Thinking beyond solar panels and nuclear reactors

Addressing carbon emissions is about more than the headline-grabbing stuff of solar panels, wind turbines, nuclear power and clean coal. And dealing with it will require a price on carbon.

Often the pages of this website as well as the general media can become a bit like the wicked witch from Snow White looking into their mirror and obsessing about who is the fairest electricity generation technology of them all.

Yet while it didn’t get much publicity, the release of Australia’s latest emissions inventory illustrates that addressing carbon emissions is about more than the headline-grabbing stuff of solar panels, wind turbines, nuclear power, and clean coal.

This week’s charts of the week illustrate that the growth in Australia’s emissions in very recent times is predominantly coming from the mining sector with emissions from electricity and other sectors stagnating. Yet there’s been relatively little discussion about how mining might employ improvements in technology and practices to reduce their emissions. Also renewable energy support policies will do little to address the rapid growth in mining's emissions.

The chart below illustrates that while electricity is clearly the big problem, its growth in emissions has recently been reversed. Also the significant growth in transport emissions over the 1990s has stagnated since 2003-04 as high oil prices began to bite. And while agriculture is a big source of emissions, the levels are noticeably lower than in 1990, and this is also the case with waste emissions.

Change in emissions by sector source since 1990

Source: Department of Climate Change and Energy Efficiency

The chart below then illustrates which economic sectors are behind the growth in Australia’s emissions.

Mining is clearly out in front, experiencing very significant growth since 1990 all the way to today. Services have also grown rapidly but with a dip more recently. The residential sector which receives inordinate policy focus, has grown far slower than the other two and its emissions also reduced last year. Manufacturing emissions have pretty much stagnated over the past decade.

Percentage change in combined direct and indirect greenhouse gas emissions by economic sector relative to 1990

Source: Department of Climate Change and Energy Efficiency

Within the mining sector the predominant sources of emissions are the inadvertent releases of methane and carbon dioxide known as "fugitive" emissions from export-oriented coal mines and extraction of oil and gas bound for international markets. The other large chunk is direct combustion of fossil fuels, with relatively minor emissions from consumption of electricity.

A feed-in tariff or renewable energy targets will do relatively little to address the two major sources of emissions from mining, which will instead be best addressed through a price on carbon. 

Proportional break-down on emission sources for mining – 2009/10

Source: Department of Climate Change and Energy Efficiency

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles