Overcoming the fear of the unknown

Today we're running articles from two contrasting perspectives on the role of gas in reducing Australia's carbon emissions: Matthew Wright and Tony Wood. While the two of them are extremely different in approach and background, they both agree that conventional gas-fired power generation is too carbon intensive to meet our goal for a safe climate. We ultimately need sources of power that generate zero emissions or pretty close to it. That's the view of just about any decent climate and energy modeller if you want a reasonable chance of containing global temperature rise below 3 degrees Celsius, let alone 2 degrees.

The argument is then really about how fast we can achieve this wholesale decarbonisation of electricity.

For many readers Matthew Wright can come across as extremely polarising, but there is a clinical, calculating, and highly rational underpinning to his perspective. He knows that, at their core, companies' actions are driven by obligations to shareholders for profit, not societal goodwill.

If you have spent any time following the lobbying around government greenhouse policy, you'll know that the positions of most corporations can be mapped almost perfectly to the major strategic assets that they own. Some companies are more willing to work towards a constructive compromise than others. But as a general rule, expect everything they say to be largely in line with their future profitability. Matthew Wright is hardly a radical in this perspective; he shares it with the hero of free markets, Economics Nobel Laureate Milton Friedman.  

So, for Wright, if companies own gas power plants and gas fields worth billions of dollars, that have decades of useful life left in them, they are hardly going to happily roll over to allow renewables to takeover in 20 years time.  This is just logical common sense. So for Wright, even if gas is lower emissions than coal, a policy that supports a huge injection of investment into new, very long-lived gas assets is just creating a millstone around our necks.

On the other hand, you have people including Tony Wood trying to find a way forward that is considered politically feasible today, and will at least get us moving in the right direction. While Wright might have a reasonable case, there is no way you can persuade most politicians in Australia to sign-up to 100 per cent renewables in 2040, let alone 2020. Sure it's an exciting and highly tangible idea that can get people inspired, but important politicians, public servants and business leaders just don't think it's possible.  Indeed some of them still have doubts about whether we can even achieve the 20 per cent by 2020 Renewable Energy Target.

So the idea that you could substantially reduce emissions by using gas-fired turbines already providing large and reliable quantities of power equivalent to a coal-fired power station is very helpful in reassuring doubters (or countering them). Gas is like a wonderful antidote to those who suggest we'll condemn society to dark, cold caves by putting a cap on carbon emissions.  

It may seem incredible but some of us can remember how even gas was called into question as a viable and reliable source of electricity. Those opposed to action on climate change used to suggest that we couldn't put any kind of cost or restriction on carbon emissions until coal with carbon capture and storage (CCS) was developed. According to these people, gas was at imminent risk of running out, and was like your ‘mother's best china', only to be used for special occasions, not substitute for coal. These arguments were complete rubbish, and ignored the reality that there are plenty of other options for reducing emissions other than use of gas, let alone CCS. Yet these arguments held sway over government policy not all that long ago. So while gas might seem like less than the real deal, it was bloody difficult to get this far.

Introducing a carbon price, even one that will likely fall to a measly $15 per tonne of CO₂ in 2015, has been a difficult and spiteful battle. What's more this battle hasn't yet been won. Right now we're stuck in rut caused by the fear of the unknown. Opponents of carbon controls can make up any old thing about how the carbon price will impact Australia and be taken seriously by many voters. Only experience can inoculate people against such fear campaigns, just as occurred with the Goods and Services Tax (GST). So even if the carbon price is too small to drive a switch to gas, let alone renewables, it's most useful role may be in removing the fear of the unknown. 

It is the fear of the unknown which is the greatest barrier to progress. Until it is resolved there will be no wholesale replacement of coal with gas or renewable-fuelled electricity.