Thursday, May 19

Investing in coal power would be a costly mistake | Trent Zimmerman and Philip Dunne

Wherever you are on the planet, the last 12 months have been very difficult.

In seeking the strongest economic recovery from the pandemic, it is understandable that many on the center-right, in particular, want to focus on boosting existing industries. But when it comes to the energy sources of the future, investing in coal-based power would be a costly mistake, not only for the environment but also for the economy.

The environmental case against coal has been well known for some time: its negative impact on the climate and the quality of the air we breathe is significant and indisputable. There is no doubt that countries that continue to use coal as an energy source are making a material contribution to global warming. At a time when Western allies are encouraging big polluters like China and Russia to clean up, it is vital that we lead by example and end our own dependence on fossil fuels.

Of course, this cannot happen overnight. The coal industry is an important part of the economies of many countries and a major supplier of energy; ending that immediately, as some argue, would damage livelihoods and access to electricity. But by making wise decisions now, we can shift our energy supply from coal without inflicting that damage on people’s lives.

In addition to being bad for the environment, coal is no longer the energy panacea it used to be. In fact, the rapid growth of renewable energy sources has made coal expensive and uncompetitive. Alternative and cleaner options for generating electricity, such as solar and wind, have plummeted in costs over the past decade, while the price of coal has remained stable. If, as expected, these trends continue, it won’t be long until coal is the most expensive conventional energy option. Relying on coal means not only higher electricity costs in the country, but also drastically reduced international trade potential with key export markets now committed to eliminating it entirely.

The UK has enjoyed a remarkable and rapid transition from coal power in recent years, with accelerated growth from renewables replacing the ‘gas dash’ of the 1990s and cutting coal by 40% of electricity generation in 2012, down to just 2% now. The national power grid runs regularly for weeks at a time with no use of coal at all, and by 2024-2025 coal generation will have completely disappeared from the country that pioneered coal power in the industrial revolution.

While it is true to say that Australia’s dependence on coal for both power generation and energy exports is far greater than that of the UK, the risks of relying even more on it are now enormous. At a time when much of the world is trying to move away from fossil fuels, we are on the cusp of a major global turning point towards zero-carbon alternatives.

Those who advocate new investments in coal ignore this reality but, perhaps more significantly, run the risk of delaying the transition for those currently employed in the thermal coal industry. Offering false hope will only make the transition more difficult and costly for those whose livelihoods have depended on the sector.

New investments in the coal industry will leave investors, including taxpayers, with vast assets stranded and a missed opportunity to invest in the high-growth technologies of the future. Those nations that continue to evade the opportunity to clean up their power generation risk not only damaging their reputations on the international stage, but also the very real possibility that carbon taxes will affect their exports while other countries seek to reduce carbon emissions. carbon beyond its own borders.

It doesn’t have to be this way, and there is a more prosperous and cleaner alternative path available. The UK has enormous capacity, as recognized by the government, to increase its energy supply from offshore wind. Australia also has great potential for wind and solar power, and although the federal and state governments, the private sector and households are rolling out renewables at record rates, this potential has yet to be fully realized.

Where there are currently no clean energy alternatives, for example in steel production, Australia is well positioned to be a world leader in green hydrogen energy and could show the UK, which is currently struggling with how to produce steel in a friendly way. with the environment, how this can be achieved. In reality, both countries should focus on incentivizing technological advances to boost commercial viability, rather than propping up industries that ultimately face terminal decline.

An ecological recovery would also be good for employment. The UK is adding jobs in the low-carbon sector at a rate two to three times that of the economy as a whole, and these jobs are sustainable jobs in high-growth areas, and much more likely to be found in post-industrial parts of the region. country that has high unemployment rates. By supporting renewable energy and putting in place a plan to use it to replace coal in the electrification of transport and industry, Australia can also create thousands of jobs, many of them highly skilled, across the country.

After the pandemic, we are faced with big decisions about how to jumpstart our economies again. If we choose well, we will create a future that is both environmentally and economically sustainable. Let’s get on with that.

Rt Hon Philip Dunne is the UK Conservative MP from Ludlow and Chairman of the House of Commons Environmental Audit Committee

Trent Zimmerman MP is Australian Liberal Federal Fellow for North Sydney

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