Punting on coal is a loser, tell the Government

First published in The Age, 10 September 2009

Everyone else can see the folly of propping up polluting industries.

THERE'S an irony in the rushed construction of a new security fence around the Hazelwood power station, in anticipation of a community protest this weekend.

The Government, it seems, is more in interested in protecting Hazelwood from protesters, than protecting our climate from Hazelwood.

Victoria has been shamed as the least climate-friendly state, running three of Australia's four dirtiest power stations. And Hazelwood is one of the dirtiest in the developed world, scheduled to close this year but in 2005 given a lifeline by the State Government to 2031.

The timing is significant, because it reflects the climate policy strategy of the major parties: hang on with dirty coal till 2030-35, and hope that by then carbon capture and storage (CCS) technology will work. For now, pour money into CCS research, but stall on serious emission-reduction strategies.

This is reflected in the proposed carbon pollution reduction scheme. Treasury modelling for the defeated legislation shows that Australia's actual emissions don't drop below the 1990 baseline until 2035, when it assumes CCS will be commercially viable. Meanwhile, the ''decrease'' in emissions is engineered by buying carbon credits at the lowest price, likely from Papua New Guinea and Indonesian forest offset schemes, which are beginning to look like scams in the making.

Another indication of the punt on coal is the Federal Government's expansion of Australia's coal export capacity. The two infrastructure projects announced in 2008 will alone result in destination nation emissions 17 per cent greater than Australia's total emissions.

If you are going to bet your house on a horse, you need to be assured that it is going to hit the winning post first. But already CCS is stumbling, and the 2030 timeframe is being pushed further into the future.

Recent analysis from a team at the Potsdam Institute in Germany, whose work was influential in the emissions reduction work published by the Intergovernmental Panel on Climate Change, is startling. Assuming a global warming target of two degrees - now far too high according to IPCC chair Rajendra Pachauri - they find that the carbon budget from 2000 to 2050 has already been one-third consumed. If global emissions can be cut 2 per cent a year in Copenhagen, which is highly unlikely, the carbon budget to 2050 will run out by 2030. If emissions keep growing at the present rate, the carbon emissions budget for the two degrees target will run out in 2021!

The increasingly grim observations of global warming impacts demand that we move to a zero-emissions energy system quickly. CCS simply cannot deliver such an outcome in the relevant time-frame, if it is ever proven to work at scale. Recently the British Government admitted that proposals to require existing power plants to fit CCS technology would force their closure on cost grounds.

Retrofitting current generators isn't cost-effective, so CCS depends on building a whole new array of coal-fired power stations, at which point our carbon budget will already be in planet-threatening deficit. Waiting to see if CCS is technologically viable at scale, let alone cost-competitive in two or three decades time, defies the principles of sensible risk management.

It just doesn't add up. A recent Harvard University study finds that electricity costs could double for first-generation CCS plants. At the same time, innovation continues to lower the cost of renewable energy at an estimated 10 per cent a decade, and increasing scale of renewable plants is also moving that cost curve down.

China says it is more interested in spending resources on energy efficiency and building renewable energy capacity than adding CCS to coal power stations.

It plans a national feed-in tariff for large-scale solar plants by the end of 2009, paying up to half of the price of solar power systems of more than 500 megawatts, with support rising to 70 per cent in remote regions. ''The idea that carbon capture has to happen in China is a Western idea,'' says Stanford University researcher Richard Morse.

Former Queensland premier Peter Beattie, now his state's trade commissioner in Los Angeles, says time is running out for coal: ''The traditional markets for its product will start slowly shutting down as green energy becomes more price-competitive and public policy continues to demand greener outcomes.'' The result in the US is that plans for 100 coal-fired power plants have been stopped in the past 18 months.

The writing is on the wall. Robin Batterham of the Australian Academy of Technological Sciences says that if within three years from now ''we don't see some of these large-scale plants actually happening, then people are going to say, 'This is not a real alternative'.'' Large-scale CCS plants in three years is a pipe dream, a bet on a horse that isn't going to make it to the starting gate.

Clean coal has become a cargo cult for government and the coal industry, but what may descend from the skies is less likely to be salvation than the recognition that the dirty, big cloud overhead is killing our planet's wonderful diversity of life and habitat.

That fence around Hazelwood is locking in a disaster, but it will not keep its critics at bay.

David Spratt is the co-author of Climate Code Red: The Case for Emergency Action, shortlisted for the 2009 Victorian Premier's Literary Awards.