Investors, prepare: Australia will abandon its emissions targets

Overview

The mainstream media’s coverage of “climate and energy policy” (the Albanese government has yoked the latter to the former) is grossly unbalanced. Whether it’s The Australian or Guardian Australia, reports are slanted overwhelmingly towards governments’ aspirations (“emissions targets”) for the future. Accordingly, they almost completely ignore past, present and plausible future reality – that is, the actions of energy producers and consumers.

In particular, journalists, investors and others rarely ask – and never investigate – crucial questions such as: “how realistic, in light of past and present levels and trends of carbon dioxide and other emissions, as well as future demographic and other developments, are governments’ targets?”

This article, which extends and elaborates “Net Zero” Isn’t a Megatrend – It’s a Mega-trap (8 April), addresses this omission. In particular, I establish three crucial points. First, Australia’s electricity transition is fading and its energy transition is at best glacial and mostly fiction. According to the 2024 edition of the Statistical Review of World Energy, released on 20 June, hydrocarbons – coal, gas and oil – comprised 85% of Australia’s total consumption of energy in 2023. 

As The Australian’s “Energy Nation” liftout (19 June) conceded: “Australia’s energy transition is widely considered to be ailing” (see also “Coal power on comeback trail as wind, solar falter,” The Australian Financial Review, 5 July). Consequently, the Albanese government will fail to reach its 2030 emissions target.

Secondly, these targets are utterly pointless. Here and around the world, “net zero” by 2050 isn’t just fanciful; it’s delusional. Moreover, during the next few years the cost of Australia’s senseless 2030 target, which has already become oppressive, will rise dramatically; not surprisingly, the Liberal-National Coalition has disavowed it.

Thirdly, I show that if the federal government accepts reality and thus rejects the Climate Council’s mooted target (65-75% reduction of emissions from the 2005 level by 2035), it will thereby tacitly abandon “net zero” by 2050 – and the basis of the ALP’s “climate policy,” namely the 2015 Paris Agreement.

An Emerging Mainstream

Conclusions such as mine are no longer iconoclastic. Quite the contrary: they’re becoming conventional. According to Adam Creighton (“Net-Zero Target Is Pure Fantasy,” The Australian, 9 June 2022), the efforts “put into … (energy transitions and) emissions targets are a waste; they are simply not going to be met.” In “Europe’s electoral earthquake sounds warning for Greens” (The Australian, 27 June 2024), he added that it’s “increasingly evident that an electricity grid powered mainly by solar and wind power is a costly pipedream.” Indeed, says Creighton,

“A ‘greenlash’ is coming, as voters throughout the developed world realise how duped they’ve been by years of unscientific, uneconomic nonsense spouted by much of the media and so-called ‘experts.’”

In “Mission Impossible” (The Weekend Australian, 4-5 February 2023) Greg Sheridan concluded: “net zero hasn’t got a snowflake’s chance in hell. It’s a fraudulent concept ... It requires an heroic leap of faith (and) magical thinking ... The world is not going to decarbonise on anything like the scale Western policy makers now claim ... Yet (the energy transition is) at the centre of Australian national policy” (see also “A price to pay for climate fantasy,” The Weekend Australian, 15-16 June). As a result, and as The Australian (6 March) editorialised: “few credible experts now expect the Albanese government has any prospect of meeting its legislated target of 82% renewable (sic) energy by 2050.”

It’s not just sceptics. On 15-16 June The Weekend Australian reported: “Australia’s most powerful group of solar and wind farm developers (says) Albanese will fail to hit his target of 82% renewables by 2030, as slow planning and onerous environmental approvals are stymieing efforts to build enough green energy this decade.”

“On any independent analysis,” concluded Jennie George, the former ACTU president and ALP MP in The Australian on 1 July, “Labor’s 2030 (intermittent power and CO₂ emissions) targets won’t be met.”

Duelling over Targets

“Every Prime Minister since John Howard,” I observed in Investors beware: “Cheap” renewable are very expensive (14 June 2022), “has eventually been forced to choose between ‘saving the planet’ on the one hand and crucifying businesses and households on the other. Anthony Albanese will be no different. The new PM will examine opinion polls, ascertain his electoral self-interest and – damn his solemn promises at the (last) election – act accordingly. He will end the ‘climate wars’ by surrendering to reality.”

Two years later, Albanese hasn’t – yet – budged. Peter Dutton and the Liberal-National Coalition, on the other hand, have begun to repudiate fantasy and grope their way towards some semblance of reality.

On 8-9 June, The Weekend Australian reported that “Dutton will go to the next election opposing Labor’s 43% emissions reduction target by 2030.” It quoted him: “(there’s) no sense in signing up to targets you don’t have any prospect of achieving.” Either he or his political opponents are wrong: on 11 June, The Australian reported (and, in an interview on 25 June, Bowen repeated) that Albanese and Bowen insist that the government “is on track to reduce emissions by an ‘ambitious’ 43% by the end of the decade.”

Further, on 14 June The Australian reported that “Peter Dutton has opened up a new front in the climate wars by rejecting a possible 2035 emissions target of 65-75% ... The Opposition Leader ... demanded (that) the government release emissions modelling to understand the impact of a 65-75% target in a decade’s time. The Climate Change Authority, which is advising ... Chris Bowen on his 2035 target, said in April (that) a target in the range of 65-75% below 2005 levels ‘would be ambitious, (but) could be achievable if additional actions are taken by governments, business, investors and households.’ Mr Bowen and the Prime Minister are refusing to say whether they’ll adopt such a target.”

OWID’s GHG Emissions Data

In order to assess Australia’s emissions targets, it’s vital to define and quantify Australia’s emissions – and place them into global and historical contexts. According to Hannah Ritchie, et al. (“Greenhouse gas emissions,” OurWorldInData.org, 2020, rev. 2024), “in discussions on climate change” people “tend to focus on carbon dioxide (CO₂) – the most dominant greenhouse gas produced by the burning of fossil fuels, industrial production, and land use change. However, CO₂ is not the only greenhouse gas ... There are a number of others (such as) methane, nitrous oxide, and trace gases such as the group of ‘F-gases’ ...” The remainder of this article refers to these gases collectively as “greenhouse gases” (GHGs).

Global GHG Emissions

OurWorldInData.org has compiled data which measure emissions of GHGs (hereafter, “emissions”) measured in billions of tonnes of “carbon dioxide-equivalents” (CO₂e). OWID’s data use the conversion factors adopted by the 6^th Assessment Report (AR6) of the Intergovernmental Panel on Climate Change. Globally, emissions have risen from an estimated 4.2 billion tonnes of CO₂e in 1850 to 53.9 billion in 2022 (Figure 1). That’s a compound annual growth rate (CAGR) of 1.5%.

Figure 1: Global Emissions of GHGs, Billions of Tonnes of CO₂e, Annual, 1850-2022

“Climate Action” or Other Factors?

Over this 172-year period, emissions have grown exponentially; in other words, a curvilinear (exponential) rather than a linear model best fits these data. Over the past decade, however, growth has slowed (CAGR = 0.41%). Indeed, emissions fell 3.7%, from 53.46 billion tonnes in 2019 to 51.46 billion in 2020. Is this deceleration a consequence of national governments’ actions (via the UN’s Paris Agreement, etc.) to abate and reduce emissions? Or of COVID-19 shutdowns and other factors?

I doubt that the longer-term slowdown and short-term shrinkage of emissions’ rate of growth has had much to do with governments’ actions – at least those that climate zealots demand. Instead, I suspect that – as has been true over the very long term – it’s more a consequence of wars, economic, financial and other crises, and the rising efficiency of energy consumption.

Figure 2: Global Emissions of GHGs, Annual Percentage Changes, 1851-2022

After trending mildly and erratically upwards during the century from the 1860s, since ca. 1960 emissions’ rate of growth has decelerated. On an annualised basis the trend is insignificant (Figure 2); on a ten-year basis, however, it’s weak but evident (Figure 3).

Reductions occurred during (and, presumably, as a result of) the First World War (average of -0.8% per year from 1914 to 1919), Great Depression (-2.5% per year from 1930 to 1933), Second World War (-0.6% per year from 1942 to 1945), Asian Crisis of 1998 (-3.5%), GFC (-0.2% in 2009) and COVID-19 panic (-3.7% in 2020).

Figure 3: Global Emissions of GHGs, Ten-Year CAGRs, 1860-2022

What else might explain the tendency, since ca. 1960, for emissions’ 10-year CAGRs to decelerate? The biggest factor, I reckon, has been the rising efficiency of energy consumption. As a result of technological advances, internal-combustion engines now consume much less fuel per kilometre driven, flown, etc., than they did previously. Similarly, factories require ever smaller quantities of energy in order to produce a given quantity of output, houses and offices require less energy to heat and cool, etc.

It’s trivially easy to demonstrate that any attempt to limit Australia’s emissions is utterly pointless. This country’s emissions, whether expressed as total amounts (Figure 4) or percentages of the world’s total (Figure 5), have always been miniscule. They’ve never comprised more than 1.9% of the world’s total, and presently comprise 1.1% (which is down sharply from 1.8% in 2001).

Figure 4: Global Emissions of GHGs, Billions of Tonnes of CO₂e, by Continent, 1850-2022

On that basis, nobody in Australia can do anything that will affect either global emissions or this country’s (never mind the world’s) climate.

Figure 5: Global Emissions of GHGs, Percentage of Total by Continent, 1850-2022

Figure 4 and Figure 5 also show that the efforts of countries in Europe and North America to reduce their emissions have been and will remain futile. It’s true that since the 1980s Europe’s emissions have decreased. But that’s much more a consequence of the collapse of the Soviet Union and Warsaw Pact than of “climate action.”

In 1990, just before the dissolution of the Soviet Union and Warsaw Pact, Europe’s emissions exceeded 10 billion tonnes of CO₂e. By 2000, they’d fallen to 7.5 billion. That’s a total reduction of ca. 27% and a CAGR of -2.95%. During these years “climate action” was thin on the ground, but throughout former Soviet-bloc nations in Eastern Europe, modern and cleaner energy and other infrastructure replaced older and dirtier facilities.

In the decade to 2010, as demands for “climate action” accelerated, Europe’s emissions rose slightly to 7.7 billion tonnes; and over the past decade – an era of climate hysteria – they’ve decreased to 6.6 billion. That’s a fall of 13% and a CAGR of -1.38%.

Yet that’s considerably less than the rates of shrinkage during the 1990s, and implies that subsequent cuts will be much harder and costlier.

Similarly, over the past 20 years emissions in North America have fallen. That’s almost entirely the consequence of the decrease in the U.S., which in turn has resulted from the “shale gale” and “fracking” revolution. These developments have greatly cheapened the price of “clean” gas and thereby enabled consumers to substitute it for relatively “dirty” coal and oil. Emissions in the U.S. have thus fallen from 7 billion tonnes in 2000 to 6 billion in 2022; that’s a total decrease of 14% and a CAGR of -0.71%.

As a result of these developments – which, it’s worth emphasising, stem mostly from factors other than “climate action” – Europe’s and North America’s shares of global emissions have plunged from ca. 23% (North America) and more than 30% (Europe) in the 1970s to 15% and 12%, respectively, in 2022 (Figure 5).

At the same time, however, in both absolute and relative terms, Asian countries have massively increased their emissions. Indeed, they’ve risen much more than those in Europe and the U.S. have abated; hence the overall increase of global emissions in Figure 1. In 1945, Asia generated 24% of the world’s emissions. Since then that percentage has risen virtually without interruption: it doubled by 2011 and in 2022 exceeded 56%.

Given the huge increase of emissions in Asia, the modest decreases in Europe and North America have availed nothing.

Another factor other than “climate action” has also been crucial. Most of the EU and a few American states are smug about their reductions of emissions (“if we’ve done it, so can you; and if you don’t, we’ll force you”). Yet much of their “cuts” aren’t genuine: they result from the “offshoring” of GHG-emitting industries.

Rather than host the manufacturing which emits these emissions, Australia, the EU, the U.S. now import from Asia the goods they once produced – and congratulate themselves for “saving the planet”!

Figure 6: Global Emissions of GHGs, Percentage of Total by Income, 1850-2022

High-income countries, which during most of the 19^th century and the first quarter of the 20^th century generated more than one-half of the world’s emissions, and as late as the 1980 generated 46%, have “outsourced” much of their emissions-producing manufacturing to lower-middle and particularly to upper-middle income nations (Figure 6). High-income nations’ share of global emissions fell to 29% in 2022, whereas lower-middle income nations’ share increased from 14% in 1980 to 19% in 2022, and upper-middle income nations’ share vaulted from 34% in 1980 to 49% in 2022.

In this key sense, “climate action” in Europe, North America and Australia hasn’t merely been futile: it’s been fraudulent.

But We’ve Got to Set a Good Example!

By this point advocates of “climate action” will have become indignant and perhaps even apoplectic. I’ve heard their mantra countless times: “never mind these or any other data. Wealthy and progressive nations like Australia must set a good example for the rest of the world. If we don’t, then they won’t undertake ‘climate action!’”

Figure 7 plots the emissions of the world’s top-ten emitters. They generated 34.5 billion tonnes of CO₂e – 64% of the global total – in 2022. Their actions clearly matter greatly; those of all other countries including Australia don’t. Which of these top-ten will the EU and the U.S. – never mind Australia – influence? China or Russia? Iran or Saudi Arabia? India or Indonesia? Which of these countries’ populations will demand of governments: “never mind the economic development and eradication of dire poverty which only hydrocarbons – coal, gas and above all oil – can deliver: we demand climate action now!”

Only tenured academics, bureaucrats in sinecures, politicians in safe seats – or their cheer squad in the media – could possibly believe such absurdities.

Figure 7: World’s Top-10 Emitters of GHGs, Billions of Tonnes of CO₂e, 2022

On 1 December 2018, Alan Finkel issued a badly-drafted and illogical press release entitled “Clarifying the Chief Scientist’s position on reducing carbon emissions.” It stated: “on 1 June 2017 I attended a Senate Estimates hearing where Senator Ian Macdonald asked (me) if the world was to reduce its carbon emissions (he surely meant “emissions of carbon dioxide”) by 1.3%, which is approximately Australia’s rate of emissions (did he mean or “the growth rate of Australia’s emissions” or “Australia’s share of global emissions”?), what impact would that make on the changing climate of the world.”

“My response was that the impact would be virtually nothing but I immediately continued by explaining that doing nothing is not a position that we can responsibly take because emissions reductions is a little bit like voting, in that if everyone took the attitude that their vote does not count and no-one voted, we would not have a democracy.”

Hence Finkel’s oversight: he’s apparently unaware of a large, decades-old and peer-reviewed academic literature which concludes, given that a single voter cannot influence the outcome of an election, that abstention – that is, doing nothing – is eminently rational.

Finkel then compounds his ignorance with a glaring error: “similarly, if all countries that have comparable carbon emissions took the position that they shouldn’t take action because their contribution to this global problem is insignificant, then nobody would act and the problem would continue to grow in scale. Let me be clear, we need to continue on the path of reducing Australia’s carbon emissions ...”

Sorry, Alan, that’s either confused or misleading; either way, you fail the test of basic arithmetic. Even if ALL of the countries outside the top-ten emitting nations IMMEDIATELY reduced their emissions by 20% – which, of course, isn’t going to happen – the impact upon global emissions would be relatively minor.

A primary school student can grasp what the chief scientist overlooks (or, more likely, prefers not to disclose). In 2022, the world’s emissions totaled 53.85 billion tonnes. Of that total, the top-ten emitting nations contributed 64%; hence all other nations contributed 36%. The top-ten nations’ emissions thus totaled 53.85 × 0.64 = 34.46 billion tonnes, and all other nations 53.85 × 0.36 = 19.39 billion. If all other nations immediately reduced their emissions by 20% – which would consign many of them to even greater destitution – their total would fall to 19.39 × (1 – 0.20) = 15.51 billion tonnes, and the new global total would be 34.46 + 15.51 = 49.97 billion.

Even under these extreme and utterly unrealistic assumptions, that’s a decrease of total global emissions of just (49.97 – 53.85) ÷ 53.85 = 7.2%. And that’s assuming that the top-10 emitters freeze their emissions.

Although Japan and the U.S. might, the top-ten as a group – or other countries, particularly developing ones – won’t reduce their emissions. Quite the contrary: it’s reasonable to assume (and in “Net Zero” Isn’t a Megatrend – It’s a Mega-trap, 8 April, I showed that the Energy Information Administration of the U.S. Government’s Department of Energy is projecting) that during the next quarter-century they’ll rise rapidly.

It’s easy to see why. According to the UN, in 2050 the world’s three biggest nations, ranked in order of population, will be: India, China and Nigeria. Over the past half-century, and particularly during the most recent quarter-century, China’s share of the world’s emissions has increased five-fold. In contrast, India’s have merely doubled and Nigeria’s haven’t budged (Figure 8).

Figure 8: Emissions of GHGs (2022), Percentage of Global Total, World’s Three Most Populous Nations (2050)

If during the quarter-century to 2050 India and Nigeria develop at anything resembling the pace at which China has developed since the 1980s, then these two countries’ emissions – in absolute terms and as percentages of the world’s total – will rise rapidly. Ditto other populous developing nations such as Brazil and Indonesia. As Reuters reported on 10 November 2022, “African Nations Tell COP27 Fossil Fuels Will Tackle Poverty.”

Demography and economic development in poor countries, in other words, will render irrelevant the “climate policy” of rich countries. So never mind silly former chief scientists: implying that Australia’s actions can influence other countries’ actions is at best naive and at worst delusional. Gullibility and fantasy provide no basis for “sustainable” policy.

Australia’s Past and Present Emissions – and Targets for the Future

From the foregoing analysis, it’s clear that Australia’s emissions targets – like Europe’s and America’s – are futile. Moreover, we’re now in a position to ask what apparently nobody else dares: how achievable, in light of emissions’ past and present levels and trends, both globally and in this country, are Australia’s emissions targets? Are they unachievable as well as pointless?  

Australia’s emissions increased from an estimated 55 million tonnes in 1850 to an all-time maximum of 820 million in 2011 (Figure 9). That’s a CAGR of 1.75%. Since the peak in 2011, however, they’ve mostly fallen; as a result, they’ve decreased to 574 million tonnes in 2022. That’s a total reduction of 30% and a CAGR of -3.25% since 2011.

What’s caused this reduction? Enthusiasts of “climate action” laud the increasing percentage of intermittent energy (and the corresponding decreasing percentage of coal-fired power) in the electricity generation mix; but that hasn’t been the principal factor.

Figure 9: Australia’s Emissions of GHGs, Billions of Tonnes of CO₂e, Actual and Required to Achieve Targets, 1850-2050

According to Judith Sloan (“Dutton sets sail on the rising winds of climate fatigue,” The Australian, 18 June), “much of (the reduction) was achieved early on (that is, before intermittent power’s rise) because of the inclusion of land use, land use change and forestry in the calculation. Since 2020, emissions have been essentially flat.”

What’s caused the reduction of emissions since their peak in 2011? Skullduggery in the form of “land-based carbon removal” has played a role.

As Caitlin Fitzsimmons (“The accounting trick at the heart of the world’s climate goals,” The Age, 17 June) has noted, “governments (around the world) have collectively proposed (which is hardly the same thing as “implemented”) about 1 billion hectares of land for land-based carbon removal as part of their climate mitigation pledges. That is more than the combined areas of South Africa, India, Turkey and the European Union. On paper, we can offset our way to net zero. In the real world, we cannot.”

What’s caused Australia’s reduction of emissions? COVID-19, and federal and state governments’ resultant panics and lockdowns, were also a big factor: emissions fell from 651 million tonnes in 2019 to 567 million in 2020; that’s a decrease of 13%. Since then, however, they’ve risen (to 568 million tonnes in 2021 and 574 million in 2022).

What of the future? According to the Department of Climate Change, Energy, the Environment and Water, on 16 June 2022 the Australian Government “lodged an updated Nationally Determined Contribution (NDC) with the United Nations Framework Convention on Climate Change (UNFCCC) secretariat. This is part of Australia’s obligations under the Paris Agreement.” The updated NDC:

• “commits Australia to a more ambitious 2030 target. We will reduce greenhouse gas emissions by 43% below 2005 levels by 2030, which is a 15 percentage point increase on Australia’s previous 2030 target;
• reaffirms Australia’s commitment to net zero emissions by 2050 ...”

In 2005, Australia’s emissions totalled ca. 650 million tonnes. Its 2030 target is thus 650 × (1.0 – 0.43) = 370.5 million tonnes. Given the reduction since 2011, this target merely entails a continuation, more or less, of the trend since 2011. Simple, right?

Australia’s Fading Electricity Transition

It’s perilous to assume that the trend since 2011 will persist. According to the Clean Energy Council’s website, since 2021 the number of completed solar and wind projects – that is, those which are producing power and have been connected to the grid – has utterly collapsed (Figure 10). 

It’s reasonable to expect that this decrease will continue this year. According to research which UBS released in June, “renewable penetration has softened in 2024 thus far, with the gap in generation filled by higher coal-fired generation utilisation. The pipeline of committed and anticipated renewable projects has stalled ... We forecast insufficient replacement of (coal) with renewables.”

Further, and according to the historical large-scale renewable energy supply dataset compiled by the Clean Energy Regulator, the quantity of hydro, solar and wind capacity added annually to the grid from new and existing projects to Australia’s electricity grid has halved from 4,090 megawatts (MW) in 2019 to 1,797 in 2023 (see Figure 11; CER’s latest data, updated on 11 April, extend to 31 December of last year). More generally, Figure 11 indicates that since 2001 ca. 32,000 MW of “renewable” capacity has been added to the grid. Of that total, hydro-electric power comprised 7,551 MW (23.6% of the total), solar 12,027 MW (37.6%) and wind 12,425 MW (38.8%).

Figure 10: Number of Solar and Wind Energy Projects Completed per Year

Virtually all (96.7%) of hydro’s total entered the grid in 2001 – and dwarfed solar’s and wind’s subsequent annual contributions, which were minor and erratic in 2005-2017 and since 2020 have been significant but falling rapidly.

Figure 11: Large-Scale Renewable Capacity (MW) Added to Australia’s Grid, 2001-2023

According to documentation and data released by the Australian Energy Market Operator on 25 June, in order to meet this country’s commitment to “net zero” by 2050 approximately 6,000 MW of renewable capacity must be added to the grid each year. As Figure 11 shows, actual outcomes fall woefully – and as time passes, cumulatively ever further – short of this aspiration.

To meet the government’s 2030 intermittent power target, AEMO estimates in its Draft 2024 Integrated System Plan that 57,000 MW of new solar and wind capacity – more than double the 24,452 MW that’s been added since 2001 – will be required. That’s almost 10,400 MW per year for 5.5 years: a rate that’s 50% greater than anything ever achieved by renewable power, 2.5 times anything ever achieved by solar and wind, and more than five times the rate achieved in 2023.

The Australian (“Lights out: Green power falling short,” 26 June) summarises the implications: “if Australia is unable to (install enough solar and wind capacity) to replace coal, it will either have to extend the use of (coal-fired power, as have state governments in NSW and Victoria) or the risk of blackouts and price (spikes) will grow.”

Elsewhere I’ve emphasised (see in particular Figure 4 in “’Global Energy Transition’ – Fact or Fiction?” 6 February 2023) a point that’s so basic that virtually all “experts” ignore or overlook it: all electricity is energy, but not all energy is electricity. Globally and in high-income nations such as Australia, electricity comprises a minority – presently no more than 17.5%-22.5% – of total energy consumed. Even if the power sector completely decarbonises, which is highly unlikely, what about the other 77.5-82.5%?

Figure 10 and Figure 11 demonstrate that the “decarbonisation” of Australia’s electricity sector has certainly decelerated and perhaps even ground to a halt. From what source(s), then, will further reductions of this country’s emissions derive?

Judith Sloan agrees: “it’s unlikely to come from renewable energy ... investment has fallen well below the annual (amount) required (to meet the 2030 target) rate,” and “it is very optimistic to think it can be turned around quickly. Talk of flouting normal approval processes, compulsorily acquiring land and deliberately despoiling local environments will only lead to more fierce resistance from (residents in rural and regional areas) – and fair enough.”

From what source will further reductions of emissions – if they occur – derive? I suspect that the “offshoring” of even more manufacturing will occur.

Sloan concurs, and outlines an ironic – for an ALP government – likelihood: “it is entirely possible (that as a result of sky-high and rising power prices) some of our big emitters – aluminium smelters and alumina refineries, in particular – could be forced out of business, with the loss of thousands of well-paid unionised jobs ... But the demand for aluminium will still be there so the (closed plants in Australia will be replaced by others) elsewhere in the world.”

“In other words, ... our emissions target ... involves the loss of thousands of manufacturing jobs ... The trade unions should be on to this, but many of their leaders have caught the green disease.”

Australian Politicians Must Eventually Confess Four Hard Truths

Nobody in America or Europe – never mind Australia – can do anything that will affect global emissions or the world’s climate. Not least because they’re unaffordable, Australia’s targets for 2030 and 2050 are unachievable. They’re also pointless: this country’s “climate policy” punishes Australians but doesn’t benefit the planet. This crucial point applies to any country and all countries collectively (see in particular Bjorn Lomborg, “‘Net Zero’ Fails the Cost-Benefit Test,” The Wall Street Journal, 29 November 2023).

Hence Peter Dutton’s decision to oppose Labor’s 2030 and possible 2035 targets. What’s next? Reality will eventually oblige politicians to confess four crucial truths:

1. As Figure 9 indicates, if Albanese and Bowen endorse even deeper reductions (i.e., of 65%-75% of the 2005 level by 2035), they merely recommit the country to a path very close to “net zero” by 2050. If, however, they bow to reality and decline to accept the 2035 target, they concede that “net zero” – the holy grail of the ALP’s policy – is unattainable.
2. Dutton, too, must admit that, by opposing the 2035 target, he also acknowledges that net zero by 2050 – which the Coalition supports – is well beyond reach.
3. As I demonstrated in “Net Zero” Isn’t a Megatrend – It’s a Mega-trap (8 April): even if “non-emitting” (solar, wind and nuclear) sources generated 100% of Australia’s electricity starting at midnight tonight, this country still wouldn’t come anywhere near “net zero” by 2050.
4. Neither intermittent (as the ALP asserts) nor nuclear (as the Coalition claims) power provides a “path to net zero.” Exhibit #1 is France, which for decades has generated a large majority of its power from “non-emitting” sources yet remains a hydrocarbon-fuelled economy. Realistically, no “path to net zero” exists.

“Green Austerity” for Decades to Come?

Figure 12 hammers the final nail into emissions targets’ coffin. It shows the 10-year CAGRs of Australia’s emissions since 1860 – as well as the CAGRs required to reach its 2030, mooted 2035 and 2050 commitments. 

Each successive commitment doesn’t merely cover a longer period; it becomes progressively more difficult – and immensely more costly.

The 2030 target requires a CAGR that doubles from -2% today to -4% in 2030; the mooted 2035 target presupposes one that quadruples from -2% today to -8% in 2032 and remains there to 2035; and the commitment to “net zero” by 2050 assumes that the CAGR quintuple from -2% today to -10% in 2032 – and remains there for 18 years!

Figure 12: Australia’s Emissions of GHGs, 10-Year CAGRs, Actual and Required to Hit Targets, 1860-2050

Recall that in “Net Zero” Isn’t a Megatrend – It’s a Mega-trap” I analysed the implications of Net Zero Australia’s estimate that the total cost to Australia of “net zero” by 2060 will be ca. $9 trillion.

That’s more than $250 billion per year for the next 35 years; per capita; it’s also ca. $10,000 per Australian per year for the next generation. By comparison, today’s cost of living crisis is a picnic in the park!

Given Australia’s annualised GDP (ca. $2.2 trillion, according to the latest (March) estimate of the Australian Bureau of Statistics), “net zero” will thus demand annual expenditure of 10% or more of GDP for three decades.

Only twice have Australia, Britain, Canada and the U.S. devoted higher shares of their GDP to a common objective – victory in the First and Second World Wars. Each of these colossal efforts required less than six years. Today, can any of these countries – for that matter, can any country – credibly contemplate comparable and decades-long commitments?

“In reality,” reckons Vaclav Smil (Halfway Between Kyoto and 2050, Fraser Institute, February 2024), “the real burden would be far higher for two reasons. First, it cannot be expected that low-income countries could sustain such a diversion of their limited resources ... hence this global endeavour cannot succeed unless the world’s high-income nations annually spend sums equal to 15 to 20% of their GDP.”

Secondly, and as Snowy II (whose estimates total cost has skyrocketed from the original ca. $2 billion to more than $10 billion) and other boondoggles are amply demonstrating, any energy transformation would, says Smil, “face enormous cost overruns. As the world’s most comprehensive study of cost overruns ... shows, 91.5% of projects worth more than $1 billion have run over the initial estimate, with the mean overrun being 62%” (see Bent Flyvbjerg and Dan Gardner, How Big Things Get Done: The Surprising Factors That Determine the Fate of Every Project, from Home Renovations to Space Exploration and Everything in Between, Crown Currency, 2023).

If so, Net Zero Australia’s estimate becomes $9 trillion × 1.62 = $14.58 trillion, or $410 billion per year for 35.5 years; per capita, that’s ca. $16,200 per Australian – almost $65,000 for a family of four – per year for almost 40 years! It simply won’t happen: long before then, in opinion polls and at the ballot box, voters will reject “green austerity.” They’ll force politicians to renounce their emissions targets and the policies that deliver massive pain but no gain.

Eventually the public will acknowledge the truth: globally and in Australia, there’s been no – and will be no – “transition to net zero.” Moreover, this country’s “energy transition” has been grossly distorted: electricity, which constitutes just 20% of total energy consumed and is thus a relative sideshow, has to a significant extent transitioned from hydrocarbons (65% of power generated in 2023) to intermittent sources (29%). 

However, the power transition is fading and an overall energy transition – the “main game” involving 100% of energy – is mostly fiction. At best, it’s proceeding glacially and from a very low base: last year, solar and wind power supplied no more than 13% of Australia’s total energy.

A political transition towards reality has therefore commenced. By rejecting the 2030 and mooted 2035 targets, Peter Dutton has fired the starter’s gun and taken the first steps; perhaps the ALP will take the next major one (towards the end of this year or in the first few months of 2025) by declining to endorse the proposed 2035 target.

Symbolically, by far the biggest step will be the repudiation, perhaps de facto rather than de jure, of the 2015 Paris Agreement and thus “net zero” by 2050.

Donald Trump’s victory in November, which looks even more likely after Joe Biden’s catastrophic display on 28 June, will provide a major impetus: not long after he takes office in January, he’ll rescind Biden’s Executive Orders relating to the Paris Agreement (see also Trump Will Likely Win – but Won’t Make America Great Again, 25 June).

Economic and electoral necessity will oblige Albanese and Bowen (or, if they lose the next election, their successors) to accept reality and follow Dutton and Trump.

Implications

In The 9 most important things I have learned about investing in over 40 years (25 June), Shane Oliver writes: “cycles show up in investment markets with reactions magnified by bouts of investor irrationality that take them well away from fundamentally justified levels. This flows from a range of behavioural biases investors suffer from and so is rooted in investor psychology.”

It follows, Oliver adds, “that what the investor crowd is doing is often not good for you to do too. We often feel safest when investing in an asset when neighbours and friends are doing the same and media commentary is reinforcing the message that it’s the right thing to do.”

Oliver sagely concludes: “this ‘safety in numbers’ approach is often doomed to failure. Whether it’s investors piling into Japanese shares at the end of the 1980s, Asian shares in the mid-1990s, IT stocks in 1999, U.S. housing and credit in the mid-2000s.”

I’d add “climate change,” “decarbonisation” and “net zero” to that list. As I showed in “Net Zero” Isn’t a Megatrend – It’s a Mega-trap (8 April), despite the massive hype over the past 15 years “clean energy” stocks have been almost continuous – and cumulatively massive – losers (see also Why value investors should doubt “climate science,” 5 September 2023).

The “investor crowd” and “safety in numbers” brigade includes the boss of one of the nation’s largest superannuation funds. According to The Australian (“Returns at risk from climate delay: HESTA,” 3 June), she “says ... super returns (will be) under threat if the climate transition fails to accelerate.” It quoted her: “we support strong action on climate change ... because we believe that’s the way to deliver the best long-term returns for our members.”

She’s kidding herself – and thereby risking her members’ returns. Australia’s and especially the world’s emissions are rising rather than falling, its power transition is fading, its energy transition is largely fiction, net zero is delusional fantasy – and politicians’ transition to reality has begun.

In short, this country’s “climate transition” is unlikely to accelerate. Insufficient “climate action” doesn’t threaten HESTA’s returns: HESTA’s “climate malinvestments” do.

In “Energy Security ‘More Vital than Low Carbon’” (The Australian Financial Review, 26 May 2022), Meg O’Neill, Woodside Energy’s CEO, astutely discerned the public’s underlying sentiment: consumers “want energy that is reliable, affordable and (emits less carbon dioxide). But if it’s not reliable and affordable, lower carbon goes out the window” (see also “Energy policy based on wishful thinking, says Woodside chief,” The Australian, 22 May 2024).

The implications are as obvious as they are momentous: once the public recognises that “climate action” is a much bigger threat to well-being than “climate change” – which it’s begun to do – the popularity of intermittent sources of energy (namely solar and wind) will tumble, and that of reliable sources will recover (coal and gas) and rise (nuclear).

Over the past decade, however, unreliable energy has metastasised into a large, powerful and voracious vested interest – a “climate-industrial complex” (see, for example, “’Wind farm fraud’ a sign of trust deficit in renewables industry,” The Australian, 5 July). Governments subsidise it lavishly, and it can’t survive without steadily rising and cumulatively vast handouts. Yet politicians ignore the public – and particularly its hip pocket – at their peril.

The 2015 Paris Agreement, which the Albanese government regards as sacred, aspires to “reduce the risks and impacts of climate change” by eliminating greenhouse gas emissions in the latter half of this century. At its centre lie the commitments (“targets”) of governments such as Australia’s to “transition” to non-emitting energy systems and “net zero” economies.

“After nearly a decade,” writes Steven Koonin (“The ‘Climate Crisis’ Fades Out,” The Wall Street Journal, 10 June), “it’s timely to ask how this transition is progressing and how it might fare in the future.”

Koonin is a theoretical physicist who earned a Ph.D. from the Massachusetts Institute of Technology, for nearly 30 years taught at the California Institute of Technology (where he quite literally wrote the book on computational physics), and from 2009 to 2011 was Under Secretary for Science, Department of Energy, in the administration of Barack Obama. He’s also the author of the superb book Unsettled: What Climate Science Tells Us, What It Doesn’t, and Why It Matters (BenBella, 2021).

On 10 June Koonin wrote: “the global emissions reductions envisioned in Paris are now a fantasy. Emissions grew to an all-time high in 2023, with consumption of coal, oil and natural gas each near record levels, driven in large part by the energy needs of the developing world. Despite global renewable-energy investment of almost $12 trillion in the nine years ending in 2023, hydrocarbons continue to provide about 80% of the world’s energy. The latest United Nations emissions report projects that emissions in 2030 will be almost twice as high as a level compatible with the Paris aspiration.” Australia, in other words, won’t be alone: the world as a whole will miss its 2030 target.

“The challenges in reducing emissions,” Koonin continues, “have long been evident to the few who cared to understand demographics, economics and energy technologies ... More people have come to appreciate those factors, (and) ... ambitious goals (are colliding) with techno-economic realities ... Simultaneously, the scientific rationale for the transition is weakening as expectations of future warming are moderating.”

“... The energy transition’s purported climate benefits are distant, vague and uncertain while the costs and disruption of rapid decarbonization are immediate and substantial. The world has many more urgent needs, including the provision of reliable and affordable energy to all. It’s therefore likely that ... as ‘climate fatigue’ sets in, ‘climate action’ fades into the background, and public attention shifts to different (perceived threats) ...”

Koonin sagely concludes: “we should welcome, not bemoan, the energy transition’s passage through the issue-attention cycle. It means that today’s ineffective, inefficient, and ill-considered climate-mitigation strategies will be abandoned, making room for a more thoughtful and informed approach to responsibly providing for the world’s energy needs.”

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