Politicians will sell out the planet to the dirtiest bidders

From The Guardian

To understand this moment, we have to recognise that there is an existential struggle on both sides. While environmental scientists and activists fight for the very survival of the habitable planet, the fossil fuel, meat and internal combustion industries are fighting for their economic survival. Either they are regulated out of existence or human society across much of the world will fail. We cannot all win: either these industries survive or we do. But we can all lose, because, eventually, they will go down with the rest of us.

But “eventually” counts for nothing in their spreadsheets and annual reports. “Eventually” has no effect on share prices and dividends. “Eventually” has little traction in a four- or five-year political cycle. So, as the evidence of climate breakdown becomes undeniable to all but the most deluded, the pollutocrats must fight as never before. There was once a widespread belief (which some of us cautioned against) that governments would step up when – and only when – disaster struck. But it is precisely because disaster has struck, visibly and undeniably, that they are stepping down.


To buy himself a few more months of political survival, Rishi Sunak, representing a party that has recently taken £3.5m from major polluters and climate deniers, is threatening the welfare of the human species. He has switched, over the past fortnight, from doing a grand total of nothing to prevent climate chaos to actively sabotaging both the climate programmes he inherited and the efforts of other public bodies.

How can you tell when a politician is doing the work of the oil and gas companies? When they start promoting carbon capture and storage (CCS). CCS has been the magic fix for climate breakdown promised by successive UK governments for 20 years – and never delivered. Most of the very few projects brought to fruition around the world have been abject failures.

The sole purpose of CCS is to justify the granting of more oil and gas licences, on the grounds that one day someone might be able to capture and bury the CO2 they produce. It’s no coincidence that Sunak announced both policies – more licences and CCS – in the same statement. It would be wrong to say the technology doesn’t work. It works precisely as intended, even if it never materialises: it is a highly successful method of buying more time for the fossil fuel industry.

But the worst thing Sunak has done is something few people have noticed. Underpinning the UK’s climate programme, weak and contradictory as it has always been, was the carbon market. The promise of successive governments, in and out of the EU, was that, by putting a price on carbon pollution, they would ensure that industries had no option but to switch to greener technologies. A further promise by the Conservatives was that, after Brexit, there would be no decline in environmental standards. But Sunak’s government has quietly been flooding the UK market with pollution permits, triggering a collapse in the price of carbon. While the carbon price in the EU emissions trading scheme stands at €88 (£75) a tonne, in the UK it has fallen to £47.

In the US, Donald Trump’s team plans to go much further. A programme devised for him by fossil fuel-funded junktanks intends to rip down just about every effective law and agency protecting the living world. If he gets in again, it seems as if he doesn’t intend to leave.

Sunak, Trump and others know what they are doing. They cannot be unaware of the heat domes and fires, the sea surface temperature anomalies and the shocking news from Antarctica. Their economic and security advisers must have briefed them about the likely civilisational risks presented by the closing of the human climate niche. In response, they double down on their support for the forces causing this destruction.

People seem mystified by this apparent perversity. But it’s a clear manifestation of the pollution paradox, which I see as essential to understanding modern politics. The most damaging companies have the greatest incentive to invest money in politics (by making donations to political parties, funding lobbyists and junktanks, hiring troll farms and microtargeters and all the other overt or covert techniques). So politics, in our money-driven system, comes to be dominated by the most damaging companies.

Sunak, Trump and many others like them are not just desperate politicians who will try anything to retain or regain power (though they are that). Nor are they simply representatives of capital. They are representatives of the dirtiest, most destructive varieties of capital, the varieties engaged in a war against humanity. In the conflict between the two existential crises, they know which side they’re on.

‘More oil and gas licences are justified on the grounds that one day someone might be able to capture and bury the CO2 they produce.’ Photograph: Bloomberg/Getty Images

Colonisation is good....according to the Right

 From a Xit by Mike Carlton

Colonisation was “the luckiest thing that happened to this country...” John Winston Howard OM AC.

[Howard is a former "Liberal" (so called) Party PM of Australia]

Dashes to take the credit ....

 Scott Morrison is Australia's current PM.  There's an election in 4 weeks, which I'm hoping will turf him out.  Useless man, all baff and bombast.  Penny Wong is a take-no-prisoners frontbencher with the opposition Labor Party, the ALP.  And she is so right.

How press attitudes to climate change have shifted

 From a Twitter thread by Josh Gabbatiss, of Carbon Brief

I'm pleased to reveal a new @CarbonBrief  project that's been months in the making.

Using our database of 1364 UK newspaper editorials we have analysed how press attitudes to climate & energy have changed in a decade. The results may surprise you.

For years we have tracked how newspapers talk about climate change, renewables etc in their editorials – which serve as the "voice" of a publication. 

In doing this, we got the sense that a shift was underway...

Newspapers that had spent years dismissing “doom-laden” warnings and mocking green “zealots" were seemingly accepting the reality of climate change.

The Daily Express welcomed a “green Britain revolution”. The Sun called the UK “a world leader in the green movement”.

We teamed up with PhD researcher @sylviahayes98  to understand what was going on.

She helped us assess the language in 100s of editorials concerning climate change, renewables, fracking & nuclear. 

The results show a surge in editorials calling for climate action after 2018.

Editorials explicitly opposing climate action have been relatively rare, but concentrated in a handful of right-leaning publications - Mail, Sun, Express etc.

They are also the publications with by far the most readers - e.g. the Sun/Mail have 10x the readership of the Guardian.

However, a significant shift has occurred in recent years among these right-leaning titles. 

Bolstered by a Conservative net-zero pledge and COP26, they have gone from publishing editorials that mainly oppose climate action to - for the most part - embracing such action.

A similar trend can be seen for renewables. 

This chart shows that among all newspapers, editorials have gone from largely opposing wind turbines (dismissing them as expensive, ineffective and ugly) to supporting Boris Johnson’s vow to make the UK “the Saudi Arabia of wind”.

One of the most notable shifts is the complete disappearance of UK newspaper editorials questioning the existence of climate change, or the science behind it.

The last appearance of such explicitly sceptical sentiments appeared in a Daily Telegraph editorial 3 years ago.

A good news story then? Well, kind of. 

Besides looking at the broad positive/negative framing of each editorial, we analysed the more subtle language being used - including the ways in which newspapers are blocking progress while saying they support climate action.

While it's no longer as acceptable to deny climate science outright, instead editorials criticise the activists delivering the message or describe the UK's burden as unfair, asking why China isn't doing more. 

But most of all they complain about the high costs of climate action.

Concerns about cost are particularly relevant amid the current energy crisis and pushback against the UK net-zero target (although the cutoff point for this analysis was 2021).

The messaging also aligns with what some have dubbed "discourses of delay".

Australia's denialist government

The right-wing LNP  coalition government which is in office at the federal level in Australia is denialist and delayist, but pretends to be taking action on climate change.  It maintains Australia has cut emissions more than any other country, and plans to cut them more than any other country.  The truth is very different.

Rooftop solar to meet 3/4 of demand by 2026

Rooftop solar, Australia

 From IEEFA

Rooftop solar systems are going to have such an impact in coming years that they will meet up to 77 per cent of total grid demand on occasions within five years, sending minimum operating [i.e., net] demand down to levels that had never been contemplated until recently.

The Australian Energy Market Operator says the pace of rooftop solar is increasing beyond its own expectations and homes and businesses will likely add at least another 8.9GW by 2025, on top of the existing capacity of 14GW.

This will have a major impact on prices, demand and the operations of the grid. These solar systems alone could supply up to 77% of total electricity demand at times by 2026 in the four mainland states that are part of the National Electricity Market (South Australia, Victoria, NSW and Queensland).

“As a result, minimum operational demand across the NEM mainland is expected to drop to a record low of 4 to 6GW by 2025, down from 15GW in 2019,” AEMO says.

This is a real Ozzie success story, which has happened despite the Right's slavish devotion to their fossil fuel masters.  And it happened because a leftish government introduced subsidies for small-scale/rooftop solar.    The subsidies drove rapid take-up, and this in turn drove down the before-subsidy costs in a classic learning curve virtuous cycle.  These days, one can put 5 kW of panels on one's roof for ± A$5000 (US$3500). It also made people aware of renewables; so much so, that when one talks about solar, everybody thinks one means rooftop solar.

The tremendous growth of rooftop solar (3 GW in 2020 alone) has meant that some aging poles-and-wires street infrastructure is stressed on sunny days, and the grid operators, ever alert for more cash, are trying to get a "solar charge" introduced because "it's not fair".  Ignoring of course that the wholesale price of electricity has been driven down by the jump in renewables in the system, reducing electricity costs for everyone, not just those with rooftop panels.   Meanwhile, on hot, sunny days, local solar actually saves the wider grid from being overloaded (and shutting down) when all the aircon units on individual houses are run., because typically, it's sunny when it's hot.  Duh.      

The obvious solution to overloading the poles and wires, which in fact existed when I put in my first set of solar panels a decade ago. is a smart meter, which disconnects the solar panels from the grid when the voltage on the local grid rises too high, stopping the grid from burning out.   

The key point I want to make though, is this: Australia went from zero solar to 77% (on sunny days) in little over a decade.  Similar subsidies and targets could drive behind-the-meter household storage to high enough levels to stabilise the grid; and also EVs to 100% of sales.  Within 15 years.  Subsidising/incentivising a technology which has a steep learning curve drives very rapid increases in installations.  Not gonna happen in Oz, given our troglodytic backward LNP government, so don't hold your breath.

Why Australia's coal subsidy was cooked up

 I talk here about the proposed "capacity payment" which is really just a horribly expensive coal subsidy.

The authors of the report I mention also wrote this article, which points out that most coal power stations will be loss-making by 2025.  The response of the government was the new coal subsidy plan.  There is a case for capacity payments, but they should only go to generators that can supply "dispatchable electricity", in other words, electricity supplies which can be rapidly ramped up and down, like gas, hydro and batteries, and unlike coal.

Coal-fired power stations in Australia’s National Electricity Market (NEM) will confront grave financial difficulties within the next 5 years due to extra competition from a large influx of renewable energy supply. 

The analysis detailed in this report suggests that the financial viability of several coal generators in the NEM will become severely compromised by 2025 such that closure becomes an attractive or even unavoidable choice for at least one power plant owner. An additional 28 gigawatts (GW), or 70,000GWh (annualised) of renewables is expected to be installed by 2025, compared to our 2018 baseline year. 

By 2025, it is forecast that the installed renewables capacity will be 8GW of utility scale solar, 12GW of wind, and 22GW of rooftop solar. Renewables is forecast to provide 40-50% of NEM 2025 demand. The additional renewable energy generation coming online from 2018 to 2025 will be enough to supply 99.9% of the Australian Energy Market Operator’s (AEMO) expected demand growth and 98% of the gap expected to be left from the Liddell power station retirement. Even after filling the demand growth and Liddell gap there will be surplus renewable generation of approximately 57,000GWh. 

As a result, coal and gas generators will be displaced in the wholesale market, due to the merit order effect. Renewable generators have extremely low operating costs (economically defined as short run marginal cost or SRMC) largely due to having no fuel costs (as wind and solar resources are free). Renewable generators can therefore bid into the market at prices close to zero, undercutting other generators on price. Increasing amounts of renewable installations therefore reduce the output of other generators with higher operating costs. 

We expect around three-quarters of gas generation and one-quarter of coal-generation to be replaced by renewable energy generation in the seven year period. The incoming renewables will also have a deflationary impact on wholesale electricity prices, further decreasing the profitability of existing plants. Coal plants will see a double hit to their electricity sales: both volume and price is forecast to decrease out to 2025. The considerable reduction in coal generation and wholesale electricity prices is expected to drive reduction in coal plant wholesale spot market earnings (Earnings Before Interest and Taxes or EBIT). 

Coal plants could suffer an estimated EBIT reduction of up to 119% comparing 2018 to 2025. In a scenario where prices in 2025 are the same as NEM-wide 2020 prices (Scenario A in our study), Eraring, Mt Piper and Vales Point B would be expected to be losing money. In a scenario where price reduces down below 2015 prices (Scenario B), Eraring, Mt Piper, Vales Point B, Gladstone and Yallourn W be making a loss. This is based on EBIT estimations in the case that the generators are, theoretically, fully spot market exposed (i.e. does not include contracts) and excludes revenue from other services such as FCAS.

With this magnitude of reduction in EBIT, coal generator exits are likely to occur far sooner than AEMO has planned for in its Integrated System Plan (ISP). Once a coal generator exits the market, the dynamics outlined in this study will change: prices are likely to then increase near term and other coal generators that remain online may benefit from increased revenue. Electricity sector investors are recognising that the plunging cost of solar, its rapid speed to deploy, and its vast popularity with investors and Australian householders has led to an irrevocable change in the shape of the electricity supply-demand curve and market that leaves inflexible and high fixed cost baseload coal plants ill-suited to the future grid. 

Unfortunately for investors in coal plants, while there remains plenty of evening demand after the sun sets, the amount of daytime demand is becoming so small that coal plants are left in a battle amongst each other to remain online. This is a serious problem for aging coal plants because once they switch off, it typically takes several hours to start back up again and then several more hours to be capable of reaching full output, and by then the evening peak demand window of opportunity has passed. In addition, such modes of operation place considerable stress on the components of a coal plant, increasing maintenance costs and reducing their life. 

Other dispatchable power plant technologies are much better suited to this new future, dominated by solar and wind, because they can ramp their output up and down more quickly and with less stress on their components. Given this context, the New South Wales Government’s Electricity Infrastructure Roadmap (2020) provides an essential and timely response to ensure coal plant capacity is replaced in advance of their exit. 

Supporting the findings in our report are that several energy market corporations have already substantially written-down the value of their generation assets or cancelled upgrade plans, as announced over February 2021: 

 Origin Energy has downgraded its energy market full year EBITDA by 8.6% (earnings before interest, taxes, depreciation, and amortization), blaming low wholesale prices and the drop in demand due to the pandemic 

 AGL has written down over $2.7 billion of value, due to reduced wholesale power prices, a failure to account for coal closure site rehabilitation and government plans to underwrite plants 

 More than $1 billion has been wiped off the value of Queensland government-owned fossil fuel generators as falling wholesale electricity prices slash generator profits. Profits generated by Queensland government-owned generators, including those controlled by Stanwell Corporation, CS Energy and CleanCo, fell by 88% in the 2019-20 financial year.  

 Delta Electricity, the owner of Vales Point coal plant, dropped its bid for an $8.7m publicly funded upgrade. 

This report has chosen to focus its analysis on coal plant profitability, as exit of coal plants has substantial implications for energy security, price and emissions outcomes but gas power plants will also suffer substantial deterioration in profits (exacerbated by recent dramatic hikes in gas prices). Yet this is partly mitigated by the fact that gas power plants tend to have lower fixed costs and much greater ability to ramp output up and down quickly. Peaking gas will thus play a role into the future, however the high short run marginal cost compared to renewables and batteries is likely to drive significant reduction in gas generation. 

Energy storage technologies such as batteries or pumped hydro have a feature that gas does not possess; they can take advantage of periods of plentiful sun or wind to replenish their storages at very low cost. This is in addition to having significantly faster ramping capabilities than gas plants, let alone coal power plants. Furthermore, for short peaks in demand batteries are already the lowest cost option for providing dispatchable capacity.  

It is expected batteries will play a growing role into the future due to ongoing technology improvements that have been characterised by double-digit percentage annual cost reductions. These physical and economic realities mean that efforts to keep inflexible coal plants afloat, let alone build new plants, are likely to be counter-productive in terms of both energy affordability and reliability as well as being contrary to both Federal and State Government’s commitments to address climate risk. Rather than seeking to delay or even deny the inevitable exit of coal, governments, as well as investors, need to be planning to replace them. 

Australia's new coal subsidy

 From IEEFA

Households may soon face a new charge on their power bills – potentially double that from the carbon price – if Energy Ministers agree to a proposal for a new capacity payment to power companies, according to a new report prepared by the Institute for Energy Economics and Financial Analysis (IEEFA) and Green Energy Markets analysing the cost and reliability aspects of this capacity payment recommendation.

The Energy Security Board (ESB), with the backing of Australia’s Federal Energy Minister, wants electricity consumers in the national electricity market (the “NEM”) to start paying capacity payments to generators.

Johanna Bowyer, report co-author and IEEFA electricity analyst says under the scheme, electricity consumers would pay power plants not just for the electricity they actually generate, but also for the size of capacity installed in the power plant, irrespective of how often it might be needed.

“The ESB’s new proposal will require electricity consumers to pay primarily conventional generators such as coal and gas plants for what they could produce if the plant was operating at its full level of capacity, regardless of whether or not, or how often, the generator uses all of its capacity to produce electricity,” says Bowyer.

According to the ESB and Federal Energy Minister Angus Taylor, this new payment is necessary because many coal-fired power stations are becoming financially unviable and if they were to exit suddenly, it could lead to blackouts.

“While it is true that several coal power plants are facing financial difficulties, our analysis finds that reliability is not at threat by the level of likely coal power plant exits over the next ten years,” says Bowyer.

“Thanks in part to actions of the Federal Government, there is a flood of dispatchable capacity entering the NEM. This covers a range of controllable sources of power from hydro to batteries, bioenergy, gas and even some small coal power plant upgrades.”

Report co-author, Tristan Edis of Green Energy Markets says the grid is in a very different situation to when Hazelwood was shut down in 2017.

“From 2017 to 2027, almost 6,500 megawatts of dispatchable power project capacity will be added to the grid,” says Edis.

“To put this into perspective, this is almost double the capacity that will be lost from the next three coal power stations due to close after 2027 – Yallourn, Callide B and Vales Point B.

“This means that all states across the NEM have enough power capacity for the next decade to meet the strict reliability standard of satisfying more than 99.998% of demand.

“There are also thousands of megawatts of further battery projects in development which could be committed to construction if required.

“Meanwhile, the extra cost imposed on consumers to keep coal power plants afloat could be very large.”

IEEFA found that based on the range of capacity market prices seen in the Western Australian electricity market, consumers in the NEM would face a cost of between $2.9 billion to $6.9 billion each and every year if the capacity payment goes through.

Bowyer says the cost for households would be substantial.

“We found households in the NEM would see their electricity bills increase anywhere between $182 to $430 a year,” says Bowyer.

“By way of comparison, the cost increase faced by New South Wales, Victorian and Queensland consumers from the carbon price was between $112 to $150.

“Based on the Western Australian capacity payment experience, consumers could be facing a new charge which is potentially more than double that of the carbon price.

Make no mistake―this might be called a "capacity payment" but it is in fact a simple subsidy to coal.  It doesn't apply to wind and solar or batteries.  Now, a capacity payment to gas generators would make sense, because gas can be ramped up rapidly to fill supply gaps.   But coal power stations take many hours to ramp up.  And just how much battery storage could be bought for the lowest estimate of the cost of this boondoggle?  Ten times the amount of the Victorian big battery, which  cost $300 million, and provided 1200 MWh of storage would provide about 30 minutes of storage for the NEM (Oz's east coast grid)  Every year!  4 hours of storage is all that's needed to allow us to get to 90% renewables.  Yet battery storage is excluded from this capacity payment.  

The Right screeched and shouted about the carbon tax when it was introduced.  They won an election based on their hysteria.  They claimed that they were worried about the "Aussie battlers", that higher electricity prices because of the carbon tax would crush Australia (hint: it didn't―almost all the proceeds were handed back in the form of tax cuts).  And yet they are happy to enthusiastically support an impost which could cost twice as much as the carbon tax.  As ever, the well-being of their donors matters more than the public interest.  Shameful.

The Australian is Murdoch's right-wing "quality paper" in Australia

A new offshore wind farm in Gippsland

 Gippsland is an area of Victoria east of the state capital Melbourne.  It is the site of several coal-burning power stations which burn the most polluting form of coal, brown coal (lignite).  But it has several advantages for renewables:

• Because of the coal power stations, there is an existing grid running through to where most demand is, i.e., the metropolis of greater Melbourne.
• The wind in Gippsland tends to be strong and reliable, and also has a low correlation with the wind in Eastern Victoria/South Australia.  Together, these two wind regions can produce less variable output.
• Even though it's not as sunny as the NW of the state and Western NSW, with solar panels here producing on average 11% less than in the north-west, that's still respectable, and wind and solar in this region have a small negative correlation, so that the output sent through to Melbourne is more stable, meaning that less output would have to be curtailed to prevent overloading the grid.

I have already talked about the Star of the South wind farm, which will provide 18% of Victoria's and 5% of the nation's electricity.

This report about a new wind farm is from Peter Gardner

A Scottish offshore wind company Flotation Energy has a project on the drawing board for Gippsland. It joins the Star of the South as the second major offshore project for the region. The company website notes that this “is a 1,500MW energy transition project. It will be located in the Bass Strait, off the Ninety Mile Beach coastline. The electricity will be exported to the Latrobe Valley, where there is a strong electricity grid, due to the presence of ageing coal power stations.”

Flotation Energy is a major offshore wind developer in the UK working on 9 projects around the globe promoting the advantages of offshore wind, and in particular floating offshore turbines. They note that “Floating offshore wind is a simple concept with a big future. It means that you can take wind turbines into deeper waters, where the winds are stronger and more reliable. Further offshore, the wind turbines have less environmental and visual impact. This means that floating wind is popular with politicians and local communities. It has a very big role to play if governments are to achieve their net zero targets. The global potential for floating wind is enormous.”

Their website emphasizes the need for climate action. “The threat of climate change is the biggest challenge facing our planet. Urgent action is required, from governments and business as well as from local communities and individuals. We have seen the growing extremes of climate change having a huge impact, with lives being lost and many communities threatened by worsening storms and floods, heat waves and droughts. The poor, disadvantaged and vulnerable often suffer the most. Now is the time for bold action.”

The company predicts the rapid expansion of offshore wind. “This rapid expansion has been driven by the increasing need for de-carbonisation to tackle climate change and achieve net zero targets. Energy security, job creation and economic growth potential are also major considerations. The cost of offshore wind has fallen dramatically, aided by stable energy policy, technology innovation including larger turbines, economies of scale and less expensive finance.”

With Star of the South they could replace two of the remaining Latrobe Valley coal fired generators. The ocean they would occupy would appears to be further east that the Star of the South and perhaps further offshore in deeper water. Both the construction phase and ongoing maintenance will be a huge boon to local economies.

Unfortunately neither our local members (State and Federal) or the media have little to say on these projects (see blog on delays here). The delay on these projects appears deliberate and due to the influence of the fossil fuel industry. Climate action now requires offshore wind enabling legislation in Federal parliament and for all governments to put these projects into fast forward mode.

Floating wind turbine (Flotation Energy)

The LNP & climate change

 A cartoon by Matt Golding

Plunging renewable electricity costs lead AGL to dump gas.

 From Melbourne's The Age newspaper

Energy giant AGL is preparing to mothball one of four units at South Australia’s biggest gas-fired power station as the influx of large-scale renewable energy and rooftop solar power continues to price fossil fuels out of the market.

AGL has notified the Australian Energy Market Operator (AEMO) it will take the unit at its Torrens B power station offline in October, citing “challenging conditions” that do not support the viability of operating all four generation units.

AGL’s move is the latest sign of the accelerating clean-energy transition driving down wholesale electricity prices to the point where coal and gas are unable to compete, and comes as the federal government presses on with plans for Snowy Hydro to build a $600 million taxpayer-funded gas-fired power plant at Kurri Kurri, NSW.

Average wholesale power prices in South Australia fell sharply last year, from $122 per megawatt hour in 2019 to $51, according to the Australian Energy Regulator, which attributes the fall to high levels of rooftop solar generation and mild summer conditions. In the first three months of the year, the average cost of power per megawatt-hour fell below $0 between 10am and 3.30pm, when rooftop solar is a major contributor to the grid.

Quarterly volume weighted average price by contribution of price bands - South Australia

Source:Australian Energy Regulator

The Right, which has spent a lot of time and energy complaining that renewables would drive up electricity prices, has been silent about this.  I wonder when opposition to renewables became a litmus test for being conservative?  I wonder how long it will take them to acknowledge the facts?

Australia: propping up fossil fuels costs more than the army

 From RenewEconomy

Federal and state governments are spending more than $10 billion a year propping up the fossil fuel industry, through a system of tax breaks and cash handouts that encourage the entrenched use of oil, gas and coal by Australian business, new research by the Australia Institute finds.

The biggest portion of that figure is the whopping $7.84 billion the federal government returns to business through its fuel tax credit scheme. That’s more than the $7.82 billion it put aside for the Army in the 2020-21 budget.

The progressive Canberra-based think tank, which is a vocal campaigner for aggressive climate action, found just over $1.5 billion of that $7.84 billion went on fuel used by the fossil fuel mining industry. In other words, it subsidised the fossil fuels used to help dig up more fossil fuels.

When the states and territories’ spending on fossil fuels is added to the tally, the fossil fuel industry will have received $10.3 billion of government support in the 2020-21 financial year.

While the term “fossil fuel subsidies” may conjure up images of government hand-outs to massive coal or gas companies, the research reveals a reality that is subtler but more entrenched.

The fuel tax credit is a scheme that allows business to claim a tax credit on part or all of the fuel excise they pay on petrol, diesel, or liquefied natural gas – excluding that which is used in cars and other small vehicles that travel on public roads. It applies to small, medium and large businesses alike.

Fuel excise currently stands at 42.7 cents per litre of petrol and diesel, and 29.3 cents per kilogram of liquefied natural gas. The government credits the full amount on fuel that is used for purposes other than road transport, and a partial credit on fuel used in heavy road transport.

Fuel excise is vaguely regarded as a means of taxing road use, so there would appear to be some logic to refunding that tax when the fuel is used for purposes other than public road use.

But The Australia Institute said the link to road use was an illusion. It claimed fuel taxes were “not linked in any way to road funding, as is commonly suggested by recipients of this subsidy; they simply contribute to general revenue, like most other federal taxation”.

It argued this was tax revenue that could be allocated to any purpose – including low-carbon purposes. The decision to give it back to businesses substantially reduces the real cost of fuel, and it must therefore be regarded as a fossil fuel subsidy.

“Coal, oil and gas companies in Australia give the impression that they are major contributors to the Australian economy, but our research shows that they are major recipients of government funds,” said Rod Campbell, research director at The Australia Institute and co-author of the report.

“From a climate perspective this is inexcusable and from an economic perspective it is irresponsible. The major subsidies are Commonwealth tax breaks that mean the largest users of fossil fuels get a refund worth $7.8 billion on a tax that the rest of the community has to pay.”

The Australia Institute defines a “fossil fuel subsidy” as any instance “where governments choose to allocate scarce resources to fossil fuel industries in a way that restricts use of those resources for other government priorities”.

Record low wind cost in Australia

 From a report by RenewEconomy.

The reverse auction process successfully delivered prices that were significantly lower than those previously run by the ACT government and the lowest publicly disclosed prices so far in Australia.

Neoen was granted a 14-year off-take agreement at $44.97 per MWh, and because it is a fixed price over the term of the contract, translates into a price of around $35/MWh today. GPG secured a 10-year off-take agreement at $54.48 per MWh. As per prior auctions, the contracts are likely to operate as a contract-for-difference relative to the NEM spot price.

Other wind contracts are believed to be in the ballpark of the two bids, but retailers and most governments do not reveal their prices. (Full credit to the ACT for doing so). To put the Neoen price into context, it is equivalent to around $35/MWh at today’s prices, or one half of the average price on the NSW wholesale market in the last year.

Note that these costings include 60 MW of battery storage, in addition to the wind farms. 

In 2017, wind (without storage) cost $65/MWh, solar $70/MWh.   That's an annual rate of decline of 15%.  It must be obvious to anyone who knows these data that coal simply can't compete.  The fuel-only cost of coal power is $56/MWh, and the cost of new-build coal power is $110-$120/MWh.

Why do people still support coal?  Ignorance?  Stupidity?  Or because they're pocketing fat cheques from fossil-fuel interests? 

Canberra, Parliament house

Who supports Trump

 A most interesting chart from Vox.

Although it still amazes me that so many of the poor and disadvantaged vote for the Right in the USA instead of their real allies on the Left.

1956 Republican Platform

 

The "nanny state", 1848

There have always been ppl like this ......

Coronavirus: red states vs blue

Another telling use of data from Open Mind (Tamino):

Of the 50 U.S. states, 24 have democratic governors — let’s call them “blue states” — and 26 “red states” have republican governors. The blue states have a considerably larger population, so let’s compare the case load of COVID-19 per capita (specifically, cases per day per million population). Democrat-governor states in blue, republican-governor states in red.

After the war is over ...

(Sung to the time of 'After the ball is over', and I mean the war against the coronavirus)

Most governments in developed countries are running deficits relative to  GDP which they haven't done since the WWII.   And the question is, what will they do after we have contained the coronavirus or even found a vaccine and a cure?  One alternative is to try to cut spending and raise taxes to pay back the outstanding debt.  This is the conventional wisdom today.  The trouble is, because government spending is such a large chunk of total spending, if the government slashes spending, it will cause economic activity to decline.  

After  WWII, guided by the insights of John Maynard  Keynes, most western countries didn't do this.  Instead, they relied on economic growth to reduce their debt-to-GDP ratios.  They continued to borrow money to fund infrastructure investments.  Despite this, their debt ratios declined.  

When interest rates and bond yields are zero or even negative, it's a sign that inflation and growth expectations are so low that private investment spending isn't and won't be enough to get growth going again.   The best way to increase growth when this happens is for the government to build infrastructure funded with debt.  This way, not only is overall demand in the economy increased, but it also adds to supply.  By building freeways, urban/light rail, high-speed long distance rail, schools, wind farms, the grid, etc., the productive capacity of the economy is increased.  Cutting interest rates doesn't necessarily add to demand when interest rates are already low.  Debt-funded infrastructure spending does.

As long as the budget deficit's percentage of GDP is below the nominal rate of GDP growth, the total outstanding debt as a percentage of GDP will continue to decline.  And as long as the borrowings are used to fund projects which add to productive capacity, they are sound.

Doug Cameron, a former NSW Labor senator, made this tweet:

Public debt to GDP was huge after WW2. Didn’t stop massive public investment in jobs, public housing, education and health. Debt diminished as economic growth kicked in.

We must ignore right wing fear campaigns on debt and rebuild a better more caring and productive society.

I think he's right.  Countries which try to pay down debt using austerity, will grow more slowly than those which try to stimulate growth using deficit spending to fund infrastructure.

Keep the rate!

In Australia, the federal government is for the next few months paying all unemployed people a "covid supplement" of $550 a fortnight in addition to the dole which is $565.70. 

Many have pointed out that there has been no sympathy or mercy for the poor until the government's own supporters started losing jobs.  "It's not their fault" was one minister's memorable explanation for this sudden change.  The minister may be interested to know that unemployment often isn't the unemployeds' fault, and that before the Covid Crash,  there was just 1 job opening for every 16 job seekers. 

Now there is a campaign to keep these payments after the Covid Crash is over.

Graphic from Australian Unemployed Workers Union.  The data show weekly rates.  "Jobseeker" is the latest official euphemism for the dole.

The coronavirus & climate denialist playbook

From Yale Climate Connections:

For the climate community, observing U.S. national political leaders’ responses to the coronavirus pandemic has been like watching the climate crisis unfold on fast-forward. Many – particularly on the political right – have progressed through the same five stages of science denial in the face of both threats.

For climate change, the denial process began decades ago. NASA climate scientist James Hansen testified to Congress in 1988 about the dangers posed by global warming; the fossil fuel industry formed the Global Climate Coalition the very next year to launch a campaign casting doubt on mainstream climate science. In November 1989, President George H.W. Bush’s chief of staff, climate denier John Sununu, sabotaged efforts to develop the first international climate change treaty. Exxon in particular spent the following decades and tens of millions of dollars funding a network of think tanks to propagate climate science denial. In a memo leaked in 2003, Republican strategist Frank Luntz advised G.O.P. politicians, “You need to continue to make the lack of scientific certainty a primary issue in the debate.”

The same denial process has unfolded with coronavirus, but over a far more compressed time frame. In both crises, early warnings from scientific experts went unheeded and were often discouraged or suppressed. As a result, the American government began responding only after each threat’s impacts had become widespread and undeniable. At that point, due to the missed opportunity to prevent the outbreak of impacts, much of the response came in the form of damage control. America’s efforts to “flatten the curve” of coronavirus cases, like its efforts to bend the carbon emissions curve, were deployed too slowly.

In 2013, as the fifth Intergovernmental Panel on Climate Change report was due to be released, the five stages of climate denial were on display in many conservative media outlets. Watching the reactions to the unfolding coronavirus crisis in early 2020 created a sense of déjà vu, as many leaders exhibited the same stages of denial. In fact, many of the same actors who deny the climate crisis also were (or still are) denying coronavirus threats. Some observers have remarked that the Venn diagram of coronavirus and climate deniers is nearly a circle.

Stage 1: Deny the problem exists. This is denial at its most basic, as there is no need to solve a problem that doesn’t exist. If the issue is a hoax, as the president repeatedly has asserted about both global warming and coronavirus, the status quo can be maintained. But denying a problem doesn’t change its physical or epidemiological properties, so in the face of real scientifically quantified threats, Stage 1 denial cannot last very long.

Stage 2: Deny responsibility. Upon accepting the threat posed by coronavirus outbreaks, numerous conservative politicians and pundits have tried to shift the blame to China, with many including the president labeling it “the Chinese virus,” echoed over 100 times on Fox News. Similarly, after accepting that climate change is happening, many have tried to blame it on natural cycles, or, if they accept humanity’s responsibility, to likewise blame it on China. But here again denial falls short; shifting blame does not slow a physical or viral crisis.

Stage 3: Downplay the threat. President Trump spent weeks downplaying the threat of coronavirus, early maintaining that it had only infected one person in America, that “one day like a miracle it will disappear,” that “within a couple of days [the number of infected Americans] is going to be down to close to zero,” and so on. Fox News and other conservative media outlets followed his lead in downplaying the risks. Similarly, Trump has said the climate “will change back,” and conservative media outlets have spent decades arguing that climate change is no big deal. Yet, as the devastation of coronavirus and climate change impacts has become a reality, doubters have been increasingly forced to move beyond Stage 3 denial.

Stage 4: Attack the solutions as too costly. Trump has claimed that coronavirus curve-flattening measures recommended by experts – like long-term social distancing – are too costly. He instead suggested preemptively loosening social distancing measures to reopen the national economy “sooner rather than later” (an approach Fox News has also championed), as well as various unproven drug treatments, with Fox News again following suit. A number of ideologues have argued that older Americans would rather die than cause the economic disruption associated with extended social distancing. Some partisan policymakers and pundits similarly oppose virtually all large-scale climate solutions as too expensive, instead proposing worthwhile but inadequate steps like simply planting trees or capturing carbon from power plants to inexplicably use for extracting yet more fossil fuels.

Stage 5: It’s too late. Some have proposed, once it became obvious that the coronavirus outbreak had become widespread, that governments should just maintain the status quo, try to build herd immunity, and cope with the consequences (such as overwhelmed health care systems that could result in millions of deaths). Climate justice essayist Mary Heglar coined the term “de-nihilist” to describe those who have similarly succumbed to the fear that it’s too late to stop climate change. Such attitudes only hamper efforts to constructively address both problems.

[Read more here]