What do we do with a problem like #Adani

Inside Story has run an updated and expanded version of my last post on Adani’s pretense that it is ready to start its mining project at a moment’s notice. The main new point is a suggestion for how a federal Labor government could close off the Galilee Basin without a general moratorium on new coal mines.

If federal Labor wins government in May (as seems highly likely), it will need to face up to the issue later this year. First of all, it will need to develop a coherent policy on phasing out coal exports — ideally involving a ban on new coalmines, though this is almost certainly too much for Labor to contemplate. That proposal also faces the counterargument, put forward by both mining companies and unions, that reduced Australian exports would be replaced by lower-quality coal from other countries.

The argument has some force, but there’s a way of taking it into account. Australia’s benchmark export is Newcastle coal, with an energy content of 6000 kilocalories per kilogram and a correspondingly low ash content. The premium for this higher-quality coal has risen greatly, though it has declined somewhat in recent years. Galilee Basin coal’s heat content, by contrast, is estimated at less than 5000 kcal/kg, and its ash content is 26 per cent, worse than coal from many competing countries. A policy that stops short of a blanket ban but requires new mines to supply coal of, say, 5500 kcal/kg or more would put an end to any idea of developing Galilee, while allowing for some smaller, higher-quality projects to proceed.

Further suggestions would be appreciated.

Socialist utopia 2050 …

what could life in Australia be like after the failure of capitalism?

That’s the title of my latest piece in The Guardian . It’s had quite a good run, but of course, plenty of pushback, mainly along the following lines

  • General objections to any kind of utopian thinking, even the very modest version in my article
  • Political impossibility
  • What about Stalin/Venezuela ?

What I haven’t seen, interestingly, is any suggestion that continuing expansion of financialised capitalism (aka neoliberalism) would produce a better outcome. Feel free to discuss this and other issues

NAIF Naivete

I was recently asked to comment on the Northern Australia Infrastructure Fund, which has largely dropped from sight since its apparent primary purpose, channelling public money to the Adani mine project, was vetoed by the Queensland government. Here’s my response

The NAIF is a failed political solution to a non-problem, harking back to the developmentalist ideology of the mid-20th century.. It reflects an outdated view of Northern Australia as a largely homogenous, underdeveloped region, in need of special government action to get growth going. In operation it has proved to be little more than a slush fund, dribbling out modest amounts of assistance to a grab-bag of projects with no coherence.

Whatever the individual merits of these projects, including regional universities and airports, fish farms and power plants they don’t differ in any important way from similar projects that don’t happen to be located north of the Tropic of Capricorn.

The NAIF should be wound up, and the funds allocated to a coherent program of infrastructure investment based on national needs rather than arbitrarily geographical distinctions.

A Green New Deal?

The idea of a “Green New Deal” seems to be everywhere, quite suddenly, although Wikipedia suggests it has been around for quite a while and that the phrase was coined by the ubiquitous Tom Friedman. There’s quite a good summary of the various versions by David Roberts at Vox (for those who don’t know him, an excellent source on climate issues in general).

The fuzziness of the term is, in a sense, unsurprising. It seems obvious that any progressive policy for the US must fit this description in broad terms. That is, it must be a modernized version of the New Deal and it must imply a shift to an environmentally sustainable economy. So, I’m going to put up my own version, without claiming that it is the One True GND.

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Adani’s Potemkin village

Throughout the long struggle over Adani’s Carmichael mine, I’ve argued that the project, as well as being environmentally disastrous, is not financially viable. Adani’s objective has been to keep the project alive, both to avoid bringing the loss of money already spent on the project and to maximize the chance that an Australian government will either pay them to go away or stop the project in a way that leaves open the possibility of a claim under the insidious system of Investor State Dispute Settlement, which still applies between Australia and India, even though our trade agreement has lapsed.

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Published (almost!)

Economics in Two Lessons is listed as the #1 New Release in Microeconomics on Amazon. I’m not sure what this means, but it sounds encouraging.

It’s now available for preorder now, with a release date of April 23, the hardcover publication date. Apple books also has it for pre-order.

Thanks again to everyone who read and commented on the excerpts I published along the way. I’ve tried to mention you all in the acknowledgements, but it’s just about inevitable that I will have missed someone.

Energy in 2019: dead horse roundup

If the world is going to avoid dangerous climate change, we need to accelerate the pace of the energy transition towards decarbonization. So, as 2019 begins, it’s worth looking at the state of play. Easing into things, I’ll take a look at the dead horses: nuclear and “clean coal”.

AFAICT, hardly any nuclear plants started construction in 2018, continuing the trend of recent years. At the beginning of the year, lots of reports suggested China would start 6-8 plants, but (again AFAICT) the actual number was zero. Elsewhere, the massively delayed Vogtle project in the US just avoided scrapping. At this point, the best hope is to limit premature closures of existing nuclear plants and keep the focus on ending coal.

“Clean coal” is a deliberately ambiguous term, encompassing carbon capture and storage, which would eliminate CO2 emissions, if only it worked, and ultrasupercritical or “High Efficiency Low Emissions (HELE) technology, a marginal improvement on existing technology.

CCS was an obvious dead horse a year ago, and nothing has changed that. Bob Burton gives a good summary.

But at least CCS would have made a difference if it had worked. The marginal improvement in efficiency going from 1990s “supercritical” technology to more modern “ultrasupercritical” isn’t worth worrying about. In any case, it’s come too late. Although there’s still a big pipeline of coal projects using older technologies (most of which will have to be cancelled if we are to achieve climate goals) there aren’t many new ones. Outside China, the number of HELE plants we are ever likely to see can be counted on fingers and toes: one in the US, a few in Europe, a few more in India, and a handful in developing countries.