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Energy Emergency – Energy Transition:
Global Union Roundtable
10-12 October 2012, New York
Building consensus on the way forward - not feedingthe enemy
Peter Colley
National Research Director
CFMEU Mining & Energy
I primarily represent coal miners in Australia. We have members in other parts of mining, and also in power stations – but mostly in coal mining. Australia is the largest exporter of coal in the world and its exports are growing rapidly in response to demand from rapidly industrialisingnations in Asia.
We like to think we are the greenest coal mining union in the world! We fully accept the science of climate change, and agree that the world needs to reduce its emissions to a fraction of what they are now. In Australia, that means we have endorsed substantial targets for the deployment of renewable energy, and we have strongly supported the introduction of carbon pricing and emissions trading.
But this does NOT mean we have agreed to the phasing out of our industry! What it means is that we have accepted that the future of our industry is contingent on reducing the emissions from coal use.
That’s a key distinction for us, and I think for many union people here. When some people talk about Just Transition, they mean shutting down industries and relocating the affected workers to other industries. When I and many others from heavy industry talk about Just Transition we mean that our industries should be cleaned up, not shut down.
There are some green groups trying to shut down the coal industry in Australia. Only some – not all or most. In the Hunter Valley, one of our main mining regions, the land is shared with vineyards, horse-racing studs and tourism. The green groups say that mining jobs can be shifted to these other industries. The first problem with that is that those other industries have their own sustainability problems – vineyards rely on alcohol consumption, horse-racing relies on gambling, and tourism relies on increasing travel. The second problem is that those industries are low technology, low value-added industries. They pay below-average wages. By comparison coal mining is a high value-added industry, with between half a million and a million dollars of value added per worker per year. So while coal mining jobs pay over $120,000 per year, the alternate industries pay around $40,000 per year.
You can see why repeated local opinion polls show the Hunter Valley community is keen on retaining the coal industry!
Three issues of fact and one of strategy
I want to address three key issues of fact and one issue of strategy today. The issues of fact are with respect to (a) the importance of CCS – carbon capture and storage – to not just energy production but to major heavy industry; (b) climate change policies in Australia – their effectiveness; and (c) the issue of coal exports. The issue of strategy I will address is building consensus rather than feeding polarisation in climate politics.
Carbon Capture and Storage
Or it can be called CCRS – carbon capture, re-use and storage - because some of the options are for re-use rather than permanent waste storage.
The IPCC 4th Assessment Report says that over 55% of global warming comes from fossil fuels. But it also says that power generation – from oil and gas as well as coal – accounts for one quarter of global warming emissions.
So even if energy industries shifted entirely to renewables it would not “fix” the global warming problem. Half of all emissions come from industry, agriculture and forestry. And another 13% or so from transport.
We should not delude ourselves that the energy production sector alone is the major barrier to a global warming solution.
CCS was endorsed by a special report of the IPCC in 2008 as a key set of technologies for fighting global warming. Also in 2008 the peak scientific bodies - the Academies of Science - of the then G8+5 nations endorsed CCS as an essential technology. Not just for power generation but for industrial processes. The International Energy Agency has repeatedly identified CCS as a key component of a least-cost strategy for achieving major emissions reductions.
Nevertheless we get green groups like Greenpeace and the Australian Greens in our national parliament dismissing CCS as a fantasy and irrelevant. This is an example of the “picking and choosing of the science you want to believe” for which we rightly we criticise climate sceptics. But the fault and bad practice is not just with the sceptics.
The vast number of gas-fired power stations that are under construction in the USA, Japan, China and elsewhere will need CCS if they are to reduce emissions by the 80 or 90% that scientists urge. It’s not just a coal issue.
Heavy industry will need CCS to be commercialised and readily available. If it is not done for power generation, it will be that much harder for other heavy industry to achieve it. Steelmaking, petrochemicals, concrete, pulp and paper and even much food processing all have “cooking” processes that release carbon dioxide.
If we don’t make CCS work than we can no longer have the heavy industry on which modern civilisation depends. Again, CCS is not just a coal issue.
Another important rationale for CCS is that it should be attached to the use of biomassin power generation so that we can actually take CO2 out of the atmosphere. Biomass with CCS will not just be emission neutral but emission negative.
Especially given the lack of progress in emissions-reduction, it is apparent that once consensus for strong action is achieved, we will have to go beyond emissions reduction to reclaiming CO2 from the atmosphere.
Having said that, it is clear that CCS is not getting the dollars it needs to be commercialised. Progress is terribly slow. There are two related problems here. The first is that the power generators usually have low margins and so can’t afford to invest in the First-Of-A-Kind technology that is inevitably far more expensive than off-the-shelf technologies. The second is that the continuing fall-out from the Global Financial Crisis means that even those who can afford it – the fossil fuel multinational corporations – won’t do it as they say it’s not core business. They say they extract the stuff; they don’t use it.
The same GFC issue means that the public sector doesn’t want to fund it either, though they say they do. Each new CCS power station will cost around $5 billion. And while costly renewable technologies have their product champions that ensure that billions of taxpayer and consumer dollars are directed to renewable energy, there is no industry or community group really pushing CCS.
Then there is the conundrum that CCS is a major coordinated infrastructure problem – one that governments increasingly lack both the capacity and the vision to address. CCS power stations require pipeline networks and storage sites or they won’t get built. But pipelines and storage sites need multiple customers that will guarantee sales.
Each new gas-fired power station and gas pipeline is an incremental addition to an existing mature industry. But CCS is a whole new industry – it can’t be created incrementally from zero.
There is an analogy here with the early days of the electricity supply industry. The initial private sector providers back in the 1920s couldn’t reliably develop comprehensive supply networks and ensure supply. It was an immature industry. So governments had to step in and develop the industry by a mixture of public ownership or highly-regulated private suppliers.
That the electricity supply industry is shifting from being a mature industry to being an immature one, with riskier new technologies being introduced, and earlier write-off of existing assets, means that there is a renewed rationale for public sector involvement in energy. The private sector prides itself on dealing well with risk – but only well-known risks and incremental risk. When things get very risky it is left to the public sector to manage the problem in the public or national interest.
Carbon pricing does make CCS more commercially viable. But carbon pricing is being introduced at low levels in order to minimise economic shocks. So it won’t drive CCS deployment for a long time.
Australian carbon pricing
Australia has had a price on carbon - $23 per tonne – since 1 July 2012. And the sky hasn’t fallen in despite the doomsday predictions of many.
Carbon pricing (and other market mechanisms) is not a solution by itself, but it is a critical component in shifting communities and industries along the path to understanding that putting waste emissions into the atmosphere for free is no longer a sustainable strategy.
But while the economic cost of introducing carbon pricing has been affordable as was predicted by its supporters, the political cost has been high.
It can be said that the climate change and carbon pricing issues has cost Australia two Prime Ministers and one Opposition Leader. And it is quite possible it will cost a third Prime Minister and the fall of the social-democratic Labor Government.
Since 2007 when the majority of the public supported action on climate change, the climate sceptics – mostly older people - have grown rapidly to become a sizable and very vocal minority. The mass media – we have Murdoch’s News Corporation controlling 70% of our print media in Australia – in conjunction with the neoconservative Opposition parties have whipped up hysteria about carbon pricing crippling the economy and incomes.
After three years of trying including some backflips, the Labor Government got a carbon pricing scheme legislated in late 2011 and it came into effect from 1 July 2012. From the time it committed to its new package its support plummeted. It would not only have lost an early election, it would have lost three quarters of its members of parliament.
The opinion polls have come back since then – the Labor Party is still lacking majority support but it is no longer facing a wipe-out. The federal election isn’t due until the end of 2013 and we are hopeful that most people will have gotten used to carbon pricing by then and it will no longer be electoral poison. But we have a long way to go.
There is a lesson for unions in this. The CFMEU led the debate among unions to support carbon pricing and renewable energy targets. Splits between white and blue collar unions were possible, as were splits among blue collar unions. We managed to keep everybody “in the boat”.
And because we had been educating our members about climate change since the early 1990s, we had membership support. But many other blue collar unions, and other parts of the CFMEU – in the construction industry – had not educated their members and so faced considerable backlash from members who were exposed to the climate sceptic juggernaut in the media.
The message we have developed with our members is that climate change is real and that to secure our future our industry has to be cleaned up. Coal has a future only if it becomes low-emission. That message works!
Coal exports
The CFMEU has been able to have the position it has in part because the Australian coal industry is not tied to the domestic market. While over 75% of power generation is from black and brown coal, only about 20% of coal production is for the domestic market.
So while the domestic market for coal has declined simply due to carbon pricing uncertainty (rather than actual carbon pricing!) the coal mining industry overall has remained buoyant due to international market demand for coal.
The background paperfor this event canvas the idea that Australia is exporting fossil fuel emissions, and some green groups have called for coal exports to be capped and phased down. Which is a problem for Australia as it is our second biggest export industry after iron ore!
But I would also argue that such a position is wrong under international climate law and should be wrong, and that adopting such a position is at best patronising and arguably imperialistic.
Under the UN Framework Conventionon Climate Change, each nation is responsible for the emissions that occur within its borders. So Japan is responsible for the emissions from Australian coal that it burns in its power stations, just as the US is responsible for the emissions from its cars and trucks that burn oil from the Middle East. Conversely, Norway is not responsible for the emissions from North Sea oil that is burnt throughout Europe – the nations that use it are.
Further, to suggest that Australia should not export fuels that are in demand by other nations is to suggest that Australia impose its political views on other nations. That we should force those other nations to change their energy use whether or not they agree. That’s imperialism as conventionally defined.
That idea also ignores geo-political reality. With rapidly rising energy demand in the developing world, any deliberate effort by a very small developed nation on the tip of Asia – which is what Australia is – to restrict energy supplies will escalate political and military tensions in the region.
All of that said, it is obviously problematic to be exporting a product that contributes to climate change. The business case might be strong, but the ethical case isn’t. Which is why we think the Australian coal industry should be doing a lot more than it is currently doing to solve the emissions problem through CCS. We should be exporting an energy source that can be used in a low emission manner.
If Iwas to be at my most grim about it, I think the Australian and other coal industries are digging their own grave if they do not invest in their own future by developing CCS.
The strategic issue – building consensus rather than polarisation
I don’t have a quick fix here!
I think the effort put into scaring people into supporting strong action on climate change has proved counter-productive. Efforts to tell people that they have no choice have back-fired.
Tactics like the global carbon budget that decrees we simply must cut emissions or lock in catastrophic warming have the hallmarks of the economic rationalism of the 1980s – the “There Is No Alternative” (or TINA) politics. The victories that the economic rationalists had back then were because it was the dominant discourse that suited the elites. But it caused vigorous opposition among the Left and other progressives, who said that we DO have a choice.
In a liberal democracy, people who are told they have no choice will go looking for groups and politicians that will give them one. And when the alternative actually suits the powerful elites – in the climate change case just about all heavy industry and road transport as well as the fossil fuel corporations – it will get plenty of promotion.
So those climate campaigners who are saying we have no choice but to act are doing so from a position of weakness and are strengthening their opposition.
Similarly, I think tactics to create and target enemies are counter-productive. Scientist James Hansen has famously labelled coal-fired power stations as death factories. Trains that carry coal to power stations are labelled as death trains, in language deliberately reminiscent of the trains that carried Jews to death camps in World War II.
That sort of language, which appears to me to be typical of Tea Party-style political debate in the US, is one reason why we have political gridlock on climate politics in the US, and also in international climate negotiations. That language smears not just some large corporations (who deserve it), but entire industries and communities. It is virtually guaranteed to incite substantial opposition.
International climate negotiations are going nowhere fast because the central tenet of the negotiations is that addressing climate change will case economic pain, and so the negotiations are all about who has to share the pain and when. Naturally enough, every party to the negotiations thinks that other parties should bear more of the pain.
The way forward in my view will be built on seeking consensus – on getting an overwhelming majority “inside the tent” or “on the boat”. Rather the creating and targeting enemies, we need to work around them.
Targeting fossil fuel corporations rather than targeting fossil fuel industries has the merit of targeting the commercial interests rather than the communities involved. That said, openly targeting some of the biggest, meanest, baddest corporations in the world may not be smart tactics if you are starting from a position of weakness. You are inciting very powerful enemies to devote their immense capabilities to destroy you. Until you are in a position of significant power, I would urge trying to work around the fossil fuel corporations rather than tackling them head-on.