Another annual climate summit is with us. More hype, more dire warnings, more noisy protests, more solemn pronouncements, more hypocrisy, more fakery.
This in a year set to be far and away the hottest in recorded history, when ice sheets are melting like never before and wildfires and heatwaves are at new levels.
The 28th Conference of Parties to the UN Framework Convention on Climate Change, which is about eliminating fossil fuels, is being hosted by a major oil and gas producer, the United Arab Emirates. It sounds like a bad joke, but it may also be a foot in the door to rein in these massive interests. That is what the UAE leader, Mohammed bin Zayed Al Nahyan, would have us believe.
Last week the United Nations Environment Program said that expected oil and gas production from exploration licenses granted this year (Australia is among the culprits) would put us on track to double the emissions needed to be consistent with 2030 Paris temperature goals.
It warned that current G20 targets, which no member nation is on track to meet, will deliver a catastrophic temperature rise of at least 2.5C. To ensure a “safe” long-term warming of 1.5C we need a global 42 per cent emissions cut in just seven years. That is, Australia’s current ambitious target will need to be realised world-wide.
But UNEP also said that projected rises in world emissions by 2030 have dropped from 16 per cent in 2015 to 3 per cent this year. Last week Berlin-based Climate Analytics, a reliable monitor of global progress, said we have a 70 per cent chance that 2024 will be a “crucial inflection point” after which emissions will start to fall.
More good news: Australia has been an emissions laggard and a backwater for renewable energy investment, but that looks set to change. Last week climate and energy minister Chris Bowen announced an expanded “Capacity Investment Scheme” designed to turbocharge investment in new clean energy generation and storage. It looks as if it might actually have legs.
Bowen has seen what the Biden administration has achieved through its signature climate law of August 2022, the misnamed Inflation Reduction Act, which turns out to be a potent mechanism for drawing private investment into clean energy.
Under the Act, a projected $369 billion worth of tax breaks, subsidies and grants entice US-owned companies to put their money into wind, solar, batteries and power transmission. It was an instant hit. Within three months of its passage it had drawn $40 billion of private money into clean energy industries – and 7000 jobs.
After a year investment was at $270 billion and climbing fast. As the US Treasury said in a review, such manufacturing investment has been especially telling for struggling, economically disadvantaged communities, where investment in manufacturing jobs offers the biggest bang for the buck.
Japan and Korea have followed suit. The European Union, for decades the world’s renewable energy leader, now has its own $261 billion clean energy investment plan. We’re seeing perhaps the biggest global investment boom ever. Management consultants McKinsey have estimated that over the next five years it will total about $US130 trillion (about $200 trillion Australian).
This is the global backdrop for Chris Bowen’s expansion of the existing Capacity Investment Scheme and the National Energy Transformation Partnership with the states. Aiming as he put it to “supercharge” electricity supply and create a new “reliable, affordable and low-emissions” energy system, tenders will be called every six-months, starting around a year from now.
The CIS, says Bowen, will boost the National Electricity Market by 50 per cent by adding 23 gigawatts of renewable power and 9 GW of instantly-available dispatchable energy from storage devices, mainly batteries.
The expanded investment scheme offers energy supply contracts to successful bidders specifying a revenue ceiling and floor. If a project’s revenue is above the agreed ceiling, the owner will pay the government a percentage of that excess. If revenue is below the floor, the Commonwealth pays the owner. Winners everywhere.
Forefront in Chris Bowen’s mind is COP28’s global stocktake of national actions to phase out fossil fuels. Its other main focus will be financing and managing a “loss and damage fund” for the countries most affected by climate change. Without rich countries like Australia and the US getting their own houses in order, all this will fall in a heap.
Climate wars have crippled us, but now the energy transition is becoming lucrative. Speaking all languages and capable of breaking the most iron-clad of ideologies, money is our last, best hope.