Australia looks to the future as Russia fights for the past
Today the world is focused on shattering the mad vision of a little man bent on destroying Russia’s future in a desperate bid to resurrect its czarist past. But the world should also turn its attention to the fast-moving energy and political developments in Australia. These events may be the first steps in reshaping Australia into the world’s first climate superpower. More importantly, they may play a pivotal role in permanently shifting the global energy equation away from fossil fuels.
The stakes cannot be higher given the unprecedented aggression seen by Russia in Ukraine. It has created a new oil and gas shock that is speeding up the shift to renewable energy as a way to gain energy independence and security as well as control costs.
Will Scotty from marketing please report to HR?
Right now, Australia is everything Russia is not. While Vladimir Putin hangs on to power by any means possible, invading countries and poisoning political opponents, Australian voters were exercising their right to exit Prime Minister Scott Morrison to another in a peaceful transfer of power that took a day.
Economically, Russia is doubling down on its dependence on mineral and energy extraction. Australia is finally beginning to see a need to move away from fossil fuels.
Australia’s fading love affair with fossil fuels
In the past month, Australia has taken a dramatic shift away from Morrison’s conservative, anti-climate pro-coal policies.
Voters surprised the world and presented a political mandate that has not escaped the envious attention of U.S. President Joe Biden: the chance to champion a safe climate future.
Key to the victory of the middle-of-the-road Labor Party was an unambiguous rejection by voters of Morrison’s recalcitrant climate ways. Faced with an unexpected pro-climate insurgency, Morrison and his party sought help from Rupert Murdoch’s aggressive anti-climate media empire. They invented and fuelled a fake “climate war” narrative that sought to falsely dichotomize climate action and future economic prosperity.
“Together we can end the climate wars. Together we can take advantage of the opportunity for Australia to be a renewable energy superpower.”
So entrenched was this political narrative that the new Labor Prime Minister Anthony Albanese, who had campaigned only lightly on climate, was as stunned by his victory as his shell-shocked conservative opponents. He quickly got with the program and sued for climate peace. “Together we can end the climate wars. Together we can take advantage of the opportunity for Australia to be a renewable energy superpower,” he said in a victory speech.
Luckily for Albanese, known as “Albo” in Australia, some of Australia’s best and brightest had worked for years to engineer a peaceful climate revolution. They included dozens of “Teal,” primarily women, independent candidates and members of the nation’s Greens Party who did what Australia’s main political parties had been afraid to do: push climate to the top of the electoral agenda. Unfortunately one of his first acts was to cut the staff of said independents, whose support he will need to pass get anything done. It’s a bizarre and unnecessary slap in the face not only to independents who don’t have the support of a party to help them navigate legislation on every issue that comes up, but to the tens of thousands of voters, many of them women, who backed these independents and will now be questioning support for the new Labor government. Albo what are you thinking?
During the election savvy institutional investors like the 930,000 mostly women members of HESTA, the Australian industry superannuation fund of health and community service workers put their weight behind climate action. Even the conservative Business Council of Australia, who backed a proposed climate change bill by one of the early successful Teals before the election. The new Albo government will need their ongoing backing. He’ll need to understand that and act on it to be successful.
Australia’s activist billionaire class
Australia also has new and relatively unusual climate advocates: Maverick billionaires who appreciate the massive economic opportunities of addressing climate change. Included among them is industrialist billionaire Andrew “Twiggy” Forrest, who recently journeyed from a career of extraction to promote a carbon-free, green hydrogen future.
And, in perhaps the biggest surprise, project management software billionaire Mike Cannon-Brookes became the world’s first climate corporate raider with his brilliantly executed shareholder assault on Australia’s largest carbon emitter, AGL Energy. He now adds coal transition kingpin to his growing portfolio of causes and business opportunities.
Now, with victory in hand, the reality – rapidly navigating the complicated transition away from fossil fuels that have powered much of Australia’s growth for decades – is sinking in.
Languishing in the climate doghouse
The good news is that Australia went from pursuing climate denial policies to being the world’s latest climate champion in less than a month. This shift comes after years of deliberate climate inaction had placed Australia near the bottom of OECD states in their response to climate change.
Australia faces a daunting effort to replace 16 coal power plants and sunset 100 coal mines that employ tens of thousands of workers.
Within days of taking power, Albo jumped back into the global climate game with a pledge to almost double Australia’s commitment to cut carbon emissions to 43% by 2030. The government also said it would spend AU$20 billion (US$13.9 billion) to add 26 gigawatts of renewable energy capacity – more than 82% of the country’s national electricity needs.
But, as we all now know, pledging is easier than doing. Australia faces a daunting effort to replace 16 coal power plants and sunset 100 coal mines that employ tens of thousands of workers. Albo must also reform a Byzantine power grid.
Last week, the country’s public-private marketplace descended into chaos after a collapse in generation rendered the spot market impossible to operate reliably. Power costs forced Australian Energy Market Operator to suspend the country’s wholesale power market to protect consumers from surging prices.
It’s a bold lesson in government intervention that perhaps the American state of Texas should study.
Onward climate soldiers
Despite what will be a very rocky mandate, the future bodes well for Albo, Australia and the global climate if the nation can pull off a swift transition if he is smart and works with instead of against the country’s newly elected independents and Greens. This week it’s not clear if Albo has the sense to do that as he announced he will cut the staff of independents.
The key to Australia’s success is shifting every dollar, every subsidy and every government rule to make the rapid transition to safe, clean, convenient and reliable non-fossil fuel energy easier. And no other continent in the world is as prepared to achieve this as sunny and windy Australia.
That is 75% greater than the country’s combined reserves of coal, gas, oil and uranium – it’s enough to power the world for ten years.
Australia has unlimited amounts of renewable energy, much of which is close to its biggest cities. It has the potential to generate more than 5000 exajoules (EJ) of solar and wind energy alone. So much, it’s hard to imagine. One exajoule equals one quintillion joules. That is 75% greater than the country’s combined reserves of coal, gas, oil and uranium – it’s enough to power the world for ten years.
Australia also has vast reserves of minerals critical to developing solar panels, electric vehicles, batteries and is already a significant exporter of green commodities — such as green steel.
And with efforts like Forrest’s green hydrogen or Cannon-Brooke’s massive Sun Cable solar venture, Australia has the opportunity to become the world’s largest exporter of green energy. Cannon-Brookes has big plans to ship renewable solar and wind-generated via cable to Singapore, while Forrest wants to send green hydrogen to energy-starved Korea, China and Japan.
“Australia should aim for 500% renewables,” Cannon-Brookes said recently. “We’re one of the sunniest, windiest countries in the world.”
A crucial moment for global energy
Australia’s new commitment to accelerating the carbon transition comes at a crucial moment for global energy policy. Australia’s unexpected fossil fuel reversal and Europe’s rush to decouple its energy needs from Russia may be enough to permanently break the global addiction to fossil fuels.
And not a minute too late. This week Putin sought to drive a wedge among Western Allies by falsely blaming economic woes on anyone but himself. One thing is clear: it will be democracies, not kleptocratic dictators, that will win the day and hopefully tackle climate change.
