Tuesday, 9 October 2018

The Price of Survival.

I think there’s little need to repeat the dramatic pleas the UN's Intergovernmental Panel on Climate Change (IPCC) made last Monday: to avoid world average temperatures rising above 1.5°C greenhouse gas emissions must be cut by 45% within the next 12 years and reach 0 (as in nada, zilch, rien) within 32.

There’s a detail, however, most commentators have overlooked. To achieve those reductions, in a capitalist economy, where prices are the rationing device par excellence, it “would require carbon prices that are three to four times higher than for a 2°C target” (Yes, maties, that was there, too).


The release of the IPCC report came a few days after our latest prime minister, Scott Morrison (aka ScoMo), concluded a tour over drought-striken regional Australia.

Tuesday morning former mining sector employee and current Federal Environment minister Melissa Price went to the radio: “We make no apology for the fact that our focus at the moment is getting electricity prices down,” she said. “Every year, there’s new technology with respect to coal and what its contribution is to emissions. To say that it’s got to be phased out by 2050 is drawing a very long bow.”

“That would be irresponsible of us to be able to commit to that”, added the extremely responsible Price.


Faced with that one would be tempted to conclude that Morrison and Price are two idiots. That, however, is a simplistic diagnostic and, as all wrong diagnostics, is bound to lead to a wrong treatment.

For one, because that “explanation” ignores the politics behind those two characters.

As it is known, Morrison, a conservative Coalition leader, replaced Malcolm Turnbull -- who once championed a carbon tax -- after a conservative backlash leaded by Tony Abbott ousted Turnbull. Turnbull’s popularity had plummeted among other things because energy prices had risen, placing low-income consumers in a very difficult situation, thus the lack of apologies.

Morrison was Turnbull’s rearguard action to stop the even more conservative (to say nothing of repulsive and odious) Peter Dutton from getting the top job.


But there are, in fact, at least 76.4 billion other very good reasons for Morrison’s and Price’s unapologetic “idiocy”.


Look at the chart above. At the current rate of production, the world’s proven reserves of coal should last 134 years, on average. But averages hide enormous variations: the reserves of the Russian Federation and North America could last between 350 and 400 years. That’s a lot of coal laying around, waiting to make its owners richer. Put yourself in their shoes: would you be anxious to let that money go?

Let’s look more closely at those reserves:

World's Top 10 Proven Coal Reserves
(billions of metric tones)

USA            237.3
CIS            157.0
China          114.5
Australia       76.4
India           60.6
Germany         40.7
Ukraine         33.9
Kazakhstan      33.6
Colombia         6.8
Canada           6.6

That data are for the end of 2012. Australia has the fourth largest coal reserves and is the fifth producer, but given its small population, most of that output (421 million tones per year) is for export. That’s how Australia manages to be the world’s second coal exporter.

And that coal is presently fetching a very good price: US$114.16 per ton, up from a five-year minimum of 49.02 in January 2016 (source). At the current exchange rate, that is 161.50 little Aussie battlers.

Moreover, coal mining is -- and has always been -- a crap job. Still hundreds of thousands if not millions of people all over the world earn a living doing that (and, wages being what they are, they are relatively lucky). How would you feel if your livelihood depended on that?

That’s to say nothing of those whose livelihoods depend indirectly from coal mining. Or those who grew used to the cheap energy fossil fuels make possible (because it’s not only coal we need to take into account: we also need to cut down other greenhouse gases emissions, like methane, which largely comes from cows).


Although it lacks the pleasant self-congratulatory implications of the “idiocy” explanation, this more comprehensive framework has an advantage: it also explains ScoMo’s negative attitude towards the capitalist development of renewable power generation alternatives.


Morrison is a member of the Pentecostal Church. Unless some exceedingly bright young internet post-Keynesian comes up with the silver bullet to kill that monster, it seems we are left with ScoMo’s own solution to climate change. “I’d encourage others who believe in the power of prayer to pray for that rain,” he has been quoted as saying during his tour, “and to pray for our farmers. Please do that”.

Either that or we ditch capitalism, before it bakes us to death and destroys our civilisation or maybe even life as we know it.


Theres something chillingly apocalyptic in a religious man delivering us straight into the gates of Hell.

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