine (2013) as the world’s eleventh largest oil and gas company and the twenty-sixth largest company, regardless of industry, by profit in the world. The company has about 23,000 employees.
[…]
As of 2013, the Government of Norway is the largest shareholder in Statoil with 67% of the shares, while the rest is public stock.
https://en.wikipedia.org/wiki/Statoil
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CURRENT ACCOUNT BALANCE BY COUNTRY (2014):
============TOP TEN IN CREDIT===============
1 Germany $257,700,000,000
2 China $204,300,000,000
3 Saudi Arabia $108,700,000,000
4 Netherlands $79,200,000,000
5 Korea, South $79,000,000,000
6 Switzerland $76,200,000,000
7 Kuwait $66,050,000,000
8 Singapore $62,580,000,000
9 Taiwan $59,810,000,000
10 Norway $58,000,000,000
============TOP TEN IN DEFECIT===============
184 Indonesia -$25,490,000,000
185 France -$33,900,000,000
186 European Union -$34,490,000,000
187 Australia -$37,000,000,000
188 India -$42,990,000,000
189 Turkey -$47,460,000,000
190 Canada -$50,800,000,000
191 Brazil -$80,920,000,000
192 United Kingdom -$117,900,000,000
193 United States -$385,800,000,000
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2187rank.html
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Are we too stupid to own and exploit our own resources?
http://www.theage.com.au/environment/chinese-company-may-sell-latrobe-valley-brown-coal-briquettes-locally-20140901-10b2un.html
The overall tax rate on investments is much higher in Norway (~48%, corporate + dividends) compared to here (30% flat, includes dividends), btw.
As a follow on to my previous comment, I am completely baffled as to what you are all celebrating in this case.
Life.
It’s only a conundrum if you make it one.
It’s a good thing Australia is not downwind of China…..they don’t have to deal with the Chinese smog.
Yes, when the CO2 angle doesn’t work, throw in smog. That’ll work.
Great heavens! Guilt and blame? Better credit and thanks. The mild warming and great greening of man’s pitiful aliquot of fossilized carbon is a boon, a benefit and a blessing. The biosphere is carbon dioxide starved and always likes it warmer.
We’ll figure it out, or perhaps leave it to our grandchildren to figure out.
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A vegan friend of mine told me they now have a coal substitute made out of tofu.
Why is coal even an issue? And does it matter where the coal comes from, or goes to? It is one planet – not an allocation of arbitrary, man-made regions.
This presupposes the discredited proposition that CO2 is a pollutant and a hazardous threat to mankind. Why is it worth a mention?
Coal is of zero value when sitting in the ground, undeveloped. Even it cannot be economically extracted, it may be a source of methane gas. But it should be clear to anyone with open eyes and a sound mind that greens care far more about destroying human prosperity than they care about the environment. How else can you explain their distinct silence on the issue of developing safe nuclear power?
Stop and consider how many billions of dollars of subsidies that government have had to shell out in order to make “renewable” power sources economically sustainable. Well the dirty secret is that renewable power is NOT economic or else China would not want to buy so much Australian coal, given how many solar panels are made in China. For all the subsidies for solar and wind power, we could have safe and clean nuclear power at this very moment. All this waste and fraud makes my head explode.
Next up: government gets exhausted of paying subsidies, cuts them. As subsides wane and power contracts lapse, wind power companies no longer can pay for service and upkeep of unused wind turbines. They fall into disuse and start to become dangerous eyesores. New environmentalist program: to properly decommission dangerous wind turbines left by “greedy” utilities who only put them up to “take advantage” of subsides. Dirty capitalists.
Standard ethical analysis here: Can alcohol be used in a ‘sinful’ way? Sure. Is every use of alcohol ‘sinful’? No. So if you sell alcohol as such, there is no guilt attached to you. But if you sell alcohol to people who express an intent to use it for ‘sinful’ purposes? Then you are complicit in their sin. Related by similarity, if you sell alcohol to a man that is drunk, you are complicit in his drunkenness.
The media at steady intervals have echoed the many accidents which have striken and continue striking the chinese coal mines due to the poor safety standards inherited from the communist period.
In my opinion, the modern way of coal mining in Australia instead of China will spare a lot of chinese workers’ lifes. Who would be so stupid to oppose this except the environmentalists?
Greenhouse gases are only a part of the issue with this mine.
It is mostly about new development within well-established farmland and using fear of contamination to farming practices to maintain an existing land based monopoly, and also using fear to sell media stories and keep alarmist academics employed.
It’s very similar to the Diana syndrome, every bit of information is twisted to sell a story and invoke a public reaction, but in this case based on fear rather than based on social status and image. The media have learnt that they can sell a story based on potential fears, so with any new development this is what now occurs, and mining is one of the best chestnuts to do this with. It hardly matters that every report on this development states that water for farming will not be effected.
Not quite true. The Chinese said they would peak CO2 emissions in 2030 or earlier.
There was a general recognition in the West among those doing calculations on future CO2 emissions that, to peak CO2 in 2030, China would have to peak coal use in 2020. The Chinese went on to publicly state they would peak coal use in 2020 or earlier. Encouraging that the Chinese think the same.
However, there is evidence now that China actually peaked coal emissions in 2013, not 2020.
http://d35brb9zkkbdsd.cloudfront.net/wp-content/uploads/2015/05/China-Coal-5-15.jpg
By April 2015 coal use in China was 8% down from the 2013 peak, while GDP was still growing faster than 7% pa. 2014 whole year was 2.9% down on 2013 coal use. Some of this is a result of displacing coal power generation with natural gas generation – which typically produces only half the CO2 emissions. This is what has happened in Beijing, which has already replaced 3 of 4 coal stations with gas stations (with higher net capacity each), and the last Beijing coal generating station is scheduled to close in 2017.
China recognises that 350,000 to 600,000 people die early each year as a result of air pollution, and this is mainly due to coal burning. London is not so different, by the way, with recent estimates of up to 10,000 people per year dying early, though most of this is to do with traffic fumes, especially diesel. Anyway, the Chinese people do not like this and the government are pretty determined to do something about it.
It is difficult for the Chinese leaders to make the Chinese economy change directions, but once the change has started, then it is easier to persuade hearts and minds when you can arbitrarily imprison people who do not toe the line. So the change in coal consumption is probably real and has been planned.
If coal use never again rises above the 2013 peak then it is likely China will peak CO2 emissions in 2025 rather than 2030.
And lastly, there are many who believe the Chinese government would not ever say “or earlier” unless they had a cast iron plan to make sure the peaks happened earlier, because of the impact of a loss of face. This supports a 2013 coal peak and a 2025 CO2 emissions peak.
So, whatever Obama and the US think China may or may not have agreed to, there are strong internal Chinese reasons to peak as early as possible, and significant evidence that they may already done this with the first peak coal milestone (which was not a part of the agreement with the USA).
Climate Pete
You say
Clearly, you don’t understand what that means, so I will explain it for you.
When politicians say they will do something decades in the future then they are saying they have no intention to do it.
2030 is 15 years in the future and was more than 20 years in the future in 2009 when the Chinese said they would peak CO2 emissions BY 2030. The Chinese did not then state – and have not yet stated – any plans they are adopting to achieve the peak. This demonstrates that they don’t intend to do it.
Perhaps you cannot understand this, so I will use an analogy in attempt to assist your infamously low abilities at comprehension. A politician promising to do something decades in the future is like someone saying they will make a New Year Resolution when New Year arrives. Subsequently, the Resolution is said to be adopted when New Year arrives but the Resolution is soon seen to fail: this failure is because a Resolver who really intends to do something does it when he decides to do it and does not wait until New Year before starting to do it.
Richard
Richard,
Let me explain to you the extreme cynicism of your position. You wish to believe that China is doing nothing and intends to do nothing about coal or CO2 because that would fit well with your world view. This is pure wishful thinking on your part, and not based on any evidence.
Politicians, even those with absolute power like the Chinese communist party, tend to do what the population wants because it is generally best to keep the people happy. Here are the results of the latest YouGov international poll on climate change :
Note that only 3% of Chinese support no action on climate change or do not know sufficient about it to form a view. This is hardly surprising in a country with so many deaths from air pollution due to coal. Most people there are going to equate fossil fuel burning with “coal” as that is the vast majority of it in China.
So the only real debate among the Chinese is whether they should go “fast” or “faster” in reducing CO2 emissions. And 60% are saying “faster”. “Fast” is in relation to the USA right wing’s suicidal efforts to stop any action on climate change, by the way. There is no opposition to speak of (1%) in China to solving the problem of climate change compared with 7% and 17% in UK and USA. Action on CO2 emissions is therefore inevitable in China because the support for it is unanimous.
If you would like to modify your opinions to be evidence based instead of “convenient gut feel” then the Chinese UNFCCC submission is the fifth among submissions UNFCCC submissions for countries covering more than 60% of CO2 emissions.. This shows what the Chinese have already done, as well as the plans for 2020 and 2030. It may open your eyes.
Climate Pete
Let me explain to you that you are spouting nonsense.
Firstly, there is no “cynicism” in my “position”. As always, I am being realistic.
China has no stated policy and/or plan to reduce CO2 emissions.
That is NOT “pure wishful thinking”: it is fact.
Your claim that China has such a policy and/or plan is delusional.
And the degree of your delusion concerning communist China is demonstrated by your writing this
So Mao’s ‘Cultural Revolution’ and China’s ‘One Child Policy’ either did not happen or were attempts “to keep the people happy”? Do you really manage to delude yourself with that nonsense because it fails to convince anyone who has any sense?
And you provide reported results of an opinion poll conducted in a totalitarian country. If you really have convinced yourself that those ‘results’ are “evidence” of anything then it is no wonder you support the AGW-scare; clearly, you will believe anything that supports your prejudices however ridiculous the something may be.
Richard
Richard,
Straight question here.
Have you actually read the Chinese INDC submission on the link I posted or not.
“Yes” or “no” would do.
Climate Pete
Yes, I have read it.
I am telling you that you don ‘t understand it (which is typical of your posts).
Richard
Richard has clearly taken leave of his sentences. He believes there are alternative readings other than the obvious of passages such as :
Again, one wonders what alternative explanation Richard finds for what is a very clear statement which shows China is on track for meeting its 2020 climate targets, as set forth in 2009.
And now we have commitments such as :
Did Richard know that China has a national programme on climate change? Of course he didn’t. He explicitly stated above that there was no such plan. Would he know where to find it? No. He has never bothered to search for the English version of the Chinese government web site, preferring instead to believe it does not exist, whereas an obvious Google search gets you straight there. Incidentally it’s at http://en.ccchina.gov.cn/ to save Richard even that trouble.
And lastly,Richard appears somehow misunderstands the following Chinese statements :
Why should we believe the Chinese are serious about their 2030 targets? That is because they are already broadly at least half way there based on their 2009 commitments.
And as for “misunderstanding”, it is clear that for Richard, “convenient gut feel” trumps factual statements and public commitments.
The climate change commitments of most of the key nations are now on the UNFCCC web site. See http://www4.unfccc.int/submissions/indc/Submission%20Pages/submissions.aspx . China is but the most important example.
Climate Pete:
I have NOT taken leave of my senses. The problem is that you have yet to obtain any sense.
I repeat;
When politicians say they will do something decades in the future then they are saying they have no intention to do it.
And I repeat;
China has no stated policy and/or plan to reduce CO2 emissions.
That is NOT “pure wishful thinking”: it is fact.
Your claim that China has such a policy and/or plan is delusional.
An assertion that they hope to do something in the future under a title of “National Program on Climate Change (2014-2020) and provincial climate programs” is pure propaganda.
I also repeat;
And you provide reported results of an opinion poll conducted in a totalitarian country. If you really have convinced yourself that those ‘results’ are “evidence” of anything then it is no wonder you support the AGW-scare; clearly, you will believe anything that supports your prejudices however ridiculous the something may be.
You say you are impressed by reduced emissions per unit GDP or per person: such reductions are NOT reductions to actual emissions.
And you demand that I provide an alternative to your idiocy. No, I will stick to addressing reality.
In conclusion, I repeat;
I am telling you that you don ‘t understand the document you have cited (which is typical of your posts).
Richard
[snip – you aren’t a psychologist, but an anonymous troll attacking people that use their real name in an attempt to defame them. That was way over the top. Get off my blog, you’re banned. – Anthony]
Left Australia tries to block an inland coal project by the Indian Adani company; the Chinese on the other hand get a free pass. Hypocrites!
and no regress to renuable timber. Everyday Chopsticks for 1.3 bl. left just 1 wood – near the town of the heavenly palace, bejing.
The wood itself is sacred by the grave of the 1.st chinese.
Hans
The energy in coal was originally solar energy captured by ancient plants. Just designate it as delayed renewable energy and the problem is solved.
Absolutely true! Coal at it’s core is the most viable solar energy solution we have!
And it’s directly responsible for more greening of the planet than all of the windmills and solar panels combined!