Abbott's kinda right - coal was 'good for humanity'

If Prime Minister Tony Abbott wanted to let everyone know that in his heart of hearts he still thinks climate change is crap, he sure knows how to go about it.

Attending the opening of the Caval Ridge coking coal mine yesterday, he said:

"Coal is good for humanity, coal is good for prosperity, coal is an essential part of our economic future, here in Australia, and right around the world." 

This is not the first time he's lauded the virtues of coal and suggested we should dig it up without too much concern for global warming. Just a few months ago he said the biggest fundamental problem with the carbon tax was that:

"…it said to the wider world, that a commodity which ... is our biggest single export [coal], somehow should be left in the ground and not sold. Well really and truly, I can think of few things more damaging to our future."

In making these comments he didn't feel compelled to suggest that technology to capture and store the CO2 emissions from coal-burning was just around the corner.

So, Tony Abbott either has absolutely no understanding of what's required to keep global warming to manageable levels, or simply couldn't care less about it.

However if you want to do something more useful than get your knickers in a twist, it's worth trying to appreciate where Abbott is coming from rather than just branding him as evil. 

Abbott made another comment which, I suspect, goes to the deep philosophical heart of what his government believes:

"Energy is what sustains our prosperity, and coal is the world's principal energy source and it will be for many decades to come."  

This idea of coal as the fuel of prosperity isn't just something Abbott dreamt up because he wanted to irritate greenies. It is built on strong historical evidence.

Obviously the industrial revolution first took root in England's exploitation of coal and the steam engine.

But there is also an Australian angle. Back in the 1960s Australia's commodities – and, critically, coal – helped rebuild Japan from the ashes of World War II into an industrial giant. They then did the same for South Korea and Taiwan. The transition of these economies from abject poverty to well-off, developed economies is known as the 'Asian Miracle'. It also underpinned the development of some of Australia's largest and most globally-oriented corporations listed in the ASX 200, such as BHP-Billiton and Rio Tinto among others.

China was next off the rank but with a far, far bigger population. And then the plan is for India to keep the mining export revenue flowing.

When Tony Abbott spruiks the idea of Australia as an "energy superpower" he is deadly serious. Indeed this stretches even further back to former Prime Minister John Howard who said back in 2006: "Australia has a massive opportunity to increase its share of global energy trade ... We have the makings of an energy superpower."

It's important to note that it's not just the Coalition that subscribes to this vision. Martin Ferguson, energy minister under the prior Labor Government, is as strong a believer of this vision as anyone in the Liberal Party. In fact, this vision permeates economic thinking among a range of Australia's elite.

Environment Minister Greg Hunt hit the nail on the head in an interview on ABC Radio today when he said there were two enormous problems facing the world that were inextricably linked:

1) We need to contain global warming;

2) But we must also bring hundreds of millions of people out of poverty by expanding access to energy.

Those concerned about global warming will get precisely nowhere politically unless they can also convincingly explain how we'll address point 2 at the same time.

Thankfully, the International Energy Agency (a global quasi-government body tasked with thinking about and helping co-ordinate how the world manages its energy needs) has extensively studied how you might resolve these two challenges simultaneously. Its view is that it can indeed be done. 

Interestingly. those who suggest – like the Prime Minister – that coal will be principal source of energy for decades to come, almost always cite the International Energy Agency's central case projections of coal use to support their claims. It's as if the forecasts from the IEA represent some unalterable path predetermined by God.

Oddly, they seem to miss that the IEA makes it very clear that such a 'business as usual' path should and can be avoided.

The IEA's executive director, Maria van der Hoeven, said in 2014 that a “radical change of course is long overdue”. And the IEA's chief economist, Fatih Birol said while their central case foresaw massive expansion of fossil fuel use and 4 degrees of global warming, “it is presented as a reason to raise our ambitions to meet the 2°C target rather than as an excuse to lower our expectations”.

In its publication Energy Technology Perspectives – 2014, the IEA dedicated a specific section to analysing how India could dramatically expand access and use of energy while containing emissions. The analysis involved power generation increasing four-fold by 2050, even as the contribution from fossil fuels fell from 80 per cent today to 25 per cent. Renewables were projected to generate 40 per cent of electricity, while the share from coal plummets to less than 20 per cent. 

And just last night the IEA made a further contribution to this debate, releasing a report on how sub-Saharan Africa could expand access to energy to allow its people a better way of life. This analysis sees coal production expanding but also sees renewables representing nearly 45 per cent of total power generating capacity, even as total power generation capacity quadruples.

If Abbott was concerned about past history he is indeed right that coal has been “good for prosperity”, but that doesn't really apply to the future.