Consultant Dan
15 May 2012
Is Tony Abbott’s vision for Australia future-proof?
This was re-published on ABC Opinion The Drum.
Opposition Leader Tony Abbott is confident that he is going to be our next Prime Minister. If he wins, he might well be PM all the way through the rest of this decade. Before that happens, we need to know, is Mr Abbott’s vision for Australia future-proof?
Based on the opposition leader’s budget reply speech last week, we have reason to be concerned.
The fossil fuel age is drawing to a close, driven both by the threat of climate change and the opportunity of technological progress. Exciting new technologies are changing how we run the grid, power the factories, chill the beer and burn the toast.
Over the next several years the price of solar electricity will beat the price of conventional electricity (from gas and coal) around the world. Solar’s competitive advantage is caused by the progress of the technology, whether or not there is a price on carbon.
This fact is welcomed by every mainstream figure in the energy industry globally. (It is not accepted by Energy Minister Martin Ferguson, but that is another issue.)
Clever countries are embracing solar (and wind and other clean tech). There have recently been announcements of significant government and private investment in renewables in America, China, Germany, Japan, India, Brazil, South Africa and Saudi Arabia.
Germany, America and Japan are racing to capitalise on their early mover advantage in R&D and intellectual capital. China, India, Brazil and Saudi Arabia are seeking late mover advantage, for example in scalability and manufacturing competitiveness.
Unfortunately the Liberal party is now riven by a factional split that makes it hard for the party to keep pace with reality. The mainstream faction believes in (climate) science and (renewables) technology. The extreme faction believes that science and technology are part of a global conspiracy to wreck western civilisation.
One of the extremists is Alby Shultz, who has accused climate science of being Nazi science and believes that in-audible sounds generated by windmills are causing disease and death.
The extreme faction had its first historic win in Victoria, where it convinced Premier Ted Baillieu to ignore the scientific evidence and impose the most draconian, anti-wind laws in the free world.
Consider what Mr Abbott did not say in his budget reply speech. He made not one mention of science, innovation, research or universities. This is a problem because the new energy economy is being created now, invented by university researchers and commercialised by the smartest technology firms.
Mr Abbott also declined to mention the key technological issues: solar, wind, electric vehicles, peak oil, petrol prices, smart grid, nuclear decommissioning or energy storage. This is a problem, because these are the drivers shaping the new energy economy of the 21st century.
What did Mr Abbott say? He said:
The Coalition will reward conservation-minded businesses with incentives to be more efficient users of energy and lower carbon emitters. Our policy means better soils, more trees and smarter technology – unlike the carbon tax which is socialism masquerading as environmentalism.
(The Australian Financial Review’s Geoff Kitney called the Tony Abbott speech “one of the most vacuous budget reply speeches ever delivered by an opposition leader.”)
This is presumably Mr Abbott’s dog whistle to the extreme faction, to prevent them from leaving the party and forming a new version of One Nation. It is as if to say, ‘Yes, I agree that the Cold War is still going on and electric cars, windmills and climate science are the Communist vanguard, out to get you!’
The truth is far less extreme. A price on carbon is a quintessentially capitalist policy. It originated on the conservative side of politics, with thinkers such as climate spokesperson Greg Hunt, who wrote his University thesis on it. It is the economic rationalist’s solution to climate change. The green movement took up the carbon price, to win over business and get support across the political spectrum. It was never the natural policy approach for greens.
For a conservative party to now reject the economic rationalist policy of a price on carbon is an intellectual betrayal and a Great Big New Lie. (It reveals that many conservative intellectuals lack a rational, coherent view of the world, but that is another story.)
In the past, the Liberal Party was the party of business. When I talk to energy and technology companies, it is surprising that many of the smartest companies and people in business are concerned by the rise of anti-science extremism in the Liberal Party.
The leader of the mainstream faction of the Liberal Party is the former leader, Malcolm Turnbull, but there are other brilliant rising stars also. Last week the NSW Parliamentary Secretary for Renewable Energy, Rob Stokes, spokes to a national forum on community renewable energy in Sydney. Stokes demonstrated that he respects the mainstream of science, technology and economics.
Mr Stokes cited ‘Darkest before dawn’, a recent report from McKinsey & Company, which is perhaps the most elite and well respected business consulting firm in the world. The report found that solar is already competitive with coal in some markets and its price will fall another 40% by 2015. Solar could be worth US$1 trillion over the next 8 years, with an economic potential at 2020 of 1 million megawatts.
These facts drive the Liberal’s extreme faction bezerk. They probably think McKinsey & Co is part of a deep green conspiracy, along with those closet communists at KPMG and the socialists at HSBC, who all agree that solar is out-competing coal!
Smart, mainstream firms are already investing in solar: Google, General Electric, Toyota, Berkshire Hathaway, Total Oil, Areva and the list goes on.
This technological innovation beyond dirty coal is a classic dynamic of capitalism itself. It is this restless process of creative destruction that makes capitalist economies so dynamic. If the Liberal party is against renewable energy innovation, then it can’t really call itself a capitalist party any more. It is, rather, a protectionist party.
While Mr Abbott is campaigning to become Prime Minister, he will try to cover up the cracks between the mainstream and extreme factions of the Liberal Party.
But as PM, Mr Abbott will be making decisions every day. This will force him to decide, does he put his faith in science, engineering and economics, or conspiracy theories? Will he protect the interests of the whole Australian economy and society, or just the interests of billionaire miners who deny climate science?
Does the contemporary Liberal party support business, or just business-as-usual?
Thank you, Daniel, for your encouragement and for sharing your knowledge about energy.
I think everyone would agree agree with you that the critical technological breakthroughs we need are systems to balance demand and generation on a majority renewable energy grid.
Nobody has the answer yet, as you point out.
The CRE forum Sydney 2 weeks ago had a presentation about smart grid, from Essential Energy – see www.intelligentnetwork.com.au
You may know already that Essential’s engineers have invented what they call a ‘smart inverter’ power smoothing unit about the size of a phone booth. My understanding it is includes batteries, inverter and reactive power source, with smart computer controllers and has been used to hold up voltage in SWER lines.
Essential is now testing these units in mesh networks, along with other things, such as domestic battery storage, demand management interfaces for consumers, commercial scale PV arrays (up to 20kW) etc.
The next stage, the Intelligent Network Community Program, goes live in July, in Bega, NSW. I look forward to seeing the results of this research.
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This is an excellent article, both in substance and style. My only, albeit minor, reservation is the lack of mention of the need for further development of green technologies to provide base load generation. This could be any combination of storage with solar thermal, geothermal and energy storage, the latter latter including batteries in electric cars. High efficiency distributed fossil fuel generation with heat recovery, eg, fuel cells could also play a role.