Guest essay by Eric Worrall
Just in case you thought the politician in charge of Australia’s financial stability has a clue, the following interview with the Guardian should settle any doubts.
Josh Frydenberg admits climate change a major preoccupation in global markets
Treasurer says there are ‘lots of internal conversations’ on whether Australia could make a firm net zero commitment at Cop26
Katharine Murphy
Political editor @murpharoo
Sat 28 Aug 2021 06.00 AESTJosh Frydenberg has acknowledged that managing carbon risk is now a major preoccupation in global capital markets as the Morrison government mulls what commitments it will take to the Cop26 in Glasgow later this year.
While Nationals have incorrectly characterised managing carbon risk as virtue signalling on multiple occasions, the treasurer told Guardian Australia’s politics podcast that climate change, and the assessment of carbon risk, was now “influencing global capital markets in a significant way”. He acknowledged it was a “factor behind financial stability”.
“We are going to see more and more climate-related disclosure and regulatory agencies are across that, both here and overseas,” Frydenberg said. The treasurer acknowledged with the world moving to constrain carbon emissions in line with the Paris agreement goals, there were now “material risks” to Australian businesses.
He said he had spoken recently with Mark Carney, the former governor of the Bank of England, about international developments. “He’s been very engaged in this and it was a very interesting discussion.
“I talk to the central bank governor, Phil Lowe, and he says this is a major topic at central bank governors’ meetings – so yes [climate change] is influencing in a significant way global capital,” he said.
Frydenberg said he had been clear on budget night back in May that he wanted Australia to reach net zero emissions by 2050, or sooner. “I take this issue very seriously,” he said.
“I’ve been very consistent that climate change is real and man is contributing to it and we need to take relevant actions to reduce our emissions.”
…
Read more: https://www.theguardian.com/australia-news/2021/aug/28/josh-frydenberg-admits-climate-change-a-major-preoccupation-in-global-markets
Aussie treasurer Josh Frydenberg understands that Australia’s intransigence on announcing a net zero target is causing problems with access to capital markets, and I fully accept this is the case. But you would expect Josh to understand purely economics related issues – he does have an economics and law degree.
What he clearly in my opinion does not understand, is that net zero by 2050 is impossible. Even a nation with as much sunlight as Australia cannot afford to assemble the materials required to hit net zero, let alone build the required infrastructure, in any reasonable timeframe.
How can someone who understands numbers fail to understand the technological limits?
The answer to this paradox as far as I can tell is blind faith in technological innovation, and a big dose of groupthink. In my opinion they fully expect a magical energy innovation to appear any day now, to save the situation.
I once had a one on one conversation with a senior federal Australian politician, asked her about how her colleagues could fail to understand the obstacles to going 100% renewable. She was in despair. She said “They’re not listening to me. They tell me I’m wrong, but they do not understand the issues.”.
Even the recently announced Physical Retailer Reliability Obligation – nobody in their right mind would think that was any more than a temporary measure, and I’m sure this is how senior Australian politicians see it – a short term stopgap to maintain stability, until the magic appears.
I fully expect Prime Minister Scott Morrison to make a net zero commitment in November in Glasgow with the full support of his cabinet, come home the climate hero, and announce a snap election early 2022. Not because he and his fellow politicians are idiots, or bad people. But because from their limited understanding, they have faith it will all work out – they believe the required magical innovations will appear in time to save the day, and life will go on as normal.
…
“An unlimited market, Mr. Rearden?” the purchasing manager asked dryly.
Rearden glanced up at him. “I guess I’m not smart enough to make the sort of deals needed nowadays,” he said, in answer to the unspoken thoughts that hung across his desk.
The purchasing manager shook his head. “No, Mr. Rearden, it’s one or the other. The same kind of brain can’t do both. Either you’re good at running the mills or you’re good at running to Washington.”
“Maybe I ought to learn their method.”
“You couldn’t learn it and it wouldn’t do you any good. You wouldn’t win in any of those deals. Don’t you understand? You’re the one who’s got something to be looted.”
…
Source: Atlas Shrugged
Just make all the right noises and do nothing about it.
Unfortunately there is a big cultural expectation in the West that governments make a serious effort to fulfil their commitments.
Most of the time this is a good thing, but not this time.
I wish they were doing nothing, it’s the clumsy interventions which are causing the harm.
Like the renewable energy subsidies and handicapping of coal fired generators and then withdrawing those subsidies as the wind and solar businesses’ damage and inefficiencies became obvious.
And now considering subsidies to encourage continuation of coal fired power stations that have not been well maintained as profitability declines.
They should all pick a MW capacity they can guarantee for #hrs or days. Shift the responsibility of reliability onto all generators to have themselves (or contract others) to provide a reliable supply.
So a 300MW wind farm could guarantee 90MW with 90MW BESS (36hrs then needs 3240MWh), gas or any other combination of technologies. Market forces determines the right mix.
I understand wind farms capacity arent based on rated out put of the turbines. Instead they use the ‘average wind speed at the location’
By that means you get 40% output.- instead of the actual 10-15%.
Of course average water flow isnt used for hydro schemes, nor is average used in coal stations. They are held to the higher standard of maximum sustainable output.
The system operators of course cant use averages as they want to know the actual output in the next half hour.
I wonder what magic formula they will come up with for grid battery farm storage output as we know its going to be 5% or less ( yes they have to recharge at some stage)
…. And do nothing about it”
Josh
You can do your duty with a mix of energy sources planned by competent engineers, while resisting economic blackmail planned by rogue financiers and by listening to climate change evidence from competent scientists.
Aussies are under no obligation to bow to incompetent green ideologies.
That course is not hard.
Geoff S
If you have stuff (resources) that people want, you can get financiers to back you.
Josh is a beLIEver of CAGW. It’s about net-zero by 2050. You can put out all sorts of documents that Australia is a net sink, but he doesn’t want to do it.
It would appear that the only useful tactic for a politician is some variety of making the appropriate pious comments, while doing something else entirely. Consider the example of the People’s Republic of China.
A cynical engineer once commented to me that whatever politicians say, think the opposite.
And when the politicians have opposite views what do you think then? Should the UK be in the EU or not? Should Scotland be independent or not?
Net Zero CO2 concepts are scientifically and economically ridiculous – the prattling of fools.
It is a problem when your Federal Treasurer is innumerate, and also apparently illiterate. We understand and sympathize with Australia. In Canada, our Prime Minister and our Finance Minister are cut from the same ignorant fabric. How is it that we elect such incompetents?
Most voters in the western democracies are imbeciles, and elect politicians most like themselves.
https://www.youtube.com/watch?v=X2q9BT2LIUA
The opening of Lindzen’s lecture explains it all.
Good link, also from ~ 36min Linzden discusses the social and political aspects.
Has the Treasurer produced a cost-benefit analysis and produced an economic report on what the economy would look like by 2050 if the economic vandalism proceeds?
Will he quarantine the worst hit industries like the New Zealand Government is doing? The net zero emissions selective plan.
Are any of you questions relevant to what he has expressed as his reasons for his views? To me, it doesn’t seem so.
From the photo it seems barber shops are closed in both Indonesia and Australia.
Its a great picture. The man in charge of destroying the Australian economy and the woman in charge of destroying Indonesian rain forests
Eric, all these politicians and bureaucrats can afford to make 2050 promises, because none of them expect to be around to be accountable.
We don’t have to wait until 2050 to feel the impact Mr., our electricity grid is already a train wreck, thanks to useless renewable plants springing up like mushrooms, and operators of dispatchable systems running their plants into the ground.
It is about 50 years since there were more than a dozen intelligent politicians in Australia. The recent government actions on the ‘Climate Change’ fraud and their reaction to the Covoid-19 outbreak have provided absolute proof of this.
“Wish in one hand, shit in the other, see which one fills up first.”
― Stephen King, The Dark Tower
The picture Eric provided looks like Abbott and Costello.
One could pretty much do a “Who’s on First?” routine with those Climate Clowns.
The problem in Australia is that so many areas are subject to fairly regular periods of either excessive rain causing flooding, or less-than-average rain causing droughts. From proxy records, we know these alternations have been occurring for millennia. Analyses of ice cores from Law Dome in the Antarctic have provided a record of 8 megadroughts that have occurred in South East Australia during the past 1,000 years. Six of them occurred before the industrial revolution, and the worst was a 39 year drought that occurred in the 12th century AD.
There is no good reason to suppose that similar events will not continue, even if CO2 emissions are reduced. However, protecting ourselves and our property from such events would require a massive increase in the use of fossil fuels to build more dams, to reshape the landscape and improve drainage to prevent flash flooding, to elevate roads across creeks, to strengthen houses in areas subject to cyclones, to relocate residents who have foolishly bought houses in flood plains, and so on, and on. Not to mention the creation of a new industry to manage the forest areas and reduce the fuel on the forest floor through regular burn-offs during ideal conditions.
This whole AGW thing is almost like the Cosmic Big Bang and gravity.
There is nothing happening (the climate) but there is massive activity underway. When this bubble goes “bang” – chaos will follow and what force will reinstall order?
John,
you ask – “When this bubble goes “bang” – chaos will follow and what force will reinstall order? “
Some fear it may be the Chinese – with their famous toleration!
Auto, hoping I’m old enough not to be around when the daily ration is a handful of rice, per man, per day, perhaps.
Maybe Morrison and Frydenberg have finally learned to do what the other scummy hypocrites in Beijing, New Zealand and EU-commie states do? Namely, claim to be saving the world with spectacularly unrealistic and suicidal ‘target’ declarations and then do absolutely nothing of any value or effect, while mouthing incredible platitudes and issuing a stream of endless lies and virtue-signals, while wearing permanent Concern-Face™.
Being honest and truthful is going to get us nowhere against these vile scammers and outright frauds. Doing exactly what they do, play fake global leader and savior, is the much better strategy.
The courts, ruling on lawsuits, are making that approach untenable where courts have power independent of the politicians.
NZ was already 80% or so renewable energy production so has a smaller ( but unrealistic mountain to climb)
Australia has previously agree to reduce its net emissions by 28% or so by 2030, ( Paris remember)it better start making some scummy promises/closings as Coal and gas is 85% of power production.
“… blind faith in technological innovation …”.
I can’t find it now but I remember Frydenberg when energy minister in a speech assuming an equivalence between past advances in computers and future advances in renewable energy as if Moore’s Law applied to the latter.
NEWSFLASH!!!
Australian Politicians Take Chinese Money Still Greedy One Hour Later
Net Zero what? Hair?
The way I interpret it is that the current conservative Australian Federal Government, knowing the consequences, is trying to do nothing on this commitment however they recognise that stupid international (ie. European) financiers will attempt to extort action by withholding funding.
Unfortunately even on the conservative side of Australian politics there are a minority of the usual ignorants and bed wetters who either believe in AGW or believe they will lose votes if they don’t appease the screaming Greens and panicked loons. We can only hope they remain in the minority.
If they weren’t trying to do anything I’d be a lot happier. Unfortunately they seem to be true believers, a lot of them are anyway.
Isnt Morrisons and Frydenbergs BIGGER problem is Australia is no where on track to 26-28% emissions reduction target for 2030 as Australia agreed to at Paris 2015. Signing came later
In reality, continental Oz is a natural net caaaarbon sink.
Quadruple the population with the attendant emissions, and there might be something to talk about vis-a-vis reductions.
Until then, Oz is just doesn’t rate as even a starter in the Reduction Stakes, let alone a 100-to-one outsider.
Australia is lost. We have ex-lawyers making medical decisions for 8+ million people let alone energy decisions.
The financial guru is not an engineer,
He has near-zero education and experience in energy systems analysis
He has not a clue regarding the implications and cost of “NET-ZERO”, and easily uttered slogan.
“Electrify Everything”; an easily uttered slogan
It would require:
– Additional power plants, such as nuclear, wind, solar, hydro, bio
– Additional grid augmentation/expansion to connect wind and solar systems, and to carry the loads for EVs and heat pumps
– Additional battery systems to store midday solar output surges for later use, i.e., DUCK-curve management.
– Additional command/control-orchestrating (turning off/on appliances, heat pumps, EVs, etc.) by utilities to avoid overloading distribution and high voltage electric grids regarding:
1) Charging times and duration of EVs and heat pumps
2) Operating times of major appliances
3) Demands of commercial/industrial businesses
WORLD AND US PRIMARY ENERGY CONSUMPTION AND CAPITAL COST
https://www.windtaskforce.org/profiles/blogs/world-total-energy-consumption
World energy consumption is projected to increase to 736 quads in 2040 from 575 quads in 2015, an increase of 28%, according to the US Energy Information Administration, EIA.
See URL and click on PPT to access data, click on to page 4 of PowerPoint
https://www.eia.gov/outlooks/ieo/
Most of this growth is expected to come from countries not in the Organization for Economic Cooperation and Development, OECD, and especially from countries where demand is driven by strong economic growth, particularly in Asia.
Non-OECD Asia, which includes China and India, accounted for more than 60% of the world’s total increase in energy consumption from 2015 through 2040.
PARIS AGREEMENTS
China, India, and other developing Asian countries, and Africa, and Middle and South America, need to use low-cost energy, such as coal, to be competitive. They would not have signed up for “Paris”, if they had not been allowed to be more or less exempt from the Paris agreements
Obama agreed to commit the US to the Paris agreements, i.e., be subject to its financial and other obligations for decades.
However, he never submitted the commitment to the US Senate for ratification, as required by the US Constitution.
Trump rescinded the commitment. It became effective 3 years later, one day after the US presidential elections on November 3, 2020.
If the US had not left “Paris”, a UN Council likely would have determined a level of renewable energy, RE, spending, say $500 billion/y, for distributing to various poorer countries by UN bureaucrats.
The Council would have assessed OECD members, likely in proportion to their GDPs.
The US and Europe would have been assessed at 100 to 150 billion dollars/y each.
The non-OECD countries likely would continue to be more or less exempt from paying for the Paris agreements.
SUMMARY OF CAPITAL EXPENDITURES FOR THE WORLD AND US
The analysis includes two scenarios: 1) 50% RE by 2050, and 2) 100% RE by 2050.
The CAPEX values exclude a great many items related to transforming the world economy to a low-carbon mode. See next section.
50% RE by 2050
World CAPEX for RE were $2,652.2 billion for 2010-2019, 10 years
World CAPEX for RE were $282.2 billion in 2019.
World CAPEX for RE would be $24,781 billion for 2019 – 2050, 32 years; compound growth 5.76%/y
US CAPEX for RE were $494.5 billion for 2010 – 2019, 10 years.
US CAPEX for RE were $59 billion in 2019.
US CAPEX for RE would be $7,233 billion for 2019 – 2050, 32 years; compound growth 8.81%/y
100% RE by 2050
World CAPEX for RE were $2,652.2 billion for 2010-2019, 10 years
World CAPEX for RE were $282.2 billion in 2019.
World CAPEX for RE would be $60,987 billion for 2019 – 2050, 32 years; compound growth 10.08%/y
US CAPEX for RE were $494.5 billion for 2010 – 2019, 10 years.
US CAPEX for RE were $59 billion in 2019.
US CAPEX for RE would be $16,988 billion for 2019 – 2050, 32 years; compound growth 13.42%/y
SUMMARY OF “BIG-PICTURE” CAPEX FOR THE WORLD AND THE US
World More-Inclusive CAPEX
The above CAPEX numbers relate to having 50% RE, or 100% RE, in the primary energy mix by 2050, which represents a very narrow area of “fighting climate change”. See Appendix for definitions of source, primary and upstream energy.
This report, prepared by two financial services organizations, estimates the world more-inclusive CAPEX at $100 trillion to $150 trillion, over the next 30 years, about $3 trillion to $5 trillion per year
https://www.investmentexecutive.com/news/research-and-markets/funding-the-fight-against-global-warming/
NOTE: The Intergovernmental Panel on Climate Change has estimated that an average of $3.5 trillion per year will be needed just in energy investments between 2016 and 2050 to achieve the 1.5-degree target.
https://www.reuters.com/business/environment/us-must-halve-emissions-galvanize-global-climate-action-un-chief-2021-04-19/
Ayn Rand was a better read before the left made her works how-to manuals.
Yes, the financial risks from the Climate Taliban and Big Green are pretty substantial. But, instead of waving the white flag and rolling over, how about fighting them?
I’m sure they will “manage carbon risk” as well as they have managed COVID risk. Lockdowns for every one forever; that ought to do it.😡
Sigh. If I were going for a graduate degree in accounting, they’d probably like it if I did my thesis or dissertation on accounting for climate change and sexism.
“Even a nation with as much sunlight as Australia cannot afford to assemble the materials required to hit net zero,”
Well we can certainly give it a go if the climate changers get right behind strip mining the sea bed for them-
Is deep-sea mining a cure for the climate crisis or a curse? (msn.com)
Just need the Green light for all those Green jobs
Net Zero by 2050 should be easily achievable for Australia. Lock the country down and decide who gets to move where and when the State decides. Simply follow the Aussie police state lock down model used against the Chinese COVID virus.
The dry run is being tested now….
Until the magic appears. What an excellent turn of phrase, Mr. Worrall.
Hang on so the Guardian says that Frydenberg said that he said back in May that …
I know the Guardian are fully capable of lying and rewriting what was said. So can we have a direction quotation of what Frydenberg ACTUALLY said on on budget night back in May ?
The only bit the Grauniad actually puts in quotes is “I take this issue very seriously”. That could mean anything , which is probably why he said it.
Check that picture. It must be part of the natural order that central authoritarian bureaucrats look like idiots.