The death of coal: World Bank kicking coal habit but will the world follow?

Still on a semi-sabbatical, however this article is worth noting from The Conversation:

By Colin Hunt

World Bank president Jim Yong Kim recently announced that the Bank would cut coal from its portfolio of investment projects.

New coal powered generation will now receive financial support only in “rare circumstances”. Gas will remain in the Bank’s investment mix but as a transitional fuel. But will this decision change anything?

The World Bank has led international development banks in its embrace of coal over the last five years, according to Oil Change International. The overall portfolios of the major development banks as well as the European Investment Bank and the European Bank for Reconstruction and Development, have been heavily weighted towards fossil fuel development rather than renewables.

The World Bank’s change in focus favouring renewable energy won’t have a great impact on the spending priorities in the near future because its last loan to a coal-fired plant was in 2010. Much larger will be the impact on other lending institutions. A reasonable expectation is that the decision to spurn coal will also permeate the domestic policies of countries continuing to build coal-fired power plants.

The new president Dr Kim has managed to get the no coal policy through the Bank’s board. In the past the strategy has been blocked by China, India, and Saudi Arabia.

Civil society has been pressing for change. No doubt the bank’s board was also influenced by the late 2012 report it commissioned from the Potsdam Institute. This describes what the world would be like if it warmed by 4°C – an almost unanimous prediction by scientists by the end of the century without serious policy changes: “The lack of action on climate change not only risks putting prosperity out of reach of millions of people in the developing world, it threatens to roll back decades of sustainable development.”

Nighttime from space. Only about 30% of households in Sub-Sahara Africa and northern India have electricity and outages are frequent. However solar power is changing that. NOAA

The International Energy Agency might also have been influential in the Bank’s change. The agency is emphasising the need to keep most coal in the ground to avoid catastrophic warming.

Electricity for developing nations

Lack of electricity is the major barrier to global poverty alleviation and the development of private enterprise. The marriage of the Bank’s focus on the poor with the delivery of cost-effective sustainable energy systems is now much more feasible.

While electricity grids are absent in remote areas, off-grid renewable energy systems are now bankable. The cost of solar power in particular has plummeted. The Bank gives the example of the cost of photovoltaic modules falling from US$3.40 per watt in 2008 to US$1.30 in 2011.

The three goals of the World Bank by 2030 are:

• universal access to electricity
• double the rate of improvement in energy efficiency
• double the rate of uptake of renewable energy.

The Bank’s annual present rate of investment in these goals is US$8 billion. This compares with the required annual investment rate for achieving these goals of $US600-800 billion – a doubling or tripling of present total financial flows. However the institution’s role is much greater than indicated by its scale of direct lending.

The Bank also leverages other lenders into the mix and fosters private-public partnerships. It advises electricity utilities on how to apply and raise finance. And it provides advice on reducing fossil fuel subsidies (which put government budgets in the red and deter investment in renewables) and on how tariffs can be set to be economically sustainable and manage demand. Raising awareness of energy efficiency – the least sexy and most under-exploited of initiatives – is also key.

A concentrating solar thermal project at Ouarzazate, a city of 1.5 million in Morocco, will provide 24-hour power. World Bank

The daunting challenges facing developing countries in integrating renewables into the energy mix will be appreciated by Australians who have been following the exciting efforts to pave the way for 100% renewables in this country, such as this report by the Australian Energy Market Operator, and this by the Global Change Institute at University of Queensland.

There are a number of ways in which renewables can contribute to a reliable electricity supply: concentrating solar, geothermal, biomass and hydro. The latter is a key in that is can be readily switched on or off to fill the troughs in supply or the peaks in demand; a reason why investment in hydro power is thought important in developing countries that have untapped water resources. While the social and environmental impacts of large water storages have been well documented, the Bank says it has learned many lessons from past experience.

Many countries do not need development banks to fund their energy investments and some are still investing heavily in coal-fired plants. China is an example. While massive investment in energy efficiency has halved power per unit of GDP in 17 years, the demand for coal will increase. This is due to the idiosyncrasies of the country’s electricity network together with a tripling of demand for energy by 2030.

It is easy to fall into pessimism about the chances of timely transformation of world energy supplies. But the policy shift by the World Bank is another domino fallen. Greater appreciation of the risks of climate inaction, the successful application of renewables, combined with global knowledge transfer, will surely see many more dominoes go down in the near future.

Colin Hunt does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

This article was originally published at The Conversation.
Read the original article.

This too shall pass: Rio Tinto admits climate change real and accepts the need for action

File under “well its about time”.

Where once denial was expected – if not the norm – from the fossil fuel industry, increasingly we are seeing that industry acknowledge the fact that climate change poses a fundamental risk to their operations (and thus profit).

Climate change “skepticism” is fast becoming the preserve of the ideological zealot and fringe conspiracy theorist.

I’ve spent the majority of my professional life in the private sector, and appreciate climate change from a) an ethical perspective and b) as a risk management issue.

Thus my many years of observation taught me industry acceptance was inevitable. Slower than it should be, but without doubt always coming.

The management of most corporations are conservative and risk averse – far more than the cheer leaders of the “free market” would have you believe.

Indeed, I’m incredibly amused by the shallow musings of the likes of the “Institute of Public Affairs” and “free-market think tanks”.

Quite frankly this gaggle of ideologues, apologists for the super-rich and intellectual fringe dwellers seem to know precious little about how the “market’ actually works”.

It’s not perfect, it does not  operate “rationally” and it is not an enabler of human happiness.

It is a mechanism to distribute material and non-material goods. That’s it.

Nothing more. 

Free markets don’t equal free people: just ask the Chinese how easy it is to decouple “free markets” from the ideals and practice of democracy or “free speech”.

And the market can – and does – fail with surprising regularity: form the South Sea Bubble, to “The Great Depression” and “The Global Financial Crisis” (GFC).

Climate change is a product of market failure, a selective blindness to the risk and additional cost burdens of greenhouse emissions. In the same way regulators overlooked the risky of lending practices of banks in the United States (how CDCs fueled the property bubble) lead to the GFC, so it is with carbon emissions.

Carbon emissions have been “off book” – but that does not mean the risk is not real: one merely needs to see the emergent risks in the shrinking Arctic Sea Ice and record high temperatures.

Pretty much most informed commentators and observers saw the demise of fossil fuel industry opposition to mitigation efforts such as the “carbon tax” as inevitable.

[Note to the LNP and Tony Abbott: you are looking increasingly silly aren’t you? You’ve spent a far too much time at IPA events I think, when business generally sees these people as fringe nutters.]

So when the coal miners start stating the case for “urgent action” we are passing a threshold: perhaps too late, perhaps not urgently enough, but it is happening.

One can appreciate coal miners have to steady the nerves of investors (and themselves) by stating “there will always be a place for coal”, but the truth is coal as an energy source is in its sunset years.

And yes, this was also seen as inevitable: even by those companies themselves.

Give it a few decades and it is possible to anticipate the large scale decommissioning of mines and coal powered generators across the globe.

But the “merchants of doubt” achieved what they set out to do: delay the inevitable regulatory reform and their technological obsolescence.

Their demise was both predictable and certain: “our” failure was to (once again) anticipate the ferocity of the fossil fuel lobby’s opposition in what they appreciated was a fight to the death.

And now, in their final years even the coal miners have come to accept their “death” – they are moving from denial and anger to bargaining and acceptance.

“This too shall pass”. 

This from Rio Tinto’s head of coal (via SMH) – note the tacit acceptance of the “carbon tax”;

Climate change is occurring and is largely caused by human activities, miner Rio Tinto’s head of coal in Australia, Bill Champion told a Brisbane conference this morning.

In a speech on sustainable development and mining, Mr Champion said the “scale of the necessary emissions reductions and the need for adaptation, coupled with the world’s increasing requirements for secure, affordable energy, create large challenges which require worldwide attention”. 

Rio Tinto has factored a carbon price into its investment decision-making for the past 10 years, Mr Champion said.

“We support a coordinated global approach to reduce emissions. Until that is in place, as well as after, we recognise that it will be necessary for individual jurisdictions to take actions. [Mike @ WtD: Yes they accept the “carbon tax” that was supposed to end civilization]

“We recognise the value of action on climate change.”We factor into our planning and decision-making, including our choice of investments, the costs and associated risks of emissions and business disruption, as well as the costs and benefits of mitigation and adaptation, and the opportunities created for our business by the move to a low-carbon economy.” 

Mr Champion said coal-use represented about 25 per cent of global greenhouse gas emissions, but there would continue to be demand for coal even under the International Energy Agency’s most aggressive scenarios for action on climate change.

New Queensland mines could make Australian region 7th largest CO2 emitter on the planet

For those who think Australia’s contribution to the global warming problem is minimal – and therefore there is little need to do anything – plans to open new coal mines in Queensland are troubling:

Plans to open up a new Australian “coal export rush” would turn a single Queensland region into the seventh largest contributor of carbon dioxide emissions on the planet, undermining international efforts to keep global warming below 2C, a new report has warned. 

Nine proposed “mega mines” in the Galilee Basin would, at full capacity, result in 705m tonnes of CO2 released into the atmosphere, according to a Greenpeace Australia analysis. This level of emissions would surpass those of all but six nations in the world. By comparison, the UK emitted 549.3 million tonnes of CO2 from all sources in 2011. 

Greenpeace said that the nine mines’ production capacity of 330m tonnes of coal a year for export would represent an “unprecedented” increase in the scale of coal mining in Australia. The mines’ maximum output, primarily aimed at servicing the burgeoning Chinese and Indian markets, would nearly double Australia’s total 2010/11 coal production of 352m tonnes and eclipse its export total of 283m tonnes. 

The Greenpeace report states that the mines will only be able to launch and operate at capacity if global appetite for coal continues to grow strongly. This scenario would in effect nullify an internationally agreed goal to keep the increase in average global temperatures below 2C from pre-industrial levels. 

Greenpeace warns that a growth in coal-fired emissions represented by the nine Queensland mines would be in line with the International Energy Agency’s model of a “catastrophic” 6C rise in temperatures.

I’d be curious to see the calculations behind the claims: but even so this is reflective of the complete disregard the ruling Liberal-National Party under Campbell Newman has for the environment.

After all, this is the same bunch who want to remove the teaching of climate change from schools.

The Greenpeace report is here.

Direct action: stop approval of the Newcastle T4 coal terminal

Time to get boots on the ground and make ourselves heard – sign this petition to stop T4:

The NSW Government will soon decide whether to approve a fourth coal terminal for Newcastle. This terminal (T4) would increase the volume of coal exported from Newcastle from 210 to 330 million tonnes each year. It would also double the dust pollution from coal trains, piles and loaders that people breath in suburbs from the Hunter Valley coal mines to the port.

NSW Planning Minister Brad Hazzard will assess the T4 proposal in coming weeks. Without strong, vocal and sustained opposition from the community, he is likely to recommend they approve it. We need to get onto the three key decision makers right now – Mr Hazard, Member for Newcastle Tim Owen, and Premier Barry O’Farrell. This is our key window of time to persuade them not to approve T4.

Queensland beautiful one day, coal free the next: QLD conservatives against CTAX hike coal mining royalties putting “billions” of projects at risk

From today’s Australian Financial Review: beautiful, just beautiful. :

Coalminers threaten Queensland shutdowns

BHP Billiton, Rio Tinto and other miners are reconsidering their plans in Australia’s biggest coal-producing state after the new conservative Queensland government hiked the coal royalty rate to help drive a record $6.3 billion budget deficit back to surplus.

Premier Campbell Newman’s first budget on Tuesday predicted a bullish rebound in global coal prices and a surge in the state’s biggest export as it sought to raise $1.6 billion over four years by increasing the coal royalty from 10 per cent to 12.5 per cent for coal prices above $100 a tonne and to 15 per cent for coal prices above $150 a tonne.

But angry mining companies said the move, predicted in The Australian Financial Review, would lead to more job losses, mine closures and project cancellations.

Mining entrepreneur Clive Palmer, who is one of the LNP’s biggest donors, said the royalty decision would cost thousands of jobs and “kill” the state’s economy.

“Increased mining royalties on top of widespread sackings is hardly a recipe for growth in this state,” he said. “It is a recipe for disaster putting us on an uneven footing with the rest of the world.”

Recall the Campbell Newman, the Liberal-National Party Premier investigated the possibility of joining a High Court Challenge (The Australian, May 8 2012) to the Gillard Governments “carbon tax” but then decided it would most likely fail:

A HIGH Court challenge against the carbon tax will fail and Queensland won’t be part of it, Premier Campbell Newman says.

Mr Newman says he’s received legal advice not to join any challenge to the federal government’s tax on big polluters.

“We’re not going to waste taxpayers’ money given it indicates that, sadly, the federal drafters of this have done a good job of making it very bullet-proof,” Mr Newman told 2GB radio.

“I’ve also talked to at least one other state leader about this, and they’ve had similar advice so we’re not going to waste the taxpayers’ money.

“But I wish I could.”

He described the carbon tax as “economic madness”, saying he would have joined the legal action “if it had been 50/50”.

He said the tax would compromise Queensland’s ability to process resources locally.

“That’ll all happen overseas.”

Ahhhhh Queensland, beautiful one day: coal free the next… how’s the economic madness going Campbell?

Now if I may…

Recall, some time ago I said climate sceptics and conservatives were due for a lesson in realpolitk:

The “tax” may be tweaked or rebranded by successive governments, but its here to stay.

The coming disappointments

The denial movement is about to receive some harsh lessons in realpolitk as they grapple with two major disappointments.

The first disappointment: business opposition to the carbon tax will melt away within six months as it did in New Zealand and Europe (see above). They will lose allies and supporters (except for some very loud and eccentric billionaires).

The second disappointment: the tax is here to stay, regardless of who is in power.

Now this is where Australian politics is set to get messy.

As I said: a tax on fossil fuel industires is here to stay.

Inadvertantly, the Queensland LNP is helping the environment.

I wonder what Jo Nova, Alan Jones and the Galileo Movement will make of the Newman’s actions?

Can we expect rallies across the country?

Thundering opinion pieces from Andrew Bolt?

No?

I can hear Tony Abbott in Canberra right now….

“Neeeeeeeeeeeeeeeeeeeeeeeeeeeewman!”

I am all kinds of amused. 

Image of the day: open cut lignite coal mine, Anglesea Victoria

One of Victoria’s open cut coal mines, located in Anglesea along the states majestic Great Ocean Road. The coal feeds the Anglesea Power Station, which in turn powers the Port Henry aluminum smelter.

The power station generates around 1.21 million tones of GHGs:

 Source: Google Maps

 

Quote of the day: “their business model is destroying the planet”

Hat tip 350orbust.com:

Unelected and lacking accountability, the fossil fuel industry needs to be tamed. We accept an industrial civilisation is not possible without energy: but we have the ability to change the business model and alternative ways to meet those needs.

We are not against civilisation in urging the world to phase out fossil fuels: sustainable energy is a precondition to ensure its survival.

The maths: the must read article by McKibben, the implications we must consider

Bill McKibben’s powerful Rolling Stone article is currently being pinged around Twitter.

It is essential reading: powerful, insightful, reasoned and passionate.

I implore you to read it and pass it around:

When we think about global warming at all, the arguments tend to be ideological, theological and economic. But to grasp the seriousness of our predicament, you just need to do a little math. For the past year, an easy and powerful bit of arithmetical analysis first published by financial analysts in the U.K. has been making the rounds of environmental conferences and journals, but it hasn’t yet broken through to the larger public. This analysis upends most of the conventional political thinking about climate change. And it allows us to understand our precarious – our almost-but-not-quite-finally hopeless – position with three simple numbers.

McKibben highlights what he calls the “three most important” numbers you did to know.

Firstly, the so called “2 degree safe limit”:

The accord did contain one important number, however. In Paragraph 1, it formally recognized “the scientific view that the increase in global temperature should be below two degrees Celsius.” And in the very next paragraph, it declared that “we agree that deep cuts in global emissions are required… so as to hold the increase in global temperature below two degrees Celsius.” By insisting on two degrees – about 3.6 degrees Fahrenheit – the accord ratified positions taken earlier in 2009 by the G8, and the so-called Major Economies Forum. It was as conventional as conventional wisdom gets.

To maintain global temperatures under the “safe level” we need to restrict the amount of carbon we pump into the atmosphere – no more than 575 gigatons:

Scientists estimate that humans can pour roughly 565 more gigatons of carbon dioxide into the atmosphere by midcentury and still have some reasonable hope of staying below two degrees. (“Reasonable,” in this case, means four chances in five, or somewhat worse odds than playing Russian roulette with a six-shooter.)

However, there are close to 3000 gigatons worth carbon locked up in the available reserves of fossil fuels:

This number is the scariest of all – one that, for the first time, meshes the political and scientific dimensions of our dilemma. It was highlighted last summer by the Carbon Tracker Initiative, a team of London financial analysts and environmentalists who published a report in an effort to educate investors about the possible risks that climate change poses to their stock portfolios. The number describes the amount of carbon already contained in the proven coal and oil and gas reserves of the fossil-fuel companies, and the countries (think Venezuela or Kuwait) that act like fossil-fuel companies. In short, it’s the fossil fuel we’re currently planning to burn. And the key point is that this new number – 2,795 – is higher than 565. Five times higher.

And that the economic imperatives and self interest of fossil fuel companies will drive us beyond the 575 gt:

If you told Exxon or Lukoil that, in order to avoid wrecking the climate, they couldn’t pump out their reserves, the value of their companies would plummet. John Fullerton, a former managing director at JP Morgan who now runs the Capital Institute, calculates that at today’s market value, those 2,795 gigatons of carbon emissions are worth about $27 trillion. Which is to say, if you paid attention to the scientists and kept 80 percent of it underground, you’d be writing off $20 trillion in assets. The numbers aren’t exact, of course, but that carbon bubble makes the housing bubble look small by comparison. It won’t necessarily burst – we might well burn all that carbon, in which case investors will do fine. But if we do, the planet will crater. You can have a healthy fossil-fuel balance sheet, or a relatively healthy planet – but now that we know the numbers, it looks like you can’t have both. Do the math: 2,795 is five times 565. That’s how the story ends.

As I tried to say, with far less eloquence than McKibben we are locking in the March of folly. There is much to say and debate about how to respond to the issues outlined in the article.

Carbon 101 from the Climate Institute

From Tim over at New Anthropocene Carbon 101 and narrated by head of Australian Football League.

It explains the basics to people not familiar with the science.

Locking in the march of folly: of herding, theories about greater fools and Australia’s coal rush (part 2)

March of folly redux

The end of the coal bubble

We are at the top of the peak for fossil fuel extraction and as a source of energy: coal included.

Prices may continue to rise for a decade or more as demand for energy intensifies, but this is nothing more than speculative bubble that will spectacularly collapse.

How do we know this?

Apart from diminishing reserves the mother of all market corrections is coming: the climate is changing faster than anticipated.

Picture the world in but three decades with an additional 2c warming, a future in which the current heat wave devastating North America will be regarded as a mild summer.

In this scenario, coal prices will slam into the reality of climate change experienced by billions and collapse. Coal’s one advantage, the perception it is cheap and plentiful, will be seen more as a curse than a boon.

In this scenario the state of coal reserves will not matter becomes irrelevant. There is little doubt climate change will generate a range of policy initiatives to quickly – desperately – phase out coal and fossil fuel usage.

Countries will abandon coal as part of a massive mobilisation endeavor to mitigate rising temperatures. Treaties will come into place to slow and halt the extraction of coal. Billions of funding will pour into alternative sources of energy.

And if market friendly mechanisms fail to spur countries to switch from coal to renewable sources, we can expect economic sanctions against countries refusing to cease coal production.

In years to come, those soon to be opened coal mines and their supporting infrastructure will be seen as nothing more than monuments to folly.

The greater fool theory at play: coals future is limited, but the rush to exploit goes on

Expanding coal production is like betting your future on the tobacco industry.

Perhaps you might choose to ignore the health risks, the suffering of those with cancer or strain on the public funds for the short term.

But ultimately reality catches up.

The IEA has warned we are “locking in” dangerous climate change by betting on fossil fuels as a future source of energy:

Yet, despite intensifying warnings from scientists over the past two decades, the new infrastructure even now being built is constructed along the same lines as the old, which means that there is a “lock-in” effect – high-carbon infrastructure built today or in the next five years will contribute as much to the stock of emissions in the atmosphere as previous generations.

We seeing is the last throw of the profit-seeking dice: “Hurray! Dig it up before we can’t sell it any more!”

Because for the next 10 years or so there will be enough greater fools willing to dig up coal and sell it. But that too will have to stop. It’s inevitable.

But this will be a problem for the future, and is in no way reflected in next week’s opinion poll or babbling anxieties and concerns of the last market focus group.

So where does this leave us?

Locked into the march of folly.

History is unkind to fools

Our political and business elites have chosen to not only sacrifice their interests, but a liveable climate.

Gillian King at the blog “Thisness of that” writes perceptively about that failure. Inaction is not the fault of scientists – they’ve simply provided information – but with politicians:

What more can climate scientists do and say? They conduct the research and publish the facts. Their institutions have prominent websites about climate change (CSIRO, BOM, PIK, Met Office, NASA, NOAA, and more) and individual scientists have published books, websites and blogs aimed at general audiences…

Let’s stop pretending that political failure to act is the fault of scientists. It’s not. It’s the fault of politicians who choose not to know, choose not to lead, choose not to educate their constituencies. 

As I’ve stated many times, the problem is not that of our leaders are suffering form a case of information deficit.

The most privileged members of our society – politicians, business leaders, sections of the media and yes, even some in academia – have consciously and willingly ignored the issue.

Here’s a fact: they have all the data, projections and information at their fingertips. They have the means to influence the debate and the ability to implement policies that address climate change.

But a choice has been made; to ignore, to obfuscate, to deny and to pass the problem onto future generations.

One only has to look at the antics of the Australian leader of the opposition, Tony Abbott to see the choices our elites our making.

Abbott is currently touring Australia, popping up in supermarkets and fish shops claiming Australia’s very modest attempt at climate change mitigation (the so called carbon tax) will be the ruin of us all and promising to “axe the tax” the moment he gets into office:

 

Is it possible for the “climate change debate” in Australia to become even more insipid?

Here’s a suggestion Mr Abbott: have a look at the 40,000 local temperature records that have been broken in the USA this year. Or perhaps the flooding that has displaced millions in India:

 

That’s what disaster looks like Tony.

Believe me; paying a few extra cents for my groceries seems a good trade off compared to the alternatives.

With that in mind, I cannot but help ask “Have men like Abbott no shame?”

History is unkind to fools, no matter how clever or successful they are in the short term. The passage of time and the unfolding of events will inevitably showcase the failings and poor decision making of elites who have sacrificed not only their interests, but those they claim to lead, in return for short term gains.

Across a broad spectrum of politics, business and the media we already recognise just who the fools are.

Hindsight will merely confirm.

We already know their names.