Abbott’s “suicide strategy” on coal

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ScreenHunter_4437 Oct. 03 10.13

By Leith van Onselen

A lead advisor on climate policy to German Chancellor Angela Merkel has slammed Australia’s complacency on climate change and labeled the Abbott Government’s championing of the coal industry as an economic “suicide strategy”. From The Age:

Hans Joachim Schellnhuber said most countries had given up on Australia setting tougher targets to reduce greenhouse gas emissions and the country was now viewed alongside Canada as not contributing its fair share to global efforts to reduce climate change…

Professor Schellnhuber was dismissive of the Abbott government’s direct action policy…, describing it as “weak” and he criticised a “ridiculous” energy green paper published the day before the UN summit that advocated greater coal use in decades to come.

He said calling for continued coal use was not only poor climate policy, it made little sense economically when the rest of the world was turning to renewable energy…

Professor Schellnhuber said instead of backing away from policies such as Australia’s renewable energy target, the Abbott government should be exploiting Australia’s enviable position as the country with the “biggest potential” to produce renewable energy.

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The Government’s opposition to renewable energy flies in the face of the global effort to reduce emissions, and risks opening Australia up to possible punitive international counter-policy down the road. It also raises the prospect that Australia could be locked-out of emerging markets, which are increasingly looking for greener sources of energy. China is already approaching peak coal use, whereas India appears to be headed in the same direction, and is on the brink of securing a $US1 billion energy deal with the US. From PVTech:

…the two countries will soon announce a US$1 billion loan facility between the ExIm Bank and the Indian Renewable Energy Development Agency (IREDA) for clean energy projects…

Prime Minister Narendra Modi is currently in the States and had dinner with President Obama on Monday night with further talks scheduled for Tuesday. A joint vision statement released after the dinner hinted that cooperation would also include ongoing nuclear energy work.

Whether you personally are a believer in climate change or not is irrelevant. What matters is that the world is attempting to move towards a lower carbon future, and by failing to follow suit, the Abbott Government has positioned Australia as an intransigent outlier.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.