Robert Farley has replied to my recent post on the obsolescence of naval power. Unlike our previous exchange, a pile-on where I was (as he points out) in a minority of one, Robert’s tone is mostly civil this time, and I intend to reciprocate. Our disagreements have narrowed a fair way. On many points, it’s a matter of whether the glass is half-full or half-empty.

For example, Farley observes that despite Houthi attacks, 2 million tonnes of shipping per day is passing through the Suez canal. I’d turn that around and point out that 4 million tonnes of shipping per day has been diverted to more roundabout routes. However, since we agree that naval authorities overstate the macro importance of threats to shipping lanes, we can put that point to one side.

A more relevant case is that of China’s capacity (or lack thereof) to mount a seaborne invasion of Taiwan. I said that China has only a handful of modern landing craft and that their announced plan relies on civilian ferries. Farley points out that China has constructed 16 large, modern amphibious assault vessels in the past 18 years, with more on the way. That’s more than might normally be implied by the word “handful”, but not in a way that meaningfully challenges my argument.

According to Robert’s link, the ships in question can carry 800 troops, or about 10 000 if all of them were used. That’s enough to do a re-enactment of the Dieppe raid, but not to play a major role in an invasion of a country with a standing army at least ten times as large. And the implied rate of construction (one per year) suggests this isn’t going to change any time soon. This leisurely approach is consistent with the CCPs need to maintain a public position that it is willing and able to reunite with Taiwan by force, along with a private recognition that this isn’t possible and wouldn’t be wise if it were.

Now I come to the question of expertise. Robert is miffed that as an economist, I declaim on subjects on which I have no expertise, and also by my use of the term “naval fans”. The latter was a snarky response to our previous interaction and I withdraw it.

But as Robert himself admits, naval authorities routinely make claims about the economic role of naval power on which they have no expertise (some of which have been proved thoroughly wrong by the current partial closure of the Suez Canal, as well as by lengthy closures in the 20th century). The same authorities routinely point to the vast amount of of shipping passing through the South China Sea as evidence of the need to protect this waterway against China, where most of this shipping originates or ends. This clip from Australian satirical show Utopia makes the point.

The bigger problem with claims about expertise arises when it’s applied to events that are too rare, and too unlike each other, to provide a real evidence base. That’s true of global economic crises, for example. Economists mostly failed to predict the Global Financial crisis, and disagreed about both its likely course and the appropriate policy response.

It’s true in spades about naval warfare. As Robert says “all naval wars are incredibly rare and we have to analyze the hell out of the empirical evidence we can get our hands on.” Until 2022, the only significant instance in my, or Farley’s lifetime, was the Falklands War, which can be read either as a demonstration of the continuing relevance of navies or as an illustration of their vulnerability even to weak opponents like the Argentine Air Force. But that was forty years ago, when anti-ship missiles were much less well-developed.

In the absence of significant empirical evidence, naval experts have had to rely on the outcomes of exercises and simulations to make predictions. Unsurprisingly, these have tended to reaffirm the importance and power of navies (compare the many economists who extolled the financial sector before the GFC).

In particular, most naval experts saw Russia’s Black Sea Fleet as a powerful force that would play a decisive role in a war with Ukraine. Farley points out some partial successes in obstructing Ukrainian exports, but this is nothing like the total dominance most experts predicted.

As regards Taiwan, it’s interesting to contrast the steady drumbeat of warnings from US generals and admires that an invasion is imminent with this assessment by (non-military) experts that an invasion is not likely and (on the majority view) not feasible.

I’m not sure where naval experts fall on this spectrum. But, as with economic crises, this is an issue on which you can pick your expert.

In all the discussion of Leif Wenar’s critique of Effective Altruism , I haven’t seen much mention of the central premise: that development aid is generally counterproductive (unless, perhaps, it’s delivered by wealthy surfers in their spare time). Wenar is quite clear that his argument applies just as much to official development aid and to the long-standing efforts of NGOs as to projects supported by EA. He quotes burned-out aid workers “hoping their projects were doing more good than harm.”

Wenar provides some examples of unintended consequences. For example, bednets provided to fight are sometimes diverted for use as fishing nets. And catching more fish might be bad because it could lead to overfishing (there is no actual evidence of this happening, AFAICT). This seems trivial in comparison to the lives saved by anti-malarial programs

It’s worth pointing out that, on Wenar’s telling, a project that gave poor people proper fishing nets (exactly the kind of thing that might appeal to the coastal villagers befriended by his surfer friend) might be even worse for overfishing than the occasional diversion of bednets.

Wenar applies his critique to international aid programs. But exactly the same kind of arguments could be, and are made, against similar programs at the national level or subnational level. It’s not hard to find burned-out social workers, teachers and for that matter, university professors, who will say, after some particularly dispiriting experience, that their efforts have been worse than useless. And the political right is always eager to point out the unintended consequences of helping people. But we have plenty of evidence, most notably from the last decade of austerity, to show that not helping people is much worse.

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My latest in Crikey

Peter Dutton can’t seem to take a trick on nuclear power. Any option he puts forward seems to vanish as soon as he makes a commitment.

Since Dutton became opposition leader, he’s pushed the idea of small modular reactors (SMRs). At least in their original concept, these were reactors small enough (say 50-to-70MW capacity) to be built in a factory and shipped to sites where they could be installed in whatever number was required. The leading candidate was NuScale, a US firm that had contracted with a group of utilities in Utah to develop a pilot project of 12 (later reduced to six) SMRs.

The idea had the enthusiastic backing of the Australian Nuclear Science and Technology Organisation (ANSTO), the government’s official adviser on nuclear technology. The ANSTO website includes information on how SMRs can be constructed in three to five years, and that the US will have them operational by 2026.

That sounded too good to be true, and sadly, it was — NuScale abandoned its project late last year. After a bit of prodding, ANSTO added a disclaimer and a note that the “three to five year estimate” came from a research paper by the University of Leeds, which in turn could be traced to a dodgy consulting report from 2014.

On nuclear, Coalition prefers the optimism of misleading, decade-old, unverified claims

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Having given up hope on NuScale, Dutton needed an alternative.

He settled on Rolls-Royce, a reassuringly familiar name with a long track record of engineering excellence, not always matched by its financial success (it was famously nationalised and broken up by the Conservative UK government in the 1970s). It produces the nuclear reactors to be used in the submarines we will acquire under the AUKUS deal.

Rolls-Royce also offers what it calls an SMR, though this is something of a misnomer. At 470MWe, the reactor scarcely qualifies as small. It’s far too big to be built in a factory and shipped to its installation site. The “modular” description refers to the fact that the design uses 1,500 “modular components”, which are to be produced in a factory then assembled on site. 

This is precisely the approach that was attempted, unsuccessfully, in the Westinghouse AP1000 design. Of four AP1000 reactors started in the US, two were abandoned with a loss of billions of dollars while the other two (at Vogtle in Georgia) have finally been completed, years late and billions over budget.

Despite these concerns, Rolls-Royce looked like a frontrunner, at least in the UK. Its design was the first to enter the Office for Nuclear Regulation approval process in 2021, with a target delivery date of 2030. The UK government provided £210 million (about A$400 million) in funding to support the project.

So, late last week, Dutton briefed Simon Benson at The Australian on a plan to deliver Rolls-Royce reactors into the grid by the mid-2030s. 

What could go wrong? Plenty it seems. Just as The Australian story appeared, the UK government announced the winners of a grant to build SMRs in County Durham, and Rolls-Royce was not among them. UK deployment of the Rolls-Royce design now seems unlikely.

Rolls-Royce is now talking about building its first plants overseas. Poland has been mentioned as a possibility, but that’s a furphy. Under the now-departed Law and Justice government, Poland announced deals involving a string of different reactor designs: the AP1000, the GE Hitachi Nuclear Energy’s BWRX-300 (a direct competitor for Rolls-Royce), Last Energy microreactors, and even NuScale. Few if any will actually be built. 

So, if Dutton goes ahead with Rolls-Royce, Australia could be in the unenviable situation of building “first of a kind” (FOAK) reactors with an untested design. Even more than nuclear plants in general, FOAK projects are notorious for delays and cost overruns. For a country like Australia, with no established nuclear industry or regulatory structure, it would be madness to try such a thing.

What next for Dutton’s nuclear policy? There’s still time for a climbdown before the policy is officially announced, but it’s unclear that the nuclear true believers in the LNP would accept such a thing. He could switch to a design with slightly better chances, such as the BWRX-300, but that would risk a third embarrassment if the design failed. So he has little choice but to press ahead with the Rolls-Royce dream and hope that it is not finally dispelled before the 2025 election.

My latest in The Guardian

Supermarkets are the public face of inflation. Every time we go shopping, we are reminded that just about everything costs more than it did before Covid. And shrinkflation, once subtle and insidious, has become blatant. A standard chocolate bar is now what used to be called “fun size”. A natural response, particularly for politicians seeking to divert attention from themselves, is to blame greed and monopoly power.

Explanations based on greed are rather naive. Corporate executives are paid by shareholders to be greedy – that is, to maximise profit subject to a somewhat hazy concept of “social licence” regarding the treatment of customers, employees and other stakeholders. And there is no reason to think that Coles and Woolworths were any less greedy before the arrival of the pandemic than after.

Australia’s cost-of-living crisis isn’t about the price of groceries. It’s about wealth distribution

John Quiggin

The role of monopoly power is a bit more complex. Coles and Woolworths dominate the market, but if anything their dominance has eroded in recent years as Aldi’s market share has grown. However, their capacity to benefit from market power was increased by strong growth in demand after the end of lockdowns. Under conditions of strong demand, firms with market power can pad their profit margins and amplify inflation, as appears to have occurred in this instance.

The big problem with the supermarket sector is not monopoly but the monopsony (the technical term for a market dominated by one, or a few, buyers) power of supermarkets who can push down the prices and terms they offer to their suppliers. The mandatory code of conduct proposed after a review by Dr Craig Emerson might help to address these problems.

What about divestiture? Perhaps mistaking the late Joseph Stalin for a trustbuster, Anthony Albanese has described this as a “Soviet” option. In fact, forced divestiture is a standard feature of competition policy internationally, available in such distinctly non-Soviet countries as the US and UK.

Nevertheless, divestiture is unlikely to be the right remedy for the problems of the supermarket sector. Most people have only one or two supermarkets in easy reach, and splitting Coles and Woolworths into two or more competing businesses wouldn’t change that. The problems of dealing with suppliers are better dealt with through conduct measures rather than a breakup. The only obvious targets for divestiture are the liquor businesses and the loyalty programs (Flybuys and Everyday Rewards).

But there are other parts of the Australian economy where divestiture powers could be a useful tool for competition policy. Perhaps the most notable example is that of airlines. The Sydney-Melbourne-Brisbane “golden triangle” comprises three of the busiest city-pair routes in the world, and ought to be fiercely competitive. But a single corporation, Qantas, holds more than 60% of the market under its own name and through its wholly owned subsidiary Jetstar.

There are many factors contributing to Qantas’s dominance. These include control of crucial slots and cabotage rules restricting international competition. And Qantas has received favourable treatment reflecting residual goodwill from its historical role as the national flag carrier (much eroded by the Joyce era, but still present).

But the ownership of Jetstar as a “flanker” or “fighter” brand is at least as important. Wikipedia notes that flankers are “lower-priced offerings launched by a company to take on, and ideally take out, specific competitors”, and the first example listed is that of Qantas. Forcing divestment would yield an immediate increase in competition in the airline market.

Another candidate for divestiture is Transurban, the owner of most of Australia’s privatised toll roads. Here the main issue is not competition per se, since toll roads in different locations don’t compete with each other, but the political power associated with having a single company control so much of our transport infrastructure.

It is now becoming clear that the deals that have greatly enriched Transurban shareholders have been a disaster for motorists and for coherent urban planning. The solution, as others have argued, could be to take these roads back into public ownership and redo road pricing from scratch. A breakup of Transurban into separate state-level businesses would be a first step.

Big business in Australia faces less competition than almost anywhere in the world and likes it that way. The era of privatisation and “light-handed” regulation has only made matters worse. Turning the situation around will require a full set of policy tools, including conduct measures, divestiture and, in some cases, a return to public ownership.

That’s what the Bible (or at least, the preacher in Ecclesiastes) says, and sometimes I feel as if that’s right. But right now, I’m basking in the glow of having returned final proofs for Public Policy and Climate Change: Politics, Philosophy and Economics, a text to appear in the Lecture Notes in Economics and Policy series put out by World Scientific Publishers.

As well as approving the proofs, I produced an index, using a program with the self-explanatory title PDF Index Generator (this is different from the index function in Acrobat, which indexes every word for search purposes). As with lots of software, it’s not as good as what a professional editor would produce, but much cheaper and faster. I plan to write about the economic implications some time, but this kind of thing has been going on for a long time – in my own experience, starting with desktop publishing on the Mac.

I’ve got a couple more books in the pipeline. One of them, a volume of my collected articles optimistically entitled After Neoliberalism, is almost at proof stage. The other a cartoon history of privatisation in Australia is about to start.

I’ve been spending a lot more time on the Sunshine Coast, hoping to move there permanently. Perhaps as a benefit of local training, I did better than expected in the Mooloolaba Olympic triathlon, finishing in 3 hours 14 minutes, one of my better times in a decade or more of competition.

As I’ve already mentioned, I’ll be doing a virtual version of the MS Brissie to the Bay ride, raising money to help in the fight against multiple sclerosis and to help people living with MS. You can support me here.

Here’s a list of my published output in March

Journal article

Quiggin, J. (2024) Full employment and Working Future. The Economic and Labour Relations Review, 1-12, (My review of the Albanese government’s White Paper on Employment)

Opinion pieces

On nuclear, Coalition prefers the optimism of misleading, decade-old, unverified claims, Crikey 20 March

Australia must wean itself from monster utes – and the federal government’s weakening of vehicle emissions rules won’t help one bit The Conversation, 28 March

Media

My media report for March, password quiggin (Thanks as usual to Alysha Hilevuo for preparing this)

Daniel Kahneman, who was, along with Elinor Ostrom, one of the very few non-economists to win the Economics Nobel award, has died aged 90. There are lots of obituaries out there, so I won’t try to summarise his work. Rather, I’ll talk about how it influenced my own academic career.

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Elections over the last week have seen some pretty good outcomes for the Greens and some very bad outcomes for both Labor and the LNP.

Here’s what ChatGPT came up when I asked for a representation of Green Labor

In the Brisbane Council elections, the Greens got 23.1 per cent of the vote, barely behind Labor on 26.9. The combined total of exactly 50 per cent wasn’t reflected in terms of seats, mainly because of preference leakage and exhaustion, but I want to focus on the longer term implications here.

In Tasmania, the incumbent Liberals suffered a 12 per cent swing on primary votes, falling to 37 per cent, after a series of elections in which they received an absolute majority, or very close to it, on first preferences. Most of the aggregate loss went to independents and the Jacquie Lambie network with Labor and the Greens each picking up small gains.

That doesn’t mean that all the people who voted for JLN and independents switched from Liberals. More likely, the Greens (and maybe also) Labor picked up some Liberal voters, but lost ‘protest’ voters to JLN in particular. What’s really striking here is that the combined vote of Labor and the Liberals was below 66 per cent. “Other (including informal/blank)” comfortably outpolled Labor, and came close to beating the Liberals.

Finally, in the by-election for the South Australian seat of Dunstan (vacated by the former Liberal Premier), the Greens polled 22 per cent of the vote. Starting from a primary vote of 32 per cent, which would once have been considered disastrous, Labor won the seat comfortably on preferences, a rare by-election defeat for an opposition party.

Despite this striking evidence of dissatisfaction with the two-party system, journalists reported the Tasmanian outcome as a “hung Parliament”. This is a nonsense way of describing the situation. A hung jury is one that can’t reach a verdict. An election in which no party wins an outright majority of seats is a verdict rejecting the idea that the Parliament, or at least the Lower House, should be a rubber stamp for the winning party (or rather for the leader of that party) in between elections, when the voters have a chance to switch one ruling party for another. For some years, Tim Dunlop and I have been pushing the term “deliberative parliament” to describe this outcome.

The two-party system is one which is familiar and comfortable for the political class, including political journalists. It’s striking to observe that, while there are plenty of journalists who are clearly identified with either Labor or the Liberals, or can be seen as balanced between the two majors, there are none who align with the Greens, or Jacquie Lambie, or the teal independents, even in general terms.

All of these parties, along with the various rightwing parties that have won seats in Parliament are treated by the Press Gallery as alien intruders who will soon be gone. Similarly, a “hung parliament” of which we have seen at least a dozen in Australia, in recent years, is treated as an unfortunate aberration.

For the left, the big problem here is the difficulty of establishing a working relationship between Labor and the Greens. The only place this has worked consistently well is the ACT, where some form of Labor-Green coalition has held office since 2008. There are two big problems here. The first is the general problem of a centre-left coalition (or less formal arrangement) in which the centrist party (in this case Labor) is dominant, and the left party (the Greens) must take responsibility for policies that disappoint their voters. The second, local factor, is the toxic relationship between (large groups of) Green and Labor politicians and activists, of which Anthony Albanese is a notable exemplar.

One way or another, these difficulties will have to be resolved. That will take time, and perhaps some generational replacement, so that those making Labor-Green agreements won’t be distracted by the question of who did what to whom in 2010. But the days of pliant parliamentary majorities are drawing to a end, and democracy will be the better for it.

Andrew Leigh’s The Shortest History of Economics is the latest in a series of such histories, mostly focused on particular countries.

It begins with a striking mini-history of household lighting, focusing on the amount of labour required to produce the light now given off by a standard lightbulb: 58 hours for a wood fire, five hours for a candle based on animal fat, a few minutes for an early electric lightbulb, and less than one second for a modern light-emitting diode.

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The Shortest History of Economics – Andrew Leigh (Black Inc.)

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Importantly, what is true of labour hours is also true of material inputs. Older technologies required felling a tree or killing an animal, but an LED uses the photoelectric properties of common crystals. It only needs tiny quantities. The input of electricity is similarly modest.

Start your day with evidence-based news.

Meanwhile, because workers in all kinds of activities have become more productive, the purchasing power of their wages, expressed in terms of services like lighting, has risen. The result is that services like lighting have become exceptionally cheap.

As this example shows, The Shortest History of Economics is not, as might be supposed, a history of economic thought (a topic primarily suited to retired economists like the author of this review). Rather, it is primarily a history of economic life, from Paleolithic times to the COVID pandemic.

The history is, however, informed by modern economics, included in the narrative in palatable doses.

Standards of living

The first half of the book, covering the period up to the Industrial Revolution, is mostly about technology. Leigh begins with the transition from hunter-gatherer societies – made up of relatively small groups of people, who followed their food sources around – to agriculture, which permitted and required larger settled populations.

The effect on living standards was ambiguous at best. Farmers were less likely than hunter-gatherers to suffer violent deaths or starve in winter, but they were almost permanently undernourished. They overworked to produce a surplus that enabled a small stratum of priests and warriors to live relatively luxurious lives.

The millennia following the agricultural revolution are covered pretty quickly, with a focus on developments in transport (mostly water transport) and trade. Leigh traces the gradual emergence of a global economy, culminating in the rise of European empires, whose reach depended on sail.

There are lots of interesting vignettes, covering topics such as social mobility. There wasn’t much, as can be seen by the persistence over centuries of the same surnames in high-status positions. More depressing is the discussion of the central role of the slave trade, which was a major source of labour in the Americas and income for European nations.

The second half of the book, covering the period after the Industrial Revolution, shifts the focus from technology to economic institutions and policy. The 19th century saw the rise of the corporation and the concentration of economic power.

This produced responses in the form of “anti-trust” legislation in the United States, usually referred to as “competition policy” in Australia. This remains an issue of central concern to Leigh in his day job, as assistant minister for Competition, Charities and Treasury.

The 19th century also saw the rise of the trade union movement and the beginning of an era of continuous struggle over the distribution of income between capital labour. The balance has ebbed and flowed.

As Leigh shows, labour has been losing ground since the 1970s in most countries, while those at the top of the income distribution have gained massively. The offsetting positive development is that the very poorest people in the world have generally improved their lot, thanks to the belated arrival of modern technology.

Andrew Leigh at a press conference in Sydney, August 23, 2023. Bianca De Marchi/AAP

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Read more: Income redistribution or social insurance? A federal MP considers the future of the welfare state

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Macroeconomics

The issues I have discussed so far have mostly concerned markets and prices, the topics studied by economists under the label “microeconomics”. But the 20th century also saw the emergence of “macroeconomics”, the analysis of booms, depressions, inflation and mass unemployment.

The key figure here was English economist John Maynard Keynes, whose General Theory of Employment, Interest and Money (1935) provided the theoretical basis for the use of public expenditure and taxation (fiscal policy) to stabilise the economy.

As Leigh notes in his introduction, The Shortest History of Economics is unusual among recent popular works on economics in covering both microeconomics and macroeconomics.

Despite proceeding briskly through millennia of economic history, Leigh manages to convey the essential points in a way that does not leave the reader feeling rushed through an incomplete argument. While it makes sense to begin by reading the book from beginning to end, it is also enjoyable to dip into it, more or less at random.

Inevitably, I have some points of disagreement. At a couple of points, Leigh gives uncritical credence to beliefs widely held among economists, but not supported by the evidence.

He repeats Adam Smith’s creation story for money as a more efficient alternative to barter. But a hundred years of anthropological evidence, beginning with my namesake Alison Hingston Quiggin and continuing to the work of the late David Graeber, suggests that money first emerged as a way of discharging debts (owed to the king whose face appeared on coins or as recompense for private injuries). It was only later adapted to use in commerce.

In his discussion of Keynesian macroeconomics, Leigh cites a popular rap video presenting a dispute between Keynes and Friedrich von Hayek, two of the great economists of the 20th century.

But in reality, although Hayek had criticised Keynes’ earlier Tract on Monetary Reform (1923), he did not even review his General Theory of Employment, Interest and Money. Arguably the most effective critic was A.C. Pigou, best known nowadays as the inventor of pollution taxes.

And Keynes was quite sympathetic to the arguments against economic planning Hayek presented in The Road to Serfdom (1944).

The idea of Hayek as Keynes’ primary antagonist is largely a piece of retroactive continuity (“retconning” in the jargon of genre fiction). The myth was created in the 1970s, following Hayek’s Nobel Prize in Economics in 1974 and his influence on political leaders, including Margaret Thatcher and Augusto Pinochet.

But these are quibbles, which will be of little concern to the general readership at which the book is aimed. As with all of the dozen or so books Leigh has produced since his election to Parliament (while also raising three children and maintaining a strenuous athletic regime – how does he do it?), The Shortest History of Economics is an engaging read, conveying economic insights to readers who would find a standard economics text both boring and impenetrable.

In a few days time, I’ll be lining up in the 65-69 category for the Mooloolaba Olympic triathlon (1500m swim, 40km cycle, 10km run)[1]. People in this age category are commonly described as “aging”, “older”, “seniors”, “elders” and, worst of all, “elderly” (though this mostly kicks in at 70). The one thing we are never called is “old”. But this is the only term that makes any sense. Everyone is aging, one year at a time, and a toddler is older than a baby. Senior and elder are similarly relative terms. And “elderly” routinely implies “frail” (a lot of old people are frail, but many more are not.

What accounts for the near-universal squeamishness that surrounds the term “old”? Apart from the obvious fact that you are a bit closer to death, it’s not that bad being old. Even if not everyone can complete a triathlon, most people maintain (self-assessed) good health to age 85 and beyond, In most developed countries, old people can live a reasonably comfortable life without having to work. And on average, that’s reflected in measures of happiness.

Yet, at least in the Anglosphere, old people don’t seem to be happy in political terms. It’s voters over 65 who provide the core support for conservative parties and are most likely to welcome the drift to the far right represented by Trump and his imitators.

The pattern is particularly striking in the UK where the YouGov poll shows the right and far-right leading easily among voters over 65 (37% Tory + 28 % Reform), while gaining essentially no votes from those aged 20-24, where the Tories tie for 5th place with the SNP, behind Labor, Green, Reform and LibDems https://yougov.co.uk/politics/articles/48794-voting-intention-con-20-lab-46-28-29-feb-2024 [2].Presumably that reflects Brexit, a particularly irresponsible piece of nostalgia politics inflicted mostly by the old on the young.

But it’s the same in the US, Canada, Australia and (though mainly among women) New Zealand. While there has always been a tendency for old people to support the political right, it’s more marked now than it has ever been. And as is particularly evident with MAGA, there’s nothing conservative about this kind of politics. Its primary mode is authoritarian Christian nationalism.

In part, I think this reflects the increasing dominance of culture war issues, where views that were dominant 50 or 60 years ago are now considered unacceptable. Old people whose views haven’t changed in many years are likely to support the right on these issues.

I’d be interested in any thoughts on this.

fn1. Not expecting to do well, thanks to the hottest and stickiest summer I can remember, but I plan to finish.
fn2. A poll last year had the Tories on 1 per cent among young voters.

My latest in The Conversation via my Substack

If you believe Newspoll and the Australian Financial Review, Australia wants to go nuclear – as long it’s small.

Newspoll this week suggests a majority of us are in favour of building small modular nuclear reactors. A poll of Australian Financial Review readers last year told a similar story.

These polls (and a more general question about nuclear power in a Resolve poll for Nine newspapers this week) come after a concerted effort by the Coalition to normalise talking about nuclear power – specifically, the small, modular kind that’s meant to be cheaper and safer. Unfortunately, while small reactors have been around for decades, they are generally costlier than larger reactors with a similar design. This reflects the economies of size associated with larger boilers.

The hope (and it’s still only a hope) is “modular” design will permit reactors to be built in factories in large numbers (and therefore at low cost), then shipped to the sites where they are installed.

Coalition enthusiasm for talking about small modular reactors has not been dented by the failure of the only serious proposal to build them: that of NuScale, a company that designs and markets these reactors in the United States. Faced with long delays and increases in the projected costs of the Voygr reactor, the intended buyers, a group of municipal power utilities, pulled the plug. The project had a decade of development behind it but had not even reached prototype stage.

Other proposals to build small modular reactors abound but none are likely to be constructed anywhere before the mid-2030s, if at all. Even if they work as planned (a big if), they will arrive too late to replace coal power in Australia. So Opposition Leader Peter Dutton needs to put up a detailed plan for how he would deliver nuclear power in time. cr

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So why would Australians support nuclear?

It is worth looking at the claim that Australians support nuclear power. This was the question the Newspoll asked:

There is a proposal to build several small modular nuclear reactors around Australia to produce zero-emissions energy on the sites of existing coal-fired power stations once they are retired. Do you approve or disapprove of this proposal?

This question assumes two things. First, that small modular reactors exist. Second, that someone is proposing to build and operate them, presumably expecting they can do so at a cost low enough to compete with alternative energy sources.

Unfortunately, neither is true. Nuclear-generated power costs up to ten times as much as solar and wind energy. A more accurate phrasing of the question would be:

There is a proposal to keep coal-fired power stations operating until the development of small modular reactors which might, in the future, supply zero-emissions energy. Do you approve or disapprove of this proposal?

It seems unlikely such a proposal would gain majority support.

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Building nuclear takes a long time

When we consider the timeline for existing reactor projects, the difficulties with nuclear power come into sharp focus.

As National Party Senate Leader Bridget McKenzie has pointed out, the most successful recent implementation of nuclear power has been in the United Arab Emirates. In 2008, the UAE president (and emir of Abi Dhabi), Mohamed bin Zayed Al Nahyan, announced a plan to build four nuclear reactors. Construction started in 2012. The last reactor is about to be connected to the grid, 16 years after the project was announced.

The UAE’s performance is better than that achieved recently in Western countries including the US, UK, France and Finland.

In 16 years’ time, by 2040, most of Australia’s remaining coal-fired power stations will have shut down. Suppose the Coalition gained office in 2025 on a program of advocating nuclear power and managed to pass the necessary legislation in 2026. If we could match the pace of the UAE, nuclear power stations would start coming online just in time to replace them.

If we spent three to five years discussing the issue, then matched the UAE schedule, the plants would arrive too late.

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Read more: Dutton wants Australia to join the “nuclear renaissance” – but this dream has failed before

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It would take longer in Australia

Would it be possible to match the UAE schedule? The UAE had no need to pass legislation: it doesn’t have a parliament like ours, let alone a Senate that can obstruct government legislation. The necessary institutions, including a regulatory commission and a publicly owned nuclear power firm, were established by decree.

There were no problems with site selection, not to mention environmental impact statements and court actions. The site at Barakah was conveniently located on an almost uninhabited stretch of desert coastline, but still close enough to the main population centres to permit a connection to transmission lines, access for workers, and so on. There’s nowhere in Australia’s eastern states (where the power is needed) that matches that description.

Finally, there are no problems with strikes or union demands: both are illegal in the UAE. Foreign workers with even less rights than Emirati citizens did almost all the construction work.

Despite all these advantages, the UAE has not gone any further with nuclear power. Instead of building more reactors after the first four, it’s investing massively in solar power and battery storage.

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Time to start work is running out

The Coalition began calling for a “mature debate” on nuclear immediately after losing office.

But it’s now too late for discussion. If Australia is to replace any of our retiring coal-fired power stations with nuclear reactors, Dutton must commit to this goal before the 2025 election.

Talk about hypothetical future technologies is, at this point, nothing more than a distraction. If Dutton is serious about nuclear power in Australia, he needs to put forward a plan now. It must spell out a realistic timeline that includes the establishment of necessary regulation, the required funding model and the sites to be considered.

In summary, it’s time to put up or shut up.