Essay by Eric Worrall
There was a time when bankers would have been embarrassed to publish a graph as absurdly unrealistic as the product at the top of this page.
Climate Change Risk in the Financial System
Jonathan Kearns[*]
Head of Domestic MarketsCredit Law Conference ‘Managing Financial Services Risks in an Age of Uncertainty’
Sydney – 24 August 2022Introduction
Climate change is a significant issue with broad-ranging implications for the economy, the financial system and society more broadly. Average temperatures in Australia have risen 1.4 degrees since 1910, and climate scientists tell us that with current policies average temperatures will rise around 2.7 degrees above pre-industrial levels by 2100.[1] The frequency of extreme weather events has increased, with more days having excessive rainfall and high fire danger (Graph 1).[2] We have seen how climate change is already affecting people’s lives in Australia and around the world, and it will keep doing so. The climate will continue to warm, with associated changes in the overall climate system over the next 20–30 years, largely irrespective of our emissions trajectory.[3] But our actions over coming years will obviously affect the ongoing path of climate change.
…
Transition risk will almost certainly involve changes to the structure of the economy. An important aspect of transition risk is its strong international dimension. It is not only changes in domestic policy, preferences and technology that are relevant for the Australian economy – given the importance of international trade of goods, services and capital, global changes are also significant. For example, policy decisions or preference changes in other countries regarding their use of coal will affect Australia’s coal exports, which is a scenario the Bank has considered for its impact on the economy (Graph 2).[4]
…
Read more: https://www.rba.gov.au/speeches/2022/sp-so-2022-08-24.html
The RBA speech transcript contains a similar graph for overall greenhouse gas emissions (graph 5).
Back in the real world, Europe is restarting coal plants, while claiming its all temporary, Japan just started a new coal plant, China is building coal as fast as they can, and even deep green Australia is paying capacity subsidies to coal to prevent operators from closing their plants.
I do expect a steep imminent downturn in coal and gas exports, along with all other economic activity. Europe and Britain are about to experience a deep recession, thanks to the energy policy lunacy of their politicians, the Chinese economy is in free fall, with bank runs and a collapsing real estate Ponzi scheme engulfing at least a third of their economy, New Zealand has embraced green purity to such an extent they seem to be banning all forms of economic activity, and the USA is run by people who don’t understand economics or business.
If everyone copied New Zealand’s climate policies, global economic activity could fall off a cliff and return to medieval levels for a sustained period. But New Zealand seems to be a special case. Even Europe hasn’t embraced New Zealand levels of climate purity, they are as busy restarting coal plants as almost everyone else.
When the global economy bounces back from the coming recession, I think we can safely predict it is not going to be powered by solar panels, regardless of what public statements the world’s governments have made about their energy policy intentions.
“Australia is paying capacity subsidies to coal to prevent operators from closing their plants.”
Australia is not doing that. Someone has a draft plan. But the beneficiary would probably be gas, not coal. It would pay for the capacity to deliver power at short notice.
Are you seriously suggesting the Aussie government won’t be paying for coal to stay open? The choices are an unrestricted floating electricity price, coal subsidies or prolonged blackouts. There is no other option, and won’t be for years even if you believe the battery fairy will deliver.
If coal is economic, consumers will pay for it to stay open. It isn’t a fledgling industry – there is no case for a subsidy. But what I’m saying is that gas, not coal, provides the sort of capacity that these plans have in mind.
You’re probably right about the government favouring gas for OCGT, but logically a capacity market should be technology-agnostic.
The US largely moved to CCGT and OCGT because of low gas prices, but that isn’t the current situation.
Steam turbines don’t care what the heat source is, but it does take time to provide the fuel source and to convert to the new combustion method. A minimum of 2 years comes to mind from an old friend who worked for Babcock converting smaller facilities from coal to gas (or vice versa depending on which gave the lowest running costs)
“There is no case for a subsidy “
Coal provides 75% of Australia’s electricity.
If no coal whether it’s economic or not, Australia is f***ed.
It’s not just simple supply/demand. Countries should make long term strategic decisions for the good of the country.
This may include paying higher for a given product ( subsidies).
Sadly, Australia is not really thinking long term strategy. Politicians are thinking about promoting vote winning unicorns
Cut the subsidies on wind and solar. Stop all “carbon payments”.
Coal is still by far the cheapest and best option for reliable electricity supply to the NEM.
The point that Nick makes is that coal is good and if the old plant breaks down then the company will fix it.
Gas is proposed as backup for renewables, when the sun doesn’t shine and wind doesn’t blow.
The government asked the market to fund them, but they all turned their backs, so the ScoMo government underwrote it.
‘Snowy Hydro is proposing to develop a gas-fired power station at the former Hydro Aluminium smelter site at Kurri Kurri in the NSW Hunter region. Large coal-fired power stations are retiring as Australia transitions to intermittent, renewable energy sources like wind and solar power.’ (Snowy Hydro)
Correction: Coal-fired power stations are retiring as politicians interfere in electric generation technology selections, subsidize unreliable generation and wreck power markets such that coal-fired generation cannot earn a return. The general economy and ratepayers and taxpayers will pay for that folly one way or another. Ain’t socialism grand?
Oh, I almost forgot: FJB!
Its a complete mess, madness of the highest order, CO2 doesn’t cause global warming. At some point the politicians will come to their senses and everyone will laugh.
I notice that you are completely ignoring all the things government does to make coal more expensive.
Texas showed otherwise. If the system is set up in a way that does not recognise the benefit of having available capacity – which is how Texas was set up – then available capacity withers. That was a big factor in Texas’ collapse in Feb 2021. Consumers can’t pay for things that the politicians/planners/managers/operators refuse to supply.
Agree.
Any “all in” analysis of the Texas system demonstrates that the least discounted cost solution is continued renewables build out with gas backup. This is because the Texas natural gas to electric infrastructure already has most of this “available capacity” in favorable conditions. Texas should finish the job by mandating that that natural gas to electric infrastructure gird up for P0.000? conditions, and then by allowing them to be handsomely compensated for doing so. I.e., no more faith based begs to the players. 2 studies, following the losses of over a hundred souls and 12 figures of USD found just this.
Oh, nearly forgot. They also need rational connection to the rest of us…
Eric Worrall,
Just curious, from N America.
What exactly do you mean by “coal subsidies” down under?
We have our own energy dystopia, as you know.
Capacity subsidies were offered back in June, after the AEMO suspended the electricity market during a wind drought / capacity crisis and coal plant operators threatened a permanent shutdown.
https://wattsupwiththat.com/2022/06/20/climate-activist-aussie-pm-caves-offers-capacity-subsidies-to-coal-and-gas/
Ya pays me now or you pays me later. And it will be a hell of a lot more expensive later. Politicians will be scrambling to blame greedy capitalists when the blackouts start. They are already doing that with the FF price increases.
Australia either develops coal, fracs or learns Mandarin. Nukes would be included except for the Australian’s head-up-the-ass politics.
Reliable and affordable energy is the basis of all society, economics and national security. Read Vaclav Smil’s “How The World Really Works.” Asia, Africa and the rest of the world are not going to wait on the West’s folly.
You could be right if only Australians would develop gas resources that are rather closer to their centres of demand. While the Gippsland basin runs down, and NW Shelf LNG dominates gas is going to look very expensive compared with coal next door to a power station. I still suspect the coal would be cheaper, but gas will be needed for balancing renewables until someone works out that they aren’t worth replacing.
Gas is mobile. We thought Bass Strait gas was so well placed, not far from a big centre of demand. But now it gets piped to Sydney, then on to Moomba in the SA outback, then across Qld to Gladstone, and then shipped to China – another centre of demand.
There will soon be replays of that ’60s comedy movie “It’s A Mad Mad World”.
Only this time, the real story offers nothing to laugh about 🥴
The film takes place mostly in Southern California. An ad-hoc crew of erstwhile gold-diggers are scheming against each other to be the first to find $350,000 buried years earlier by a bank robber, Smiler Grogan, under “a big W” in a park in Santa Rosita. Sixty years later, if they were alive today, they’d all be scheming for Green New Deal tax credits. A lot more money for a lot less work.
Jonathan Kearns ought to settle down and read the skeptic’s literature regarding all the doom he writes about.
His head is filled with the mush of the “Climate Cult”.
Starting with bad information is a poor base to build a serious discussion.
The graph is not wrong. Australian politicians are in denial of the the UK European energy crisis.
The cut in coal exports is political, nothing to do with demand.
And nothing Australia does will have the slightest effect on the future global climate whatever drives it.
A truism that Australian climate alarmist types have no choice but to accept, which leads to the obvious conclusion that all this energy destruction has absolutely NOTHING to do with climate and everything to do with ending capitalism.
Yes, 1.3 per cent of global human activity sources emissions from Australia.
The inaccuracy of the graph is in the constant downward slope. There will probably be a short drop but politicians will succumb to the will of their cold and hungry constituents or be swept aside by masses of desperate people with nothing to lose.
Unfortunately there will be massive pain and misery for following the green loony path.
Peter, I assume you meant the graph of the Leftists’ political projection of governments’ killing coal-fired energy.
I tend to think Jacinda Ardern will end up like the former government of Sri Lanka, seeking asylum somewhere off island.
Lets hope so she and here green party mates are destroying NZ
Consumer confidence going quickly down the dunny…
AS a concerned Kiwi I cannot believe that any government would try to destroy their countries economic base in a vain quest to please the UN as is happening in NZ.
New Zealand rely s on agricultural exports to buy everything that is manufactured in other countries that we cannot make economically our selves.
Ardern and her green cohorts are trying to reduce our exports in the name of Carbon Zero .
New Zealand will be the first country in the world to tax its farmers for enteric methane emissions and nitrous oxide.They are calling it a levy but it is a tax and will cost farmers.
New Zealand exports food to the world to feed 30 million people but we are lumbered with the so called emissions .
The so called emissions on exported food should be debited to the country where the food is consumed .
Exactly the same as coal exported from Australia.
We know that global warming is a scam when those in charge introduce these crazy rules .
They seem to be hell bent on restricting farming even though New Zealand,s exports of meat and dairy products have the lowest carbon foot print of any produce even after shipping to the other side of the world .
A lot of dairy farms close to our towns have been changed to housing and industrial estates BUT this government will not allow new dairy farms or even allow dairy farmers to graze and milk off land that is not currently in dairying .
Maybe Solomon Islands with a CCP bodyguard squad?
Eric,
To put Graph 2 into perspective economically, it is anticipated that coal exports will earn Australia more than A$100 billion in calendar 2022.
If Graph 2 is correct that figure will reduce to some A$20 billion annually as a result of the adoption of Net Zero 2050.
We are not going to replace the A$100 billion with imaginary “new, well paid green jobs” no matter how much people wish it were so.
We are expected to believe that Australia can transition to Net Zero 2050 at no cost and with enormous benefits.
The reverse is true.
It will be attempted at enormous cost for no benefits.
“We are expected to believe that Australia can transition to Net Zero 2050 at no cost”
The graph is of exports. The decline represents other people transitioning to Net Zero. They won’t hold back to save our export income.
Oh, of course Red China, India, etc. aren’t going to bail you out of your own idiocy. They’ll simply shrug and continue ramping up the mining of their own deposits.
Be of good cheer, though! Without exports to pay for all of those solar panels, turbines, and battery metals, you’ll reach Net Zero a LOT sooner than planned. Net Zero Economy, that is – and a population about 20 million less.
writing observer said [They’ll simply shrug and continue ramping up the mining of their own deposits.]
David Archibald points out that China is finding that as their coal mines deepen and age – constantly screwing out increasing tonnage runs into obstacles.
Further to Peak Coal for the Chicoms 26Nov22
https://wentworthreport.com/further-to-peak-coal-for-the-chicoms/
Remember China burns +4Billion tons coal a year – eye watering number.
If David Archibald is correct then the Lucky Country will benefit from coal exports – contra to the RBA warnings.
I remember in Autumn/mid 2020 the RBA was saying house prices would crash. In fact they rose right thru 2020 and into last year.
China and India are by far the main markets for Australian coking and thermal coal (2022).
Both are most unlikely to adopt ‘net-zero’ policies in the foreseeable future.
I can hear the Indian & Chinese business owners now –
“Net zero? Another stupid white round-eyes idea.”
No significant industrial country will ever even get close to Nut Zero. It is a Leftist, anti-free market political fantasy.
Obviously. Because they will no longer be a significant industrial country. There will only be the serfs in the fields, and the nobility in their mansions.
Somewhat ironically, balsa composite wind turbine blades, recovered from damaged or demolished turbines at end-of-life, burn quite nicely in coal plants and cement kilns. Silica cinder is added to the concrete mix. All without an honest accounting for carbon expenditures, of course.
RBA, CFR, APRA, ASIC etc.
We are doomed, not by climate change™ but by the imposition of cc policies and the inexorable growth of the regulatory state.
Why is Coal at $400 per ton?
Because for whatever reason China economy can’t make coal to sell at lower price
than $400 per ton.
And there is certainly no way for China to import enough coal from somewhere that can
sell coal cheaper than $400 per ton. Or 80% of coal China buys has to be in or near China.
And some countries can import all there coal from other countries, mainly because they are
using a relatively small amount of coal. But no country could import 2 billion tons of coal per year.
It would make a lot more sense to leave the coal in the country exporting that much coal,
and burn it for energy in that country. Transporting coal long distance does not much sense,
but transporting a very huge amount is insanity.
It would be less insane if importing a huge amount of oil or natural gas.
There are many reasons. If entire world was a driven by coal economy, it also would be
slightly less insane to import 2 billion tons of coal- but that was more than 100 years ago.
But there many reasons other than that.
Importing a large amount of coal is demonstrably sane. Coal is by far the easiest and cheapest fuel to stockpile. And stockpiles are exactly what are needed to prepare for emergencies.
So what country has the largest stockpile of coal.
I know US has stockpile of crude oil:
https://www.energy.gov/ceser/strategic-petroleum-reserve-9
And I believe some other countries also have petroleum stored
for future use.
But never heard of one for coal.
It would be easy to do, just shut down an open pit coal mine.
I looked it up:
“BEIJING (Reuters) – China will release more than 10 million tonnes of coal from state reserves to ensure steady supply to the market, the state planner said in a statement on Thursday.”
It had vowed to build coal stockpiles to more than 120 million tonnes in government-deployable reserves in 2021.
The nation now has about 40 million tonnes of coal in its reserve bases.
https://www.reuters.com/article/us-china-coal/china-to-release-more-than-10-million-tonnes-of-coal-from-reserves-idUSKBN2EL12O
So China burns 4000 million tonnes per year / 365 = 10.958 million tons per day. So stockpile of 4 days. And wants 12 days.
But 12 days is large piles of coal.
Coal density is 700 to 1100 kg/m3. Say have 1100 kg
A cubic km is 1 billion cubic meter so less than that.
1 square km at 25 meters high is 1/40th: 25,000,000 x 1.1 =
27,500,000 tonnes of coal
Have less than less than 2 square km with average height of about 82 feet high, and want 6 square km of it stored [rather high- 8 stories high] and more if density is 700.
This another problem with solar panels and wind mills, they take up so much area. Of course since they are Communist they could make big piles stack all over the place which citizens could haul away if they needed it.
Since cargo ship can carry about 1/5th of million tons, 40 million tons reserve is equal to 200 cargo ships or more- which might be off shore waiting to unload and/or that many transporting every year.
China gets about 300 million tons shipped. If 200 cargo ship have turn around of 1 per month: 12 time 40 million tons is 480 million tons. But if waiting a lot, they can not do a turn around of 1 month even if they aren’t traveling very far. And fast loading and unloading is also factor.
Ie: “Its total gross volume is around 219, 980 m3 and it is loaded using a ship-loader at the rate of 13,500 tonnes per hour.”
https://www.marineinsight.com/types-of-ships/biggest-bulk-carriers/
{that’s iron ore- about 4 denser than coal- and powder, also easier.}
I was wondering about the amount of coal terminals China has.
And got a map for the world:
https://www.gem.wiki/Coal_terminals
So just zoom in and count:
25
How many does India have [while we are here}?
34
Australia: 8
Europe: 18
Canada: 6
USA: 19
And “southeast Asia”: 31
New Zealand has couple, South America has several has does
Africa
I imagine China has bigger ones and is largest importer
of coal in the world. So number doesn’t say much but
the amount traffic from all exports and imports within small region
is important. And it seems ocean terminal could bigger than terminals on rivers. And China seems have most of them on ocean, which good to handle traffic, but means probably, lots train traffic. Or if insane, lots of truck traffic.
Since interested in insanity, I wondered how much trucks transport Coal. {if short distance it not much of issue,…}
Green trucks to be used for coal transportationLuo Wangshu and Yuan Hui
Updated: Nov 29,2021 07:19 China Daily
“Heavy trucks running on new energy will gradually replace diesel-fueled ones in the transportation of coal for power generation in Baotou, Inner Mongolia autonomous region, to help reduce carbon emissions in the city.
On Nov 18, a technology company that operates and coordinates the city’s road transportation ordered 370 new energy heavy trucks, mainly to transport coal for nine power plants in Baotou.
The new trucks will reduce costs and carbon emissions, said Liang Jun, deputy general manager of China Huaneng Group’s Baotou power plant.”
It is probably is a short distance haul, but still… gosh.
And:
“China’s major coal-producing Shanxi province has pushed for a shift from trucks to rail for coal transportation in a bid to reduce vehicle tailpipe emissions.
Designated railway lines should be built to connect all major coal mines in the province this year, according to a document released recently by the Shanxi ecology and environment bureau.
Rail shipping within the province should account for more than 80pc of coal and coke transportation this year, while the two commodities should only be railed when leaving the province. This would mean a rapid shift given that coal rail haulage currently accounts for only 40-50pc of overall coal transportation within the province, and about 80pc of coal is shipped out of the province by rail, an official at a major Shanxi-based coal producer told”
Well that a good plan. It’s Published date: 16 June 2020
A little late, though.
Powder? I would think it would be taconite.
“Taconite is a low-grade iron ore.
When the high-grade natural iron ore was plentiful, taconite was considered a waste rock and not used. But as the supply of high-grade natural ore decreased, industry began to view taconite as a resource.’
I have only seen high grade and shipping low grade across ocean, would seem like it’s a long haul to carry garbage.
But then again, if a customer wants paid for it, then ship it.
Google:
How much is taconite worth?
Lehtinen said the cost to produce traditional taconite is $60 to $80 per ton in Minnesota, with transportation to China about the same cost.
https://www.grandforksherald.com/business/taconite-industry-strikes-while-iron-ore-price-is-hot
So. if China needs it.
You are confusing cost and price. Almost all the coal in production today was at least break-even at $50/tonne. At $400/tonne it would pay to open up a lot more production, at least if you could be confident that the price would stay high. For now the coal price is reflecting what is worthwhile for substituting for gas, given all the regulatory constraints and taxes and the shipping costs.
Well I am not trying to arrive at China cost. All I know is China has always paid
a high price for coal- is always more US price/cost. The cheapest cost for coal
has generating electrical power at coal mining site, and for US that is around $22
per ton. And China also generates electrical near some of their coal mining operation, and transmission lines over 1000 km. Or moves the electrical power rather than moves the coal. I always wondered why China buys coal at high price
but recently their paying a very high price:
https://tradingeconomics.com/commodity/coal
One thing is that US rail transport is very cheap, and China is about twice the price per mile per ton.
When looking at the price of coal, you have to know what it is being used for. Anthracite (the highest grade) is used for metal smelting – and is typically five times the cost of lignite (the lowest grade) – which is really only good for steam generation for either electricity or direct heating.
Red China doesn’t have much in the way of anthracite deposits (that they admit have been discovered, anyway). They do have a lot of lesser quality coal – but import a major part of their anthracite.
–Newcastle Coal is thermal coal exported (delivered FOB) out of the port of Newcastle in New South Wales, Australia. It is the price benchmark for seaborne thermal coal in the Asia-Pacific region. Newcastle coal futures are traded at the ICE Europe under ticker symbol NCF.–
–What is meant by thermal coal?
Steam coal (sometimes called thermal coal) is a grade of coal used in electric power plants to generate steam to create electricity.–
Yes China does mine lower grade of coal as it does higher quality steam coal. China mostly is using thermal coal- something like 70% of electrical power is from burning coal. China is reportly blacking out and limiting electrical use. They have enough power plants but they are having problems getting enough coal and part of problem is the high cost of coal and the price they required to sell electical power at.
Or quite simply the high price of steam coal is a problem.
And Newcastle Coal at $400 per ton is a indicator of this problem.
US sells steam coal at much lower cost. US has always sold coal at low cost. US has over 100 years of coal. And low cost US natural gas, lowering the US coal use.
China has lots of natural gas, is it mining some of it, and importing a lot natural gas. Otherwise, it seems to me about 80% of electrical power would be coming from thermal coal or they have reduced their coal use for electrical power, and would say mostly due to importing natural gas.
China has peaked at using about 4 billion tons of coal per year and most is thermal coal.
I tend think that people don’t really understand what peak coal or peak anything, actually means.
Yeah right …
https://www.abbotpointoperations.com.au/the-operation/
https://www.marinetraffic.com/en/ais/home/shipid:5781641/zoom:11
Two bulk carriers at Abbott Point yesterday. Pacific Sarah berthed today.
Sifnos and Aquavita Sun are approaching. All bulk carriers.No information on cargo, but trust me – none of these are picking up bananas or molasses.
Mark Carney , the former Governor of The Bank of England, was also a true believer.
Average temperatures in Australia have risen 1.4 degrees since 1910, and climate scientists tell us that with current policies average temperatures will rise around 2.7 degrees above pre-industrial levels by 2100.
That’s some slippery verbage there. 1.4 degrees since 1910. The year 1910 is Not pre-industrial, so the “measured” rise to date is already higher than 1.4 degrees since the amorphous “pre-industrial” date. Let’s add another 1 degree to the 1.4 to get a value of 2.4 deg. So this bozo wants to destroy the world’s energy production systems for a 0.3 degree temperature rise by 2100?
Madness…
And that’s only urban temperatures. Rural temperatures haven’t risen at all.
No point then in BoM placing too many weather stations in rural areas is there.
And the real crazy thing about NZ is that they are importing coal after effectively closing down the industry. Virtue signalling by Arden to get a cosy UN job.
Yes, I think you’re right…she would just love that.
As a Kiwi I can’t think of a better place for her…we don’t want her here…she’s already done enough damage!
There is not enough coal in China, Mongolia or Indonesia to make all the stuff needed to support Net Zero in the west.
Australia and USA will need to contribute a good portion of their significant resources of coal to build all the stuff needed to achieve Net Zero. You cannot spend trillions of dollars without it requiring massive amounts of resources even if it is all just graft buying Mercedes Benz behemoths for the subsidy farmers.
The problem is there is only one shot at this because none of the Net Zero stuff is able to be replicated from its own energy. Once the coal runs out, so does all the solar panels and wind turbines that depend on to for their manufacture.
If Europe makes it through winter without mass casualties then it will be a bit longer before reality prevails, but prevail it must.
Eric,
What exactly is wrong with the graph? You state that you are expect a steep decline in the use of coal due to the “energy policy lunacy” of various politicans. This is apparently the exact same thing that the reserve bank is modelling. If your economy depends on digging stuff out of the ground and selling it overseas then surely it makes sense to model what would happen if people no longer what to buy what you are selling. The talk is about risks and a huge risk for Australia is if countries make good on their promises to get to net zero.
The problem, the graph is a political fantasy.
If renewables were capable of replacing fossil fuel, Germany wouldn’t be sweating so much about the coming winter, and recommissioning their coal plants. In addition there simply isn’t enough gas being produced to replace all the coal being burned.
Barring an unexpected energy breakthrough such as ocean bed clathrate mining or cheap nuclear fusion, coal exports will be rising for decades to come.
Eric,
there are two lines on the graph. One showing coal exports increase and one showing exports decreasing. Which reflects the fact that the future is uncertain
and Australia’s exports depends on the politics in other countries and there is little that Australia can do about that. Surely it makes sense for the Reserve bank to consider such risks as well as the optimisic scenario shown on the graph.
The Net Zero curve is a fantasy. The only enabling technology that could achieve that is nuclear. And I do not mean the electric power version. It is only possible by wiping out most of the world population.
A solar panel takes 80+ years to give back the energy it requires to get it producing electricity. Wind turbines take longer. So there is an unimaginable amount of coal required up front to create this fantasy world.
People producing such a graph have no inkling how things are manufactured. They are uneducated in the basics of modern life.
Australia has spent a large fortune already on weather dependent generators and their guaranteed output remains zero. If the grid required guarantees on output then they would never be connected. They are useless as on-demand energy sources and have degraded the grid.
Yes. Its also not just that it cannot be done. Its also that no-one who matters is even trying to do it, or has any intention of trying to do it. It is indeed pure fantasy.
Rick,
even assuming that Net Zero curve is a fantasy that doesn’t mean that people won’t try and achieve it and the first step is not building and new coal fired power stations. Which means that the demand for coal is likely to decrease. Plus of course fracking means that natural gas is significantly cheaper, more efficient and cleaner than coal.
Which do you think is more likely? In 30 years time coal exports from Australia will increase or decrease?
They’ll increase because all manufacturing will then be located in China and India, both are NOT on the NUT ZERO train wreck.
I agree that some people will continue to try and find some way to make Net Zero work.
I also recognize that as the pain associated with Net Zero increases, the politicians who continue to push this nonsense will be voted out of office, resulting in fewer politicians trying to push unworkable solutions for a problem that doesn’t exist, onto the rest of us.
Rick, I’m curious about your statements about energy return for solar and wind. Do you have references for this? I ponder this a lot, kind of worked through the numbers a couple times for solar. It’s complex and beyond my feeble attempts, but I get this bad feeling from my results that there is no real return. But >80 years?
Randy
While I agree that the future is uncertain, on the other hand the makers of the graph are declaring that there is no doubt that coal use will continue to plummet.
Only someone who is blind enough to believe that wind and solar will eventually work, would believe that this scenario is even remotely possible.
Germany did not plan for Russian action to cut its gas supply as part of its renewables transition… Germany is suffering from problems with its remaining fossil fuel capacity, not from any part of its renewable strategy.
There are now no new coal plants being built in either American continent or the whole of Europe… only Indonesia, India and china are still building new plant in any numbers. India is trying to move away from coal imports.
Against that background coal exports must decline.
While massively increasing them…
Let me correct that: ‘India says it is trying to move away from coal imports’.
“Germany did not plan for Russian action to cut its gas supply as part of its renewables transition”
You can say that again!
I believe a number of WUWT posters did however predict it because it was that obvious.
There are a lot more people in India and China than there are in Western Europe or North America.
“Continuing to accelerate its production pace during the ongoing fiscal year, Coal India Limited (CIL) ended April-June quarter FY’23 capping a historic thigh of 29% output growth, compared to same quarter FY’22.”
Coal India.
… they’ll ease up soon I’m sure.
The question is: which countries and which promises?
The export markets for Australian coal have made no promises, have no plans or intentions to reduce their CO2 emissions, and, on all the evidence available, their political classes simply do not believe in any global warming crisis or emergency.
Have you forgotten that China boycotted COP26?
There’s no risk at all of countries making good their zero commitments unless they go full nuclear, and RBA are useless at forecasting anything. Just overeducated and overpaid public servants with no background in real world economy.
So, Izaak, is it reasonable for the Australian government to enact policies now in the anticipation that the rest of the world will achieve Nut Zero? When no significant country in the world is on-track to meet Nut Zero targets? Your faith in Leftist government ideological posturing is heartwarming.
“Aussie Reserve Bank Predicts a Crash in Coal Exports”
The RBA has issed a number of rep[orts that tint it as deep, woke green.
An alternative headline might be
Aussie Reserve Bank Pushed for a Crash in Coal Exports”
A month ago I wrote to the Governor, suggesting they do due diligence on global warming claims.
No reply, then sent a memory jogger, no reply.
I thought that the cancel culture was for pimply adolescents.
Geoff S
Geoff, you expect a reply when the Leftist government has no plans for due diligence? It would explode their ideological decisionmaking.
The RBA have a very bad record when it comes to predicting. That’s why Australia is in a pickle with inflation at the moment. The RBA with all their highly paid actuaries, held back interest rate rises until it was to late. They were warned years ago by economists that it was time to increase interest rates to mitigate inflation. I would take their coal price predictions with a grain of salt.
Then you’d just have salty bullshit.
Bullshit is best taken au natural.
That is – rejected completely.
I predicted aliens would land in Washington DC and demand to see the President. From outer space, not from Mexico.
Anyone can make a prediction.
They are rarely right.
I think you could argue the case that aliens have already landed in Washington…
A close encounter with Nancy Pelosi?
Eeeuuuwwww!
Earth politicians are easy.
JF
I keep remembering that one Dr. Who episode…
And then a Policeman would lead the space aliens to the White House, where they would not believe Jumpin’ Joe Biden was the leader, and then they would never come back to this “primitive” planet again.
Climate change has been done to death.
Ad absurdum.
Thermal coal will be the first type of coal to reduce globally as it easily can be replaced by gas, which also has a direct environmental benefit. Reducing metalurgical coal is more diffucult as it is a vital component in steel making. For Australia is mostly depends on what Japan and China decide.
Graphic source: https://www.rba.gov.au/publications/bulletin/2019/sep/the-changing-global-market-for-australian-coal.html
Hans, I think that with the most recent wakeup call, a country would avoid placing itself at the mercy of one energy source. Australia’s need to subsidize both FFs and ruinables, at the least, should be a cautionary tale. Governments have zero ability to effectively plan because of political interference of one kind or another.
Your graph stops at 2018 try an updated graph
“The frequency of extreme weather events has increased, with more days having excessive rainfall …”
No It’s not. Available evidence suggests extreme daily rainfall frequency and total mm volume has been in decline since the 1970s.
See http://www.waclimate.net/rainfall-insurance/index.html
“New Zealand has embraced green purity to such an extent they seem to be banning all forms of economic activity,”
I am fond of New Zealand lamb but don’t buy it at $45+ for a leg of. Economic pigeons their probably will expire before making it home to roost. Is Jacinda Ardern (PM) still wearing her big smile? Do the dumbest crop of leaders the world has ever had not see where this is headed?
In Canada, I’ve also noted “organic” produce and salmon and other pricey fish and products ‘one can do without when budgets tighten’ being reduced for sale. I notice there is not much news these days coming out of Sri Lanka, the world’s first feasibility study on how the NWO will work.
The WEF counselled head-cases of state seem bent on forging ahead, essentially because they dont know what else to do(UK and EU are panicking as calmly as they can and keeping stiff upper lips).
Germany, I think finally gets it. They are distributing 40 tanks to major population centres’ police forces to be used on their own people who are developing wrongful thoughts under propaganda from ‘the right’ and from going hungry and cold.
https://wattsupwiththat.com/2022/08/19/green-energy-nightmare-german-politician-labels-poor-people-enemies-of-the-state/
Obviously rebellion in Germany represents a bigger threat than Russia’s ‘invasion of Europe’.
So, the German government’s decades long attack on inexpensive, reliable energy is now a right-wing conspiracy theory? That citizens marching against the government that is giving them the upcoming misery will be “enemies of the state” according to that selfsame government?
I guess I should have made it clear that this was the thinking of the German govt, not my thinking.
Sorry, Gary. I should have been clearer that it was the German government to which I was referring.
A big tell here: there is a flood of bankers rapping about the terrible risks from climate change. This is a coordinated effort to push the story of Stuart Kirk of HSBC’s talk to the WEF in which he showed unequivocally that the risk to investment by climate change is insignificant.
to push out of sight
Yeah, it would be nice to edit later but would probably get misused. I knew what you meant though.
The only risk from climate change is from the regulatory nonsense that is being pushed on us, using climate change as an excuse.
“I do expect a steep imminent downturn in coal and gas exports”. I think not. Yes there is likely to be a global recession, but countries around the world are already returning to coal. Gas is a less global market, but those who can (eg. Liz Truss’s UK) will also use more gas. Wind and solar are very likely to collapse, while coal and gas pull the world out of recession. For that, the western world must stop getting sucked in by Russian-sponsored green lunacy, but I hope that necessity will achieve that. Then, for goodness sake, let’s all pile into nuclear before we start running out of gas. I think coal can last a lot longer than gas, but having another string to the bow is a good idea anyway.
I was informed a few years ago that senior banker executive pool life is extremely woke now and common sense not common.
New Zealand coal imports in 2021 increased +29% above the record-setting year of 2020 (despite lockdowns). So even in the Ardern Fantasyland coal consumption is booming!
Someone is smoking rope if they believe that they can build dependable, reliable, battery backed up Wind/Solar of sufficient enough capacity to reduce the use of coal as shown in the time line in the lead graph. IMPOSSIBLE. Worse, they must be completely ignoring what is happening in Europe.