South Wind

Australian leaders have caught the timidity virus. Afraid of becoming a target they avoid talking Australia up. They seem to think frenzied activity is a substitute for hard, strategic thinking. But busyness is not substance.

So says Paul Keating, prime minister over five eventful years in the 1990s, whose “grand ambition” for his country has been laid out for all to see in a just-published book of that name by James Curran, professor of modern history at Sydney University.

Co-leader of the team that transformed Australia in the closing decades of the last century, Keating is a very private person, poles apart in personality from the other half of that team, the famously extrovert Bob Hawke. Now 82, he remained single after his marriage formally ended 18 years ago.

Sitting down with Curran at a Sydney Writers Festival event last month, Keating talked expansively about his worldview and the complexities of his foreign policy. I haven’t yet read the book, but if that conversation is anything to go by it’s highly relevant to Australia’s story today, three decades after Keating left office.

Curran set out to explore what government, political power and Australia as a whole could achieve, “and I saw Paul Keating as a great case study, because here was a prime minister who while he was firmly facing towards the future never forgot the past.” Keating’s vision, he said, was shaped by deep exploration of the long history of great power machinations leading to the two world wars.

“He comes into into parliament as a 25-year-old in 1969 when a lot of his parliamentary colleagues are in a state of alarm and panic about facing up to a world without Britain. He watches Whitlam and Fraser throughout the 1970s argue the toss over national symbols. In the 80s he was opening up the Australian economy and tethering it to the global economy.”

Keating takes up the story. “My first interest was in Asia, because my father’s brother was executed by the Japanese on the Sandakan Death March in Borneo.” During World War II, he said, Australia was dragged into Asia to defend British possessions there. He cited wartime PM John Curtin describing Britain’s Singapore capitulation as “an inexcusable betrayal”.

“These things stick with you. And my family were well and truly aware of this… I always had this impression that relying on a great and powerful friend didn’t work.” That impression has been reinforced by Canada’s current experience of the “great and powerful friend” next door.

Keating’s rise to the prime ministership in December 1991 was followed within days by the collapse of the Soviet Union, then a week later by the visit to Australia of President George HW Bush, then a month after that by the arrival of Queen Elizabeth on a royal tour.

“I was not going to waste a thing”, said Keating. “Before that all the Australian prime minister ever attended was the Commonwealth heads of government meeting … a non-event. So, we were part of nothing, and I never like being part of nothing… So I said to my colleagues, I’m going to get this president in some sort of a headlock and get something from him.”

The result was an agreement with Bush and his successor in the presidency, Bill Clinton, to expand a body called Asia-Pacific Economic Cooperation. That forum, initiated by Hawke in 1989, became an annual leaders’ meeting. Chinese and Russian leaders were persuaded to join along with more South American countries.

APEC, a unique Australian diplomatic success story, happened because Hawke and Keating saw a role for this country independent of great powers. That independence has since been undermined by unquestioned backing for US military interventions in Afghanistan and Iraq – and by AUKUS, the hideously expensive nuclear submarine agreement with the US and the UK.

Keating sees a fundamental flaw in Australian fear of China. He believes China’s main strategic focus is Central Asia, not Australia or other countries to its east and south. The notion of putting “a ring fence around China”, he told Curran, is “dumb with a capital D.”

In charting its future, said Keating, Australia’s overarching aims should be “sovereignty, control of our own affairs; coming to terms with indigenous Australians… and of course coming to a republic, getting away from this nonsense of having a British monarch as our head of state.”

The 1991 turmoil in Moscow seemed remote, but the turmoil of today feels much closer to home. Great and powerful friends have become self-absorbed, less outward-looking, and less friendly.

Keating’s right. Alliances that don’t empower us sap our energy, leaving us timid and impotent.

The timing was exquisite, if unintentional. On the day the United Nations’ retiring leader urged a distracted world to focus on combatting climate change, Australia’s formal Opposition withdrew its support for its country’s “ideology-driven” 2050 goal of net zero carbon emissions.

In a week full of news, Opposition energy spokesman Dan Tehan’s energy policy statement didn’t get much attention. He should be pleased, given the awkward questions raised by his promise to “take a chainsaw” to climate laws.

The Coalition avoided mention of the whole reason for the energy debate – the destabilising impact of fossil energy on climate. It persistently treats our impact on climate and the biosphere as a matter of ideology, something you can choose to take seriously, or not. It chooses not.

This is where the Trump administration in the US and a reciprocal cultural cringe in Australia have landed us. “Reality” is being determined by the word of a favoured leader who says climate change is a hoax, which makes it okay for willing acolytes to ignore or trivialise the overwhelming evidence to the contrary.

China is going in the opposite direction. A Carbon Brief analysis shows nearly three-quarters of its current five-year plans include climate and energy policies or targets, while its total installed renewable wind and solar capacity is now over 1970 GW. The US figure, by comparison, is 450 GW.

“The greatest power is not the power to dominate. It is the power to build a future that works for everyone.” So said the retiring UN secretary-general, Antonio Guterres, opening the annual leaders’ gathering at the General Assembly last week. That seems a forlorn hope as domination continues to grab the headlines.

Unlike the Coalition and the Trump administration, Guterres listens to what science says about the climate. To leaders in New York he repeated the warning of the Intergovernmental Panel on Climate Change that the world was “almost certain” to breach the Paris Agreement “safe” threshold of 1.5C.

But even this understates the danger, both directly from heating and indirectly from complacency.

The IPCC smooths out spikes in temperature records using a running 20-year average – a decade before and a decade after a given year. The yearly record says that the 1.5C heat threshold was crossed during an El Niño phase in 2024, but the IPCC won’t lock in the breach until the 2030s.

Veteran climatologist James Hansen and other scientists oppose this protocol, which virtually guarantees a delayed response to weather and climate threats. Interests which want to understate the danger can point to the official figure and say that the world has time in hand to fix things.

But it doesn’t. The year after that first crossing of the 1.5C boundary in 2024, our burning of petrol, diesel, marine and aviation fuel, natural gas and coal added over 38 billion tonnes of carbon dioxide to the atmosphere. And who could have guessed? – 2025 was the second-warmest year on record despite a “cool” La Niña.

That’s what’s driving the long-term trend as another heating phase in the El Niño-Southern Oscillation (ENSO) cycle cranks up. This El Niño is shaping as one for the ages. It will likely push this year above the 2024 heat record, and then make 2027 yet another record-breaker.

Over 90 per cent of greenhouse warming’s excess heat energy is stored in the ocean. In August the average global sea surface temperature surpassed 21C – another record. August is normally a cool month for sea surface temperatures.

But what does normal mean any more? Surface temperatures in the central and eastern equatorial Pacific, where El Niños form, are at record highs, while some lower depth layers are a monstrous 6C warmer than average. As most of the global ocean is in our hemisphere, the southern summer is when most ocean heating happens. So we have that ahead of us.

Past El Niño patterns indicate that Australia generally and south-east Australia especially will be hotter and drier than average this summer, with a greater than usual risk of wildfire and a high chance of severe coral bleaching on the Great Barrier Reef. But we have no reliable guide as to how bad this will be, because we’ve never been here before.

The 2026 COP, the 31st, begins in Antalya, Türkiye in the second week of November. Australia is presiding over COP negotiations, from which Donald Trump’s US is formally absent. Next week in Fiji and Tuvalu we will co-host, with Pacific leaders, special pre-COP ministerial and leaders’ events.

Expect nothing from any of this. Then, if nations can find the wherewithal to push through any sort of substantive and lasting emergency measure, you’ll get a pleasant surprise.

Federal and South Australian leaders had a trying time last week explaining how their funding support over many years had failed to stop the demise of the blast furnace at Whyalla steel works.

On the other hand, Nationals leader Matt Canavan wasn’t holding back. Closing Australia’s only producer of structural steel, he said, meant that “we can’t make steel to make buildings, bridges or railway lines.”

“It’s not just a practical or productivity issue, it’s now a national security issue… It is an indictment on Australian energy and industry and our national security that we have lost the last blast furnace in this country to make structural steel,” he said.

He’s right – up to a point. Whyalla’s 60-year old blast furnace supplied less than a sixth of the steel Australia needs, but it was the only domestic source of rail and structural steel.

As the world’s largest iron ore exporter Australia ought to produce all the steel it needs instead of the current 65 per cent, but technical and market realities dictate otherwise. Even accounting for transport costs, China’s far larger mills, cheaper labour and huge domestic market give its steel a cost advantage over the local product.

But what’s really getting under Matt Caravan’s skin is government policy demanding that steelmaking embraces new low-carbon technologies, bringing to an end those long-standing icons of the industry, coal-fired blast furnaces.

Iron and steel production is the world’s highest industrial emitter of carbon dioxide, accounting for roughly 10 per cent of global emissions and surpassing entire sectors like aviation.

Both contenders to buy the Whyalla works – India’s Jindal Steel International and Brisbane-based M Resources – favour alternatives to coal-fired steelmaking. Both were fully across the loss of the blast furnace and have factored that into future plans focused on electric arc and electric smelting furnaces – technologies that are developing rapidly in both Asia and Europe.

So all parties with a continuing interest in the business want to run Whyalla as a green steel producer, using renewable solar energy instead of thermal coal. The pressure is now on the federal and South Australian governments to make sure that unlike its departing owner, Sanjeev Gupta’s GFG Alliance, the new proprietor is capable of keeping the operation going.

Most pressure is coming from political opponents of any and every move to eliminate the burning of coal in the production of steel and other metals. The treatment of this issue by Matt Canavan and One Nation’s Barnaby Joyce puts them among the disreputable minority globally (including many of their political colleagues) who trivialise efforts to cut carbon dioxide emissions.

But cutting steelmaking emissions is anything but plain sailing. It needs time, a lot of hard thinking and more than a little inspiration to transform this country’s entire energy and steelmaking regimes. And that calls for a level of patience that an adversarial political system rarely allows.

A steady, reliable supply of green hydrogen obtained from water by electrolysis remains central to Whyalla’s long-term future. That needs abundant clean energy. Until it’s available, “grey” hydrogen derived from a mixture of natural gas and super-hot steam will power steelmaking – and also the decarbonising of iron ore for export, making that product marketable in Europe.

Shutting their ears to political detractors, Australian mining and metallurgy companies have committed serious resources to developing electric smelting technology. They know it’s a long, hard slog, but they also know it can work. Like so many inventions (LED lighting, for instance, invented 99 years ago), it just needs time.

Laboratory-scale electric smelting using hydrogen is happening in Newcastle, NSW, and multiple similar projects are under way in WA. NeoSmelt, a joint venture at Kwinana, WA, is underpinned by capital from all the big names in Australian steel plus Mitsubishi Corporation – along with gas giant Woodside Energy, betting on returns from grey hydrogen.

A month ago, Andrew Forrest’s company Fortescue announced it had produced the first hot metal at its electric smelting plant at Christmas Creek in the Pilbara. And showing off its green energy commitment, last week Fortescue launched a racing team, Fortescue Zero, to compete in the all-electric Formula E World Championship.

Australian innovation extends to the electricity grid. In the race to replace retiring coal-fired power with solar, wind and battery storage, a potential blackout risk is being addressed by the Western Downs Battery storage project using virtual synchronous machines, a new invention involving a wholesale rethink of inverter technology.

This Australian world-first is happening on the Darling Downs in Matt Canavan’s home state of Queensland. But I’d hazard a small bet that he’s too hell-bent on resuscitating coal power to notice.