The end of the coal boom

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).

188 thoughts on “The end of the coal boom

  1. 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))

  2. 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.”

  3. 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.

  4. 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.

  5. @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?

  6. 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.

  7. 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.

  8. @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.

  9. oops should be:

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

  10. 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

  11. @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.

  12. 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.

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