by Fergus Green & Richard Denniss
[Originally published in the Australian Financial Review, 26 November 2019]
The amount of fossil fuels that companies and governments around the world expect to extract over the coming decade is startlingly out of kilter with the imperative to maintain a stable climate system – and Australia is a large part of the problem.
Under the Paris Agreement, countries have set the goal of limiting global heating to well below 2°C, and preferably 1.5°C, above pre-industrial levels.
A ground-breaking new analysis, produced by an international consortium of research institutes, has released the first estimate of the global fossil fuel “production gap” – a new indicator that tallies national plans and projections for coal, oil and gas production, and compares these with the production levels that would be consistent with the Paris goals.
The results of the analysis, contained in the inaugural Production Gap Report, are startling. Fossil fuel producers are on track to produce by 2030 more than double the amount of fossil fuels that would be consistent with a 1.5°C pathway, and 1.5 times the amount that would be consistent with a 2°C pathway.
The Production Gap Report also includes analysis of production plans and projections in key fossil fuel-producing countries, including Australia.
For Australians, the results are a cause for global embarrassment. Australia is already the world’s largest exporter of coal and liquefied natural gas, making it the world’s third-biggest exporter of fossil carbon, behind only Russia and Saudi Arabia.
But the report reveals the staggering extent of Australia’s plans to expand coal and gas production even further. The federal government’s own projections show gas and coal production in Australia growing by another one-third by 2030, relative to 2018 levels. Under these projections, Australia would nearly double fossil fuel production by 2030 relative to 2005 levels.
Indeed, fossil fuel companies have proposed so many new coal mines, gas fields and export terminals in Australia that, if completed, they would represent one of the world’s largest fossil fuel expansions – at a time when these industries urgently need to be winding down.
That is why the federal and state governments should implement bans on any new fossil fuel exploration and production, and develop plans for the managed decline of Australia’s fossil fuel sector.
The federal and state governments are instead subsidising, aiding and abetting – even championing – this reckless fossil fuel expansionism. Such support is the product of a deeply corrupted process. When mines are ruled inappropriate, it’s the planning rules that get changed, not the mining companies’ plans, as is occurring in NSW.
Concerted pressure from civil society and other countries will be necessary to break this pattern in Australian politics which, presumably, is why the federal government is so keen to restrict community protest.
However, the Australian public, some segments of the business community, and some of the country’s more independent governmental institutions, are beginning to take a stand on this issue.
Recent bushfires have reignited the climate debate that some hoped the election had quashed. Australia’s corporate and financial regulators have been increasingly vocal on the climate-related financial risks and obligations of businesses and directors, including “transition risks”, such as abrupt changes in market sentiment, technology and regulation. Even the head of the UNFCCC, Patricia Espinosa, has now said that countries Climate Action Plans must include plans to reduce fossil fuel supply.
Unsurprisingly, as the devastating effects of climate change ravage other countries, foreign governments are increasingly spending diplomatic capital to criticise countries engaging in conspicuous acts of carbon production.
In August, in response to raging fires in the carbon-storing Amazon rainforest, French President Emmanuel Macron led a wave of international pressure on Brazilian President Jair Bolsonaro, telling him that France would oppose a trade deal between the EU and South America’s Mercosur nations.
The Morrison government has already had a taste of foreign policy blowback, with Pacific Island leaders warning that the government’s planned “Pacific Step Up” could fail because of Australia’s coal expansionism and climate inaction. And last week, the Swedish Central Bank announced it had divested its Queensland state government bonds due to the state’s high exposure to coal.
If Australia continues to fuel the global fossil fuel production gap, it will need to get used to this kind of criticism.
Dr Fergus Green is a Postdoctoral Researcher at Utrecht University in the Netherlands & Dr Richard Denniss is Chief Economist at The Australia Institute. Both were contributing authors to the Production Gap Report.