Home > Economics - General, Environment > The end of the coal boom

The end of the coal boom

November 4th, 2013

A bit over a year ago, I put up a post with the same title as this one, except that it ended with a question mark. At that point, most of the authorities I cited took the view that the decline in the world price of steaming coal was just a blip. In fact, prices have kept on falling and are now, in real terms, not much higher than they were in 2004. More importantly, there is now no expectation of a recovery any time soon. The clearest evidence of that is the abandonment or deferral of a string of proposals to create or expand coal export terminals, most recently by BHP at Abbot Point. Investors are desperately trying to get out of the most recently completed project, at Wiggins Island.

A few observations on this

* It’s common for participants in the Australian debate to claim that the rest of the world is going ahead with coal-fired power stations and fossil fuel projects at an unprecedented rate. That was the view that motivated these port expansion projects, and it’s been falsified as clearly as it can be by their abandonment.

* Much of the discussion about climate mitigation is based on the assumption that Australia can decide how much or how little of the burden we should bear. Leaving aside the risks of a free rider strategy, our status as a coal-exporter means that the biggest impacts will arise from decisions made overseas

* Finally, for some light relief here’s former Queensland Treasurer Andrew Fraser (paywalled) citing the now-abandoned Abbott Point project as evidence of the benefits of the Bligh government’s asset sales program, of which he was the biggest booster. It will be interesting to see if he now changes tack and claims that the state was lucky to get of these assets when it could (a more plausible line, but both dubious and contradictory of his previous position).

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  1. Ikonoclast
    November 10th, 2013 at 04:58 | #1

    @Ronald Brak

    Tired of your trolling. What I said was plain enough. If you don’t find it credible you don’t find it credible. End of story.

  2. November 10th, 2013 at 05:03 | #2

    Megan, what’s wrong with using natural gas to make nitrogen fertilizer?

  3. November 10th, 2013 at 05:08 | #3

    Ikonoclast, did you change your mind? Did you go from thinking that Australia was likely to suffer a collapse of civilisation or or at least a large number of deaths due to a lack of resources and now only think this might happen as a result of invasion?

  4. November 10th, 2013 at 05:45 | #4

    Megan, I don’t think murdering people would be helpful to anyone. And it would be particularly unhelpful to the people being murdered.

  5. ZM
    November 10th, 2013 at 05:48 | #5

    Ronald Brak, you ask us for numbers and particular resources and so forth, but then you disagree with everything without providing numbers and the extent of particular resources and good arguments yourself. And then claim your are too illiterate to read selected quotes and so on.

    I think you should prosecute your argument more vigorously.

    What reason do you have to think resources will go on expanding infinitely in number like The Magic Pudding for all time?
    Can you tell us the exact amounts of particular resources available into the future so that we magistrate be assured that is was wise to go on consuming them at the rate we do so?

  6. ZM
    November 10th, 2013 at 05:49 | #6

    *we might be assured*

  7. November 10th, 2013 at 06:30 | #7

    ZM, are you saying that in order for Australia to avoid a collapse of civilization or a large number of deaths in the next 100 years due to a lack of resources it is necessary for resources to, “…go on expanding infinitely in number like The Magic Pudding for all time.”? If so, that’s an interesting position to take.

  8. Salient Green
    November 10th, 2013 at 07:14 | #8

    @Ronald Brak
    Where’s your imagination Ronald? How would Australia cope for instance in this scenario? We have just had 10 years of drought, worst on record, the dams are close to empty, silos are empty well before the grain harvest, the world is in the grip of another GFC, the monsoons fail in Asia, major fisheries have collapsed world wide and there’s a crisis of Syrian proportions on steroids somewhere in Asia. Europe is full, Russia is frozen so the assylum seekers, with assistance from Asian governments, use passenger liners to send refugees to Australia and NZ. How many would it take to collapse our civilisation? I reckon 2 million a year would do it but there could be double that or more. Now that’s ‘Invasion’ definition #2, “arrival in large numbers”
    None of that is far fetched IMHO.

  9. November 10th, 2013 at 07:18 | #9

    Salient Green, I don’t think millions of people turning up counts as running out of resources.

  10. ZM
    November 10th, 2013 at 07:21 | #10

    Well I don’t think I have talked so much about a collapse of civilisation because it is too difficult to foresee, and what the timeframe would be, because people have free will and can choose and change what they do.

    specifically with climate change there are people that say over maybe 2 degrees would affect ecological balances and weather events to such an extent that the sort of global civilisation that we have today would be impossible – but that is what people are used to and know, and there are very many people. So if that were the case I think, depending on the timeframe and whether we act in such a way that it comes to pass or not, then there would probably be wars and so on. Which, as was pointed out above, is terribly dangerous with the sort of weapons that governments have been and are accumulating. Also, look how quickly civil and material infrastructure can be destroyed, like what has happened in Syria.

    Well, i think you are taking a Magic Pudding view of resources. The third article I quoted argued or demonstrated that resource use is currently over the amount that the earth’s ecology can restore, and has been since the early 1970s. The damage this does is cumulative and interrelated – there are diebacks of bees, and they are key pollinators, so if that becomes more pronounced it could affect some food supplies, just as an example.

    You have asked for evidence and I’ve tried to provide it, I am not a scientist, and most of their papers are not available to the public freely. But you’re not providing any evidence at all that we do have more than sufficient resources for people in developed countries to go on consuming materials at the rate they consume them, and for poorer countries to increase their consumption to a similar standard. If you can’t provide evidence to support your position, and you won’t so much as try to read the evidence I tried to provide, that is quite an unfair way of arguing I think.

  11. Julie Thomas
    November 10th, 2013 at 07:25 | #11

    The ability to co-operate, Ronald, that is the resource that we may lack, the resource that will be needed to work through a change of direction for our country/civilization.

    For the past few decades, we have been exhorted to be in competitive mode – everyone needs to climb the bloody ladder of success and step on those who don’t want to climb or can’t because genes, and the right of politics are wanting more of that as the solution. Social engineering indeed!

    So for any rational scaling down to happen, without crises, individuals need to be cooperative and work for the common good not for their own self-interest; that only works when resources are infinite.

    And it might be fun for you to ridicule the idea, but there are some people – the John Galt wanna-bees? – believing and arguing for the idea that we (they?) can and need to create a world in which resources can go on expanding infinitely and they also seem to think that we can this by breeding high IQ individuals.

    That is ‘their’ utopian vision – risk takers willing to bet on this solution – and they are fighting against the low risk solution of scaling back rationally. So I think it is snarky – or something like that – for you to pretend that this is not an issue worthy of acknowledgement.

  12. November 10th, 2013 at 07:43 | #12

    ZM, you are welcome to think that I am taking a Magic Pudding view of resources, but I’d like you to appreciate that this comes from inside your own head and not anything I’ve written.

  13. ZM
    November 10th, 2013 at 07:51 | #13

    Well, i can only go by your writing. If you would agree that resources are limited and can be consumed faster than they regenerate, then I’m not sure what your reasoning is to disagree with scientists whose work says that we are at that point now, and need to scale back consumption of resources? Why do you think we are not at that point now?

  14. Ikonoclast
    November 10th, 2013 at 08:36 | #14

    Ronald Brak is a troller. Ignore him.

  15. ZM
    November 10th, 2013 at 08:45 | #15

    Nut if people just ignore what each other say on climate change and sustainability, I don’t think it is at all possible arrive at anything approaching a consensus at all?

  16. November 10th, 2013 at 09:10 | #16

    Julie Thomas, the lack of ability to cooperate constructively has certainly caused all sorts of problems in the past and no doubt will continue to do so in the future. But rather than concetrate on this, I’ve had a narrower focus.

    Ikonoclast wrote: “The proof that catastrophe is certain is contained in footprint analysis which demonstrates we are already in overshoot. Currently, we using up earth’s resource stocks and environmental services about 50% faster than they renew. This is on average as some stocks (mineral concentrations) do not renew on any timescale useful to humans. In overshoot situations a die-off catastrophe is 100% certain. It’s an invioable biophysical law.”

    So I’ve been wanting to know what resources we might run out that would cause this to happen. I asked for Australia within the next 100 years as if Australia won’t have enough resources then it seems likely that other countries won’t. Also, Australia is probably the country that people are most familar with which should make things easier.

    Sor no one has been able to name one resource. It has been suggested that we might run out of food and water, but we know from past experience and from the actions of countries such as Israel that we would still be able to feed ourselves and others and sustain civilisaton even if rainfall were greatly reduced. Oil is not a problem, we have a lot of it and even if we didn’t we certainly know that transportation can be electrified. Lubrication was mentioned but that’s not actually a problem and I’m a little surprised at how the the person who mentioned it seems unaware that car service places have been pushing synthetic oil on people for years now. Coal is not a problem, there’s vast amounts of that and it’s certainly not needed to sustain civilisation. We aren’t going to run of metals either in the next 100 years, whether they are rare or not, and we’re not about to run out of fertiliser.

    If we agreed that Australia was not going to suffer a dieoff or a collapse of civilisation due to a lack of resources we could move onto whether or not other countries might suffer from a lack of resources, but we haven’t really gotten onto that stage. Instead a number of people appear to have assumed that they will and will invade Australia to take vital resources, whatever they may happen to be. And another person apparently assumed that I want to murder people with drones. That seemed like a bit of a leap to me.

    Anyway, if anyone wants to tell me the name of a resource that they think a lack of will cause civilisation to collapse in Australia in the next 100 years, or at least cause a significant number of Australians to die, please do. (And an explanation of why you think it will would be nice.) And if you want to move on to the United States and tell me the name of a resource that want of will do them in within the next 100 years please do.

  17. ZM
    November 10th, 2013 at 09:14 | #17

    Um, are good faith and good will resources? I guess you could try to quantify them as part of overall positive and negative human resources if you wanted to?

  18. Salient Green
    November 10th, 2013 at 09:14 | #18

    @Ronald Brak
    Of course not, but, being on the bones of your butt when millions turn up, and stay, means running out of resources. Don’t forget several of us here have been describing resources other than metals and fossil fuels.

  19. ZM
    November 10th, 2013 at 09:33 | #19

    Ronald Brak, this is a good introduction to the idea of some specific resources that have been exhausted or are threatened in Australia. It doesn’t list them name by name, but it is an introduction to the idea.

    From the Department of Environment and Heritage
    http://www.environment.gov.au/system/files/resources/a903f231-1dae-48cc-8cc2-b139f8cd731c/files/overview.pdf

    “An ecological community is an integrated assembly of native species that inhabits a particular area in nature. Species within such communities interact and depend on each other — for example, for food or shelter.”

    “Over the 200 years since European settlement, extensive clearing of native vegetation has removed, changed or fragmented habitats. Human activity and natural events such as
    fire, drought and flood continue to change Australia’s ecology. Such change affects the interactions within ecological communities, and can reduce their diversity and threaten the survival of many native species.
    Since settlement, hundreds of species have become extinct in Australia, including at least
    50 bird and mammal, 4 frog and more than 60 plant species. It is likely that other species have disappeared too, without our knowledge. Many other species are considered to be threatened and are listed under Australian Government legislation as endangered or vulnerable. More than 310 species of native animals and over 1180 species of native plants are at risk of disappearing forever.”

  20. Julie Thomas
    November 10th, 2013 at 09:43 | #20

    “we would still be able to feed ourselves and others and sustain civilisation even if rainfall were greatly reduced.”

    Nice to be so sure about this one. Do you grow food yourself Ronald? If you tried it, you might see that it is not an easy thing to do.

    I do think you are right that we can adapt to less rainfall but not so quickly to the other changes that are predicted to happen; for example the animals, plants and fruit trees that are currently productive will not be productive in a different climate. And the science that underpins crop fertility and gives farmers the info that they need to change seed or plant variety and cope with new pests and diseases and that sort of thing may not be able to keep providing solutions.

    Of course it is difficult to see that where the problems will be, but it seems a bit ‘stupid’ of you – oh that’s right (face-palm) – to just deny that there will be any.

  21. November 10th, 2013 at 09:47 | #21

    Julie, the gap between “civilisation not collapsing and large numbers of Australians not dying” and “No problem at all,” is so vast it’s very hard to see how you confused the two.

  22. November 10th, 2013 at 09:50 | #22

    ZM, as it has unfortunately been demonstrated, it is quite possible for vast amounts of ecological damage to be done and huge numbers of species to be driven to extinction without civilisation collapsing or large numbers of people dying.

  23. Julie Thomas
    November 10th, 2013 at 09:59 | #23

    Ronald it may be hard for you to see how your arguments can be confusing but even stupid people like you, can learn to talk to even stupider people like me; it just takes a bit of willingness to co-operate.

    Can you do that? Or do you need to keep the attitude you already have?

  24. November 10th, 2013 at 10:04 | #24

    Julie, it’s true I don’t talk like ‘normal’ people. I used to try, but sometimes they’d get upset for reasons I couldn’t fathom. So I made an effort to communicate more precisely so that mistakes wouldn’t be made. That hasn’t made people happy either. In the future I may just write in point form or perhaps draw circular diagrams.

  25. Ikonoclast
    November 10th, 2013 at 10:06 | #25

    FAO has noted:

    By 2025, 1.8 billion people will experience absolute water scarcity, and 2/3 of the world will be living under water-stressed conditions

    Scarcity can take two forms: there is an important distinction drawn in this discussion between Physical Water Scarcity and Economic Water Scarcity.

    By 2030, almost half the world will live under conditions of high water stress.

  26. Ikonoclast
    November 10th, 2013 at 10:13 | #26

    Also FAO notes;

    Over 1.4 billion people currently live in river basins where the use of water exceeds minimum recharge levels, leading to the desiccation of rivers and depletion of groundwater. (Source: Human Development Report 2006)

    In 60 percent of European cities with more than 100,000 people, groundwater is being used at a faster rate than it can be replenished. (Source: World Business Council For Sustainable Development (WBCSD))

  27. ZM
    November 10th, 2013 at 10:30 | #27

    Ronald Brak “ZM, as it has unfortunately been demonstrated, it is quite possible for vast amounts of ecological damage to be done and huge numbers of species to be driven to extinction without civilisation collapsing or large numbers of people dying.”

    There is a book called collapse by Jared Diamond which you might be interested to read, although it is not in dot points

    If you donot have time to read the book there is a transcript of a lecture:

    Tanner lecture for the Year 2000 Ecological Collapses of Pre-industrial Societies by Jared Diamond
    “There has been a widespread belief that pre-industrial peoples, unlike us moderns, respected Nature and lived in harmony with their environment and were wise stewards of natural resources.
    But, in fact, many pre-industrial societies did collapse. Let us define “collapse of a society” as a local drastic decrease in human population numbers and/or in political, economic, or social complexity. Collapse can even proceed to the point that the human population completely disappears over a large area. By those definitions, the long list of victims of pre- industrial collapses includes the Anasazi of the U.S. Southwest, Angkor Wat, Cahokia outside St. Louis, Classic Lowland Maya, Easter Island and some other Polynesian societies, Fertile Crescent societies, Great Zimbabwe, the Greenland Norse, Harappan Indus Valley civilization, Mycenean Greece, and the Western Roman Empire. These vanished civilizations have fascinated us for a long time, as romantic mysteries.
    Recent overwhelming evidence from archaeology and other disciplines is now demonstrating that some of those romantically mysterious collapses actually were self-inflicted ecological disasters, similar to the ecological suicide that we risk committing today.”

    http://www.sscnet.ucla.edu/anthro/bec/papers/Diamond_Ecological_Collapses.PDF

  28. Donald Oats
    November 10th, 2013 at 11:06 | #28

    Environment.

    The period of urbanisation is here, along with its evil twin of slumsville. People are being forceably shifted from rural environments and into shanty towns—if they are shifted to somewhere at all—so that their farm land may be used for city building and the like. China is an exemplar for that particularly egregious activity.

    Does it really make sense for modern society to consist of a bunch of densely crowded cities and shanty towns? Is that really how modern people wish to live, or is it simply the choice being made for us? If we continue amassing people upon the planet, and continue the path of urbanisation, we’ll become box-people, living in little apartments—if we are wealthy enough—or in little shanty huts, surviving.^fn1 Seems like a retrograde step is there for the taking.

    And that is just the human habitat: the rest of the global environment is in a state of such flux, thanks to us humans, that the rate of change puts us into unknown territory. The optimist in each of us believes that since we found solutions for previous problems (of our own creation), so we shall devise solutions for our current and future problems (of our own creation, usually from our solutions to previous problems); the pessimist in us thinks that this time, the problems are so overwhelming that the end is nigh (think of your own worst case scenario here…).

    I’m more of the view that while we are incredibly adaptable and tenacious as a species, while we can manufacture some amazing solutions to seemingly intractable problems, the question is whether the adaptations lead to a pleasing place to live out our lives, or not. The wealthy always have the big options, but the majority don’t. Let’s think about how the majority might wish to live in the future we are constructing for ourselves.

    fn1: Yes, people have lived in city environments since the dawn of civilisation; however, the percentage of city-dwelling people as a fraction of global population has never been higher than today.

  29. Donald Oats
    November 10th, 2013 at 11:35 | #29

    While being optimistic is a good thing—usually, the breadth and scale of humanity’s impact is easily underestimated. Perhaps it is worth reminding ourselves that even a small-ish 1% to 2% population growth rate has some awesome consequences: here is a chart of global population from pre-civilisation (approx) to current (approx). Sober reminder that Mr Exponential growth has a sting in the tail…

    PS: While I’ve used Wikipedia for the graphic, the information is readily obtainable elsewhere.

  30. November 10th, 2013 at 12:50 | #30

    @Ronald Brak

    There is no way in the world that you could possibly have read my comment as:

    apparently assumed that I want to murder people with drones

    * I never argued “100% certain” anything, I explicitly said that I thought we have an array of impending problems but that 100% was higher than I would put it.

    * You want simplicity where there is complexity.

    * You want 2 things to be demonstrated to your satisfaction (apparently to convince you that we have “problems”, but I’ll come back to that). 1 – a specific resource Australia will “run out of” within 100 years; and 2 – that the total loss of this resource will cause “civilisation” to “collapse” here and cause large amounts of Australian deaths.

    * As things seemed to be drifting around and you seemed not to be getting what you were after, I asked you to set some parameters for “civilisation” and “collapse”. Here is where I asked whether martial law and the killing of people trying to come into Australia by our government, or on their behalf, might not fall into a category of loss of, or “collapse” of what we consider our “civilisation”.

    * You criticised a comment and seemed to be acknowledging that in your belief we might indeed have “problems”.

    Addressing those things might get what you are looking for – unless you sincerely believe that we don’t really face much trouble over the next 100 years. Which leads me to ask:

    Do you think that climate change is likely to be much of a problem (for everyone including Australia) by 2113, and that it will be due to GHG emissions past, present and future?

  31. November 10th, 2013 at 12:53 | #31

    According to Al Jaz the local governor and police chief are estimating 10,000 deaths in the Philippines from the largest typhoon ever to hit there, so far.

  32. November 10th, 2013 at 13:12 | #32

    Megan:
    1. I think global warming is the greatest environmental threat the world faces and that it has the capacity to kill millions.
    2. I don’t think it has the capacity to cause civilisation to collapse in Australia or kill large numbers of Australians.
    3. I don’t think it will cause civilisation to collapse elsewhere in the world, but it can and will still kill lots of people.
    4. When I say I think something will happen it generally means that I’d be willing to bet money on it happening, but I’m not 100% certain that it will happen.

  33. Mel
    November 10th, 2013 at 13:37 | #33

    @Ronald Brak

    Sounds reasonable to me. I suspect millions will die due to AGW but this will happen in the poor and badly governed parts of the world. Australia is wealthy enough to adapt but adaptation is nonetheless a poor second choice to fixing the problem.

    Also another reminder than our host PrQ is buying in to the disaster pron scenarios we’re seeing here.

  34. Mel
    November 10th, 2013 at 13:43 | #34

    oops should be:

    Also another reminder than our host PrQ is *NOT* buying in to the disaster pron scenarios we’re seeing here.

  35. ZM
    November 10th, 2013 at 14:17 | #35

    Mel
    Sounds reasonable to me. I suspect millions will die due to AGW but this will happen in the poor and badly governed parts of the world. Australia is wealthy enough to adapt but adaptation is nonetheless a poor second choice to fixing the problem.”

    Adaptation will be needed regardless, it’s just about impossible that the world will not undergo at least 1.5 degrees of warming, and judging by people’s willingness to change their lifestyles and the governments so far unwillingness to suggest intervention in the market to the extent needed (eg. Transport changes, land use changes etc) then 2 degrees really has a slim chance.

    Between 1.5 degrees and 2 degrees is where at least a large number of scientists find the modelling difficult because of feedbacks, such as ice melting, thawing tundra releasing gasses etc. Feedbacks like this could lead to tipping points.

    Because the changes are cumulative and human actions are not set in stone, it is impossible to plan for adaptation in advance. Look at the trouble stirred up when local governments try to stop new developments in flood prone areas, such as lakes entrance in gippsland. Adaptation would likely involve greater market interventions than mitigation to remain somewhat fair, otherwise there would be a scenario of the lucky and unlucky, rich and poor to a degree not not in Australia since the earlier days of British colonialism here. IMO

  36. November 10th, 2013 at 15:11 | #36

    @Ronald Brak

    Wikipedia defines “civilisation”:

    Civilization or civilisation generally refers to state polities which combine these basic institutions: a ceremonial centre (a formal gathering place for social and cultural activities), a system of writing, and a city. The term is used to contrast with other types of communities including hunter-gatherers, nomadic pastoralists and tribal villages. Civilizations have more densely populated settlements, characterized by a ruling elite, and subordinate urban and rural populations, which, by the division of labour, engage in intensive agriculture, mining, small-scale manufacture and trade. Civilization concentrates power, extending man’s control over both nature, and over other human beings.

    Going by that definition, it would seem unlikely that it is going to “collapse” anywhere in the world. There may be not much left of democracy, rights, freedom or social services, and ‘misery’, poverty and crime might be widespread – but technically “civilisation” is most probably going to carry on for a while even as those (thousands of?) millions die.

    It doesn’t sound very desirable.

  37. November 10th, 2013 at 16:50 | #37

    Megan:
    1. Civilisation can continue to exist but be unpleasant.
    2. Unpleasantness isn’t very pleasant.
    3. To avoid unpleasantness we can work to make our civilization more pleasant.
    4. Preserving the environment, maintaining a stable climate, carefully managing resources, and working to decrease paranoia are all methods that can make make civilisation more pleasant.
    5. Also roboprostitutes. Particularly in places such as North Korea and China where there are a preponderance of men.

  38. November 11th, 2013 at 00:50 | #38

    @Ronald Brak

    I now tend to agree with Ikon’s earlier assessment of you.

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