Rational climate and energy policy

Rationality is supposedly back in vogue for climate and energy policy. The first step in rational policy-making should be an honest assessment of the problem, yet this remains anathema to the Australian political and corporate incumbency.

Climate and energy are inextricably linked, but the priority is to recognise that human-induced climate change is happening faster and more extensively than is being acknowledged. Dangerous impacts are already occurring at the current 1-degree temperature increase relative to pre-industrial levels. 

The Intergovernmental Panel on Climate Change conclusions, on which global climate policy is based, are important, but they are inherently conservative. In particular, they mention, but do not quantify, the "fat-tail" risks of climate warming – non-linear, positive feedback "tipping points" where the climate jumps from one stable state to another, with potentially catastrophic implications for humanity. 

Evidence suggests this is now happening. For example: the slowing of the Atlantic thermohaline conveyor which warms Europe, as a result of accelerating melt of the Greenland ice sheet; rapid thinning of Arctic sea-ice; accelerating Arctic permafrost melt and methane release; break up of Antarctic ice shelves compounding sea level rise; declining efficiency of carbon sinks such as the Amazon rain forests. Some West Antarctic ice shelves are now thought to be in a state of unstoppable melt, possibly leading to a sea level rise of some metres this century. Once these non-linear changes take hold, they are irreversible, yet our inaction risks locking them in today. 

The social disruption and economic consequences would be devastating, leading to extensive forced migration and economic collapse, potentially making the planet ungovernable and threatening the thin veneer of civilisation. The refugee crisis engulfing Europe is fundamentally climate change driven and a precursor of greater conflict ahead, absent rapid action.  


Current greenhouse emissions trajectories will lead to 4 degrees Celsius warming before 2100. Political commitments to reduce emissions, in advance of the current Paris climate meeting, still lead to warming of 3 degrees or more, implying a substantial reduction in global population. Even with immediate action, the official target, of less than 2 degrees is likely to be exceeded, probably halting population growth, forcing fundamental change on society and the economic system.  

The UNFCCC/IPCC have now confirmed that the 2-degree limit is too high and options should be kept open to limit the increase to 1.5 degrees, an impossible task unless there is agreement on far faster global emission reductions, with the emergence of technologies enabling rapid drawdown of carbon already in the atmosphere.

The carbon budget of 20 per cent of fossil-fuel reserves which can be consumed to have a 66 per cent chance of staying below 2 degrees, reduces to zero if the probability of success is increased to 90 per cent, in itself not good odds for the survival of much of humanity. Yet government, business and investors still encourage fossil fuel investment, locking-in potentially catastrophic outcomes and laying the basis for widespread poverty, while proposed antidotes such as carbon capture and storage are unlikely to be available at the scale, or in the time, required.  

Obviously we are not going to stop fossil-fuel consumption immediately, but sensible risk management demands that we structure our response to avoid these worst-case outcomes.

In this context, "the strong moral case for coal" advanced by Energy Minister Josh Frydenberg does not pass scrutiny. India, like Australia, is already disproportionately hit by climate extremes. If India follows a coal development path, massive poverty will be created not alleviated as these extremes intensify, ensuring the world far exceeds the 2-degree limit, with disastrous consequences.   

On the other hand India is ideally suited to leap-frog coal, moving straight to lower-carbon alternatives, primarily renewables, gas and nuclear. None of this will be easy given the enormous problem of scale, however there is little choice. The moral case is to help India take that low-emission path, not to visit poverty upon them by selfishly propping up our dying coal industry, in the process seriously damaging the economy with wasted investment which, inter alia, seriously undermines our agricultural productivity. New coal projects such as the Galilee Basin are large enough to make it impossible to contain dangerous climate change. 

It is no longer possible to simultaneously meet the 2-degree temperature limit, and to expand the use of fossil fuels, if catastrophic outcomes are to be avoided. We have left the transition to a low-carbon world too late to meet both objectives. The rational priority must be to stay below the temperature limit, which implies far more extensive and rapid change to policy, business models, and social behaviour than currently contemplated. 

Coalition ministers are making Australia a global laughing stock as they execute ever more ludicrous contortions to prove that our dysfunctional climate policy represents a fair contribution to the global effort. We have a Prime Minister who understands the climate science and is capable of real leadership. Rarely has the national interest been more poorly served than by the self-serving wilful climate denialists in the Coalition who are preventing that leadership being exercised.      

Ian Dunlop was formerly an international oil, gas and coal industry executive, chair of the Australian Coal Association and CEO of the Australian Institute of Company Directors. He is a Member of the Club of Rome.