Science not settled, yet still we indulge windfarms
Once upon a time, politics was referred to as the art of the possible. It was less about what was right or best than what could be achieved politically.
Today, the political class has refined that dark art and, like the Cheshire Cat in Alice in Wonderland, has decided that “imagination is the only weapon in the war against reality”.
It removes the constraints of inconvenient truths and unpalatable facts. For the doubters, “experts” can always be enlisted to validate even the wildest fantasies.
Take the government’s latest national energy guarantee contrivance. Even though it requires significantly more wind farms than now and a much increased demand for gas (despite the constraints on its extraction), some pundits say it will allow Australians to have their cake and eat it, too. It will allow us to meet emissions reduction commitments, to deliver reliable electricity supplies and make energy use more affordable. Imagine that. South Australia tried something similar and ended up with the highest retail electricity prices in the world.
Yet, notwithstanding the vagaries of ageing coal-fired generators, the addition of the expensive Snowy Hydro 2.0 and an increased reliance on intermittent sources, we are assured that this time it’s different.
Australia’s emissions reduction policies are in response to what has always been an ideologically charged, fashionable flight of fancy: the imagined danger that industrial “greenhouse” gas emissions lead to catastrophic global warming. Somehow, across time, this became politically accepted “settled science”.
It spawned an industry of crony capitalists and other taxpayer-dependent rent-seekers. But it didn’t stop Mother Nature, independent scientists and scandal exposing the hollowness of the narrative. Rather than withdraw from economically crippling and socially impoverishing emission abatement schemes, the political class just doubles down.
Rational thinkers may ponder what it will take for policymakers to recognise reality. It clearly takes more than the University of Alabama in Huntsville’s 40-year satellite data, which to date has recorded no increase in Australia’s atmospheric temperature.
Likewise, NASA’s recently released global data, which recorded average temperatures for the two years to February this year, shows the biggest two-year drop in the past century. That cooling brought the worst British winter in 42 years, and the related deaths of 48,000, mainly elderly, Britons.
Perhaps this and last year’s Greenland melt season, which was the lowest since 1996, are just aberrations. But then what about the Ross Ice Shelf, the largest of the Antarctic ice shelves, which, contrary to scientific predictions, continues to expand? If sea levels are rising dangerously, why are 80 per cent of reef islands in the South Pacific and Indian oceans stable or growing? And why do the longest continuous Australasian records at Fremantle and Auckland reflect a tendency towards a general slowing in the rise of mean sea level? Perhaps the fact polar bears were listed as endangered in 2008 but have increased in number by more than 30 per cent since 2005 can pass without comment today. But there was a time when this was promoted as emblematic of global warming.
Albert Einstein told us: “Knowledge is limited to all we now know and understand, while imagination embraces the entire world.” Well, we know a lot more than we did 40 years ago.
Climate change advocates may say individual data points are simply isolated weather events, but collectively the evidence is mounting and no longer should be denied. Yet it is. The political class remains unfazed and seems determined to ensure that whatever the latest science may prove, ideology, not economics, will prevail.
It is no mean feat to take a country from being among the cheapest energy markets to one of the most expensive. Confirming the collapse of the low-cost market-based system, in nine years retail prices in the National Electricity Market are up 80 per cent to 90 per cent and wholesale prices have risen 120 per cent since 2015.
The economic cost of emissions abatement policies can be observed in increasing layoffs, relocations and industry closures. The cumulative effect has yet to be felt, but it will be significant and deep, consistent with experience overseas, where higher energy prices have led to many more job losses in the broader economy than have been created in the renewables space.
So where to from here? With the range of renewable energy subsidies paid for by consumers, and state, territory and federal taxpayers running at more than $4 billion a year and likely to remain in force to at least 2030, the outlook is bleak.
With financial inducements and priority to the grid, intermittent energy progressively will crowd out fossil fuel generators. In such distorted markets, new investment in reliable coal-fired power will be uneconomic. Subsidies to would-be clean-coal investors will distort the market further.
Perhaps after 27 years of uninterrupted growth, policymakers are as dismissive of the laws of economics as they are of inconvenient scientific evidence. Going from a virtual debt-free position 10 years ago to a half-trillion dollars and counting is alarming enough. But when the debt is hypothecated to unrealistic expectations of an endless demand for Australian exports, the risks magnify.
Add to this the Bank of International Settlements’ recent observation of record household debt, static real wages, rapid rises in non-discretionary household expenditure and potential interest rate hikes and Australian families have rarely been more exposed to an economic downturn than now.
There is no quick fix. Australia’s manufacturing base has been hollowed out and the mortgage belt is running on empty. This is an ideological mess of monumental proportions and the likelihood of returning the electricity market to some form of normality may well be beyond the political courage of today’s politicians.
Still, as Ayn Rand reminds us, “We can ignore reality but we cannot ignore the consequences of ignoring reality.”