On Jonathan Moylan and the Whitehaven coal hoax

The latest in a long line of Aussie hoaxes was perpetrated to great effect this week though its creator might yet pay a penalty of ten years and half a million bucks. Anti-coal activist Jonathan Moylan is in the wars for putting out a press release in the name of ANZ Bank on Tuesday. The release said the bank was divesting its $1.2b loan to Whitehaven Coal for its Maules Creek Coal Project. It was an important announcement. In Whitehaven’s own words, Maules Creek is “one of only a few remaining tier 1 undeveloped coal assets in Australia. It is also one of the largest coal deposits in Australia with 362 Mt of recoverable reserves.”

Photo credit: ABC TV News

Before it could be exposed as a hoax, it triggered a stock market collapse for the coal company. While almost all of the losses were subsequently recovered before the day was out, Moylan’s actions raises serious political as well as ethical and legal issues. Using dubious means, he focussed attention on the important question about whether we should be investing in major coal projects in a time when fossil fuel emission is the biggest issue we face as a species.

Maules Creek is in the heart of the rich Gunnedah Basin in NSW. That state and Queensland produce 97 percent of Australia’s black coal. It is an industry in decline with Australia producing 405 million tonnes of raw black coal in 2010-11 down from 471 Mt. in 2009-10. Yet Australia remains the world’s fourth largest coal producer and the world’s leading exporter with markets in Japan, South Korea, China, India and Europe. Coal fired generators are leading contributors (20 percent) to a greenhouse effect as heavy-grade emitters of carbon dioxide and methane into the atmosphere.

The Centre for Climate and Energy Solutions acknowledges fixing the coal issue will be difficult. Coal is cheap, is important for meeting energy needs in the developing countries, and has good lobby groups in countries like the US, which is the “Saudi Arabia of coal.”  Coal-fired generators could still play a role if carbon capture and storage (CCS) technology ever takes off, possibly 10-15 years away.  There would also be a need for a carbon market, priced at around $30 a ton of CO2 and a way of retrofitting CCS into existing technology.  An ANZ that truly considered its customers interests, would ensure such boxes were being ticked. But it has no plans to do so and there is no scrutiny of whether such interests are considered.

Instead, the argument focussed on Moylan with those dividing into two sides on whether his hoax ends justified the means. Those that supported him like Bob Brown identified Moylan’s action as a necessary civil disobedience that brought out in the open ANZ’s investment in coal.  That brought out the coalition’s Eric Abetz saying the ends did not justify the means. He turned it into an attack on Lee Rhiannon and the Greens’ “extreme political tendencies.”

Whoever is right, there is one thing for certain - Moylan planned his attack well. He put together a fake ANZ press template, a website and dummy email inbox online. The press release was a remarkable use of managerial language to frame an argument that would be quite unusual and brave in an Australian business context. Moylan used the voice of ANZ Corporate Communications to announce the bank would not support the project. Toby Kent, “Group head of corporate sustainability” was quoted to say the company wouldn’t invest in coal projects that cause “significant dislocation of farmers, unacceptable damage to the environment, or social conflict." The decision was made after “a careful analysis of reputational risks and analysis of the returns on this mine in the current climate of high volatility in the coal export market.”  The released concluded with the statement ANZ was undertaking “a review of coal and gas investments on productive agricultural lands and areas of high biodiversity.”

Moylan’s fake ANZ release was quickly picked up by AAP Newswire who failed to conduct any of the basic identity checks that would have exposed the hoax. At the bottom of the emails are phone numbers for Toby Kent and Joanne McCulloch “Media Relations Advisor” which if anyone had bothering phoning would have quickly exposed this email as a hoax.  Either that or a quick check of ANZ’s database of media releases would have been enough to dispel, or at least doubt, the information.

Instead AAP swallowed the news whole and provided it directly to the markets. When traders in the Australian Stock Exchange saw the newswires shortly after midday Tuesday, they went ballistic. Whitehaven bore the brunt as 85% owners of Maules Creek Coal. Maules Creek is 18km north-east of Boggabri on the Kamilaroi Highway between Narrabri and Gunndah. It is also just 16km from the railway line servicing the coal terminals at the Port of Newcastle, 360km to the south-east. Maules Creek’s current resources are expected to support a large open cut mining operation for 30 years at an average saleable coal production rate of 10.8 million tonnes per annum (Mtpa). Subject to approvals, the first coal production will commence in mid 2013, with saleable production exceeding 10Mtpa from 2016 onwards.

But it was a dead duck without ANZ’s investment, and within minutes Whitehaven shares plunged almost 10 percent from $3.52 to $3.21. Whitehaven Coal lost more than $276 million in market value. It capped off a bad year for the company since it merged with Nathan Tinkler’s Aston last April giving him 19.4 percent ownership. The share price has lost over half its value since then with CEO Tony Haggarty and the board blaming it on uncertainty due to Tinkler’s financial woes  - they want him to divest to institutions. Tinkler was quick to return fire on Haggarty and the board saying he wanted to increase his holding not decrease it.

That plan may be in tatters after Tuesday. The price did not recover until the real ANZ responded with a media release (pdf) entitled “Fraudulent media release regarding Whitehaven Coal”. This release (which looked remarkably like the fraudulent one) said ANZ remained “fully supportive of Whitehaven Coal.”
At the end of trading, Whitehaven was just 2c down on the day reflecting the fact there were other issues with the project. The damage done to Tinkler, was variously estimated to be anywhere between $50m and $180m (assuming it wasn’t him who picked up the shares when they were on the rebound).

Whatever the damage to Tinkler or Whitehaven, Moylan will suffer significant collateral damage. There is a strong prima facie case his actions were illegal according to Section 1041E of the Corporations Act 2001 (Cth).  That act states it is an offence if a person makes a knowingly false statement that is likely to make people dispose of shares. The maximum jail term for individuals is 10 years, with fines of up to $495,000. Organisations face fines of up to $4.6 million.

The Australian Securities Investment Commission said it would be investigating whether there had been a breach of Corporations Act rules on false or misleading statements. According to dean of law at the University of Western Sydney Michael Adams the legislation that deals with corporate fraud imposes a high penalty on false or misleading statements about traded securities on the ASX. Adams believes a successful prosecution will hang on the difference between a public nuisance and civil disobedience. “A protest normally provides publicity for a cause and brings the matter to the general public’s attention, but causes little harm to the community,” Adams said. “A fraud – and in particular one that impacts on the share market – has huge consequences”.

Research fellow on ethics Edward Spence picked up on Abetz’s argument about the ends and the means. Spence said Moylan’s ethical failings were harmful to the “integrity of the digital informational environment”. This is the environment whose trustworthiness, Spence said “we all rely on to conduct our legitimate informational transactions.” We are not only biological beings, he said but also and increasingly informational beings. “When the informational environment is harmed we are also harmed.”

Spence may be exaggerating the harm here as it ignores the fact that checks and balances such as AAP did not do its job properly. Nor did any of the rest of the media use the hoax to expose ANZ's dealings with the coal industry. Why didn't anyone ask the bank if they would do "a review of coal and gas investments on productive agricultural lands and areas of high biodiversity".Why is it acceptable for the bank to continue to invest in projects that cause "significant dislocation of farmers, unacceptable damage to the environment, or social conflict?"

We're waiting.

Draft Surat Underground Water Impact Report - part 3: Bubbling gas issues

In the last couple of days, the Lock the Gate Alliance which represents a coalition of landholders opposed to coal seam gas in the Surat Basin released a video called Condamine River Gas Leak. It shows footage from an organisation called Gasileaks taken along the River at an “undisclosed location”. There was bubbling activity at the surface of the river and some kind of meter that went berserk when placed near the bubbles.

Frackman in Roma July 2010

The footage was filmed by local landholder Dayne Pratzsky who has been a long-term vocal critic of the industry. I remember Pratzsky as “frackman” for his wonderful attention-grabbing outfit he wore  when he heckled the State Government Community Cabinet in June 2010.  When we published the Lock the Gate footage on our Facebook page today (without comment),  a local man named Andrew Thomas pointed out this phenomenon was not uncommon in the gasfields region. “I grew up at a location near Orallo and all the bores would light up if you wanted them to - the gas comes out of most bore holes,” Andrew said. “It has been happening for well over 150 years around Roma and Surat and lots of other places - get a life and move on.”

It might be difficult for Pratzky and other blockies in the Lock the Gate Alliance to do exactly that. This is their life and they don’t want to move on. Yet I fear they – and others who want a moratorium of the industry – are placing themselves too far outside the conversation about how the industry should evolve. Origin Energy, the petroleum tenure holder in the location where Pretsky filmed (a fishing spot south west of Chinchilla known as the "coal hole") confirmed what Thomas told the Western Star on Facebook “According to local knowledge it goes back at least 30 years and naturally occurring gas has been a phenomenon in the Queensland Western Downs region for more than 100 years,” Origin said.

The public face of Lock the Gate Alliance is its media-savvy president Drew Hutton. He was the one who publicly announced  the Chinchilla leak.  Hutton, a prominent member of Queensland Greens, said he was unconvinced by Origin’s response and challenged them to prove it. Hutton said Origin should “release its seismic and other data...to establish whether or not the leak is linked to the company's coal seam gas operations.” Hutton said he consulted “several highly competent hydrogeologists” who told him there was a good chance the leaks were “linked to the de-watering of the coal seam aquifers and possibly fracking opening up pathways for the methane.” 

With neither Origin nor Hutton willing to offer their sources, it is difficult to know who is right. And water quality remains one of the great unknowns of this massive new industry. Yet this problem can be solved just as land access and now water depletion. The 2010 Queensland land access laws redressed the power imbalance between gas companies and landholders and the new Draft Surat Basin Underground Water Impact Report  which I reported about on Monday (Part 1) and Tuesday (part 2) deals with the water depletion issue. The report specifically ruled out a role for monitoring water quality. That prompted an anonymous respondent to my Tuesday piece to ask the legitimate question: if "It will not monitor water quality (eg for contamination from fracking)", who WILL monitor water quality?  

The answer to that question is the same as the answer to who will monitor water depletion: a mix of the Queensland Government Department of Natural Resources and Mining and the petroleum tenure holders themselves. Many in the Roma forum on the report I attended asked if this was not leaving the fox in the charge of the henhouse. The Queensland Water Commission’s response to that was to say, if they did something wrong, they’d be found out. There would be anomalies in the results that would stand out.

If this is correct then we need to maintain trust. Trust of the companies to do the right thing and trust of the regulator to pick up the anomalies if the companies don’t do the right thing. The gas majors all have the profit imperative but are bound by a number of strict rules and environment conditions they have to satisfy to get the green light for their enterprises. With the pressure to meet their export commitments once the gas comes online in 2014, those companies will need to ensure they are squeaky clean so the regulator does not have a reason to hold them up.

What does need to be looked at is the quick gobbling up of Australia’s natural resources.  According to mining critic Paul Cleary, Australia has the 12^th largest reserve of gas but is the world’s second largest exporter and heading towards number one. Gladstone Port in Queensland is the home of four of the eight big LNG plants and Incentives by the Bligh Government drove gas consumption for the local market. Now the high price of oil is driving this massive investment in coal seam methane for LNG. The problem is the price of natural gas on the New York-based Henry Hub has been declining for over a year and will mean the companies will have to reforecast earnings or else dig for more gas.  

With governments greedy for the royalties, knowing when that saturation point comes will be critical for the success of the industry and the regions they serve. As the Surat DWIR proves, having good legislation supported by science will be critical in keeping an even keel.

South Korea will start carbon trading from 2015

This week South Korea became the latest country to announce a carbon emission trading system. The Korean ETS will start in 2015 and country is the first in Asia to announce such a scheme. As Australia’s fourth largest trading partner with a two-way trade of $31.9 billion in 2010-11, the move puts a further lie to the idea an Abbott Government will rollback the carbon tax if it wins office in the next 12 months.  The Korean strategy plans for the republic to become one of the top seven ranked green economies by 2020 and one of the top five by 2050.

Unlike Australia where the issue has been politically divisive, the Korean bill was passed unanimously in a 148-0 vote with 3 abstentions. Companies that emit 125,000 metric tons or more of carbon dioxide a year will be subject to Korea’s cap-and-trade system, along with factories, buildings and livestock farms that produce at least 25,000 tons of the gas annually, according to the bill.  

Not surprisingly the Korean decision has been welcomed by the Australian Government. Climate change minister Greg Combet was quick off the mark with amedia release on Thursday. Combet congratulated the South Korean Government for “taking this important step to drive sustainable growth and reduce greenhouse gas emissions”. Combet said Australia was now one of 34 countries around the world to use emissions trading as the primary vehicle to drive carbon pollution reduction. “We are far from leading the world, as some have claimed,” Combet said referring to Coalition carping that Australia was taking too much of a risk with its tax.

The South Korean cap and trade ETS will cover around 500 of the country’s largest emitters. The Government will set emissions caps and reduction targets for each trading period. South Korea’s carbon price is yet to be determined but the penalty for non-compliance will be capped at $83 a tonne. The environment ministry launched a voluntary “cap without trade” Target Management System this year. But from 2015, the ETS will be mandatory for installations emitting 25,000 tonnes of carbon dioxide equivalent and firms emitting 125,000 tonnes, with smaller entities continuing with the TMS. Three three-year phases are planned, with at least 95% of allowances given for free in the first two.

The bill that passed the national assembly this week was authored by the Green Growth Committee. The GCC was launched by Korean President Lee Myung-bak in 2009. A year earlier, on the 60th anniversary of the founding of Korea, President Lee explained why the ETS was needed. “Green growth is not a matter of choice, but a requirement that we must fulfil by all means for our future survival,” he said. “What matters is whether we can take the lead based on our own original technology, or whether we have to lag behind other countries.”

South Korea was the world's eighth largest emitter of carbon in 2010. In November 2009, the government adopted a medium-term emissions reduction target of 30%, relative to ‘business-as-usual’, by 2020. Just as they have done in Australia, the Korean business community strongly objected saying the plan was over ambitious and would make Korean industry uncompetitiveness. However, the Presidential Committee considered an ambitious target necessary in order to stimulate a broad range of clean technology innovation for greater energy efficiency across the economy, as well as for the deployment of renewable energies.

Korea  enacted legislation in April 2010 to permit the government to intervene in the market “to address market failures in promoting green growth”. The law made provisions for the emissions rights trading system. Sustained industry opposition forced many revisions was followed by inter-party parliamentary squabbles that almost killed the bill. But on 2 May, the law passed during a surprise lame-duck session. The program was passed despite fears it would hurt the economy, because of the long-term benefits to the country’s huge conglomerates from being more energy-efficient and exporting greener goods.

A Walk up Carnarvon Gorge

Situated in pristine country, some 750km northwest of Brisbane is the Carnarvon National Park. The highlight is the astonishingly beautiful Carnarvon Gorge and I did the 240km drive north from Roma today to do some of its walks.





The full walk is over 10kms one way following the Carnarvon Creek with several detours along the way to interesting geology and human formations. I left Roma at 6am and got there at 8.30am. The rangers there recommended against the full walk with a very hot day (> 35 degrees C) expected. I still plumped for a tough 14km walk that took in four of the Gorge's intriguing diversions.




The geology of the area is complex. The white cliffs are sandstone and volcanic eruptions formed basalt caps.








The trail crisscrosses the creek on numerous occasions and it is important to keep an eye on the stones below as you hop across for fear of ending up in the drink.









I decided to go to the furtherest detour first and work my way back. And after 7km of walking I got to the Art Gallery, home to the Aboriginal rock art. Here Indigenous painters used stencils, quartzile tools, hand designs and free painting all the aspects of their lives. The life-size boomerangs, pottery, kangaroos and emu eggs are matched with a collection of vulvas unknown elsewhere in Aboriginal art. The thousand-year old stencils mix with more recent European etchings as people still want to leave their mark.




Next stop back is Ward's Canyon. The canyon is named for two brothers who camped here while trapping possums in the 1910s. The canyon is known for its tree ferns and king ferns. The king ferns are particularly impressive and this is only place away from the Australian coast you can find the threatened species. The two metre-long fronds rely totally on the water supply to keep them erect.





As the time crept towards midday, the sun was almost directly overhead making shade difficult to find and walking a hot and sweaty exercise. Plenty of water was required though the rangers don't recommend you drink the creek water.

















The third stop is the amphitheatre. The shape of the entrance (reached by 50 steps) is a clue perhaps as to why the Aboriginal graffiti was full of vulvas in this area.




















The amphitheatre is a magical spot. Like the Gorge, the amphitheatre was formed out of the erosion soft sandstone by the relentless forces of water. It is not hard to be awed by the spot and its cool shade was greatly appreciated today.














The last stop was the Moss Garden. The sandstone soaks up rainwater like a giant sponge. When the water meets an impenetrable layer of shale, the water moves sideways and trickles out from the wall. The constant moisture sustains a green oasis of mosses, ferns and liverworts. After 4 hours and 15km of walking in the hot sun, it was a relief to get back to base. The Carnarvons are a walker's paradise - but there is a reason it was quiet today. The tourist season is from April to October, when the temperatures are at least 15 degrees cooler.

Disturbing Durban: The world starts to act on climate change

The tag line for the Durban Conference was "Climate Change in balanced fashion". That these corporate wankwords hide as much as they reveal was shown in the angry environmentalists' respone to the conference. Those who can see we are in a spot of bother are spitting chips over the Durban agreement. We cannot afford no action until 2020, they said.

The consequences to the planet of a “gaping 8 year hole” are potentially catastrophic, particularly as the likely outcome is a further increase in carbon emissions in the short term. But while they are right, the Greens are showing their usual tendency to forget realpolitik: this latest deal is as good as the governments of the world were willing to give at the time, giving their widely differing places at the table. This is not no action and the agreement builds on the small steps taken at Bali, Copenhagen and Cancun agreements to give a roadmap towards worldwide reductions in 2020 and that is mostly a good thing.

There are things the Greens are right to be angry about. Sea level rises caused by warmer temperatures will continue long after the oven is turned down in 2020. There is also the prospect of mass species extinction. Current best estimates have atmospheric carbon dioxide concentration expecting to exceed 500 parts per million and global temperatures to rise by at least 2°C by 2050 to 2100. These values significantly exceed anything in the least the past 420,000 years during which most of our marine organisms evolved.

Earth relies on the greenhouse effect to sustain life. But CO2, methane and nitrous oxide all absorb infrared energy and keep heat energy on Earth and all are on the increase. The effects are varied: the North West Passage is becoming seaworthy again, the 3250 sq km Larsen B ice shelf disappeared in a month in 2002, glaciers in Argentina and Chile are melting at double the rate of 1975 while sea temperature rises are threatening coral reefs across the world.

Even modest increases in sea levels could cause major flooding in many of the world’s low lying megalopolises. If there is a rise in sea levels of 0.5m, the Majuro Atoll in the Pacific Marshall Islands would mostly disappear. If the sea level rises by 1m, one fifth of Bangladesh goes under as would 13 of the world’s 15 largest cities. If the unstable West Antarctic Ice Shelf replicated the behaviour of Larsen B, sea levels could rise 3m. If Greenland once again resembled its name it would add 7m to water levels.

This picture is a New York with a 5m rise, not beyond the bounds of possibility though the IPCC Fourth Assessment Report worst case scenario only allows for a maximum of 0.6m to 2100. The report also acknowledges global emissions will grow despite mitigation measures. Even at the likeliest levels of 0.3m in 2100, that rise is enough to obliterate many island nations. Without the power to influence conferences except by emotion, the islanders' biggest challenge will be to preserve their nationality without a territory. Believing such a loss ia temporary has lawyers rushing to the Law of the Sea and the UN Convention to see how such states could survive “in exile”.

Despite the depression that starts this kind of thinking, this is profoundly optimistic in the long term. It speaks to the unending human belief we can fix any problem, including ones caused by our own actions. The annual Climate Change Conference is like a large ship with a slow turning circle. But it is slowly taking effect. The year 1990 is used as the benchmark year for all emissions as this was around the time science realised there was a major problem. It was also the year UN-steered climate change negotiations started. No-one cared at first. In the 5 years after 1990, carbon emissions worldwide increased from 1 billion tons to 7 billion tons.

20 years down the track, the scientists still have difficulty selling their message, if some sections of the right and the media are to be believed while on the other side, the Greens thinks we are not moving fast enough. Yet recent International Energy Agency data shows global action is beginning to work. Countries who participated in the Kyoto Protocol were 15% below their 1990 levels two decades later. The problem is the Kyoto non binding countries led by China and the Middle East have greatly expanded their emissions in that time.

This is why a global agreement iis so important. The developing countries have a good point the West has caused more emissions. But they have learned quickly from Western technology and China is now the world’s biggest emitter. An agreement of “annex” and “non annex” countries no longer makes sense.

This is why China and India ultimately signed the agreement. Let no one underestimate what was achieved.It is the first global deal that scales back our fossil fuel economy. 2020 is a long way away and there will be more eight more meetings and eight more frenetic all-night negotiations as nations and economic blocs jostle for position in the brave new world of a post-carbon economy. But the decision offers a clear signal the ship is turning and passengers need to look the other way. The markets will now do their bit by promoting investment in industries that best fit the new model.

If the Greens are impatient we are not turning fast enough, then rightwing groups such as the Australian Coalition are determined to steer straight ahead regardless. Abbott’s claim the carbon tax is an “international orphan” is wrong on at least three counts: Australia is not the only country to price carbon, it will be a necessary requirement to send the right market signals to move to renewables, and its overgenerous compensation will mean that it will have little genuine effect on the nation’s massive fossil fuel industry in the short term. By 2020, the world will still be warming to dangerous levels. But an agreement is now in place to deal with the problem. And Australia has an enforcing mechanism. Whether that is all too little too late is for our grandchildren to judge.

Australia puts high speed rail back on track

The Federal Minister for Infrastructure and Transport, Anthony Albanese, invoked the spirit of a wartime Prime Minister when he announced a new report into high speed rail in Australia today. “I wonder what one of our most revered leaders, Ben Chifley a former train driver would make of high speed rail?” Albanese asked. “As one of the greatest nation builders of the 20th century, I am confident he would have seen its potential and the possibilities it could bring.” As a topic that has been around for decades, Albanese said he looked forward to the national conversation on the topic. “It’s a conversation the Government wants to have with the community,” he said.

The report for phase one is part of a two phase strategic study into a high speed rail network (HSR) on the east coast of Australia. The study looks at potential routes from Brisbane southwards to Sydney, Canberra and Melbourne, as well as the economic viability of such a network. It talks about likely corridors, options for station locations, high level costs, and forecasts about patronage, and comparative analysis of potential social and regional development impacts. Albanese has asked for feedback on the report in the next two months.

According to the Executive Summary (pdf) the study is divided into two phases. The first phase looks at costs, corridors and demand while a future phase two will look at financial feasibility, best route alignment and patronage and cost estimates and potential financing options.

At this stage, the total cost of the project is estimated as anything from $61 billion to $108 billion depending upon the corridors selected. The costs include land acquisition, stations and city access, maintenance and stabling facilities, power infrastructure, civil and rail infrastructure and IT and ticketing systems. They exclude management costs (add another 15%) and operating costs. The four corridors considered are Brisbane to Newcastle via the coast, Newcastle to Sydney, Sydney to Canberra and Canberra to Melbourne. Urban access would be by tunnel and stations would need to be in the central business district of each city.

Regional stations would be at Gold Coast, Tweed, Coffs Harbour, Gosford, Wollongong, Mittagong, Wagga, Albury and Shepparton. The Newcastle to Brisbane link is by far the most expensive leg probably due to the need to get through the mountainous Scenic Rim area on the NSW-Queensland border.

The report said people make over 100 million long distance trips on the east coast of Australia each year, and this is set to grow to 264m trips over the next 45 years. By 2036 54 million people may use an HSR network each year. The study showed inter-city non-stop running times could be around 3 hours between Brisbane and Sydney and Sydney and Melbourne, 40 minutes between Newcastle and Sydney and One hour between Sydney and Canberra. The network infrastructure would be a double-track standard-gauge electrified line with maximum operating speed of 200 km/h in the cities and 350 km/h outside. Services would be operated by eight car sets moving to 12 or 16 depending on demand.

The report identified five key issues for resolution in phase 2. These are 1. Overcoming the topographical and environmental constraints of the Sydney to Newcastle leg 2. Determining if the Sydney station is in the CBD (more costly) or in Homebush or Parramatta (reducing patronage) 3. Fitting in the Illawarra region despite its geographical challenges 4. Determining if Melbourne Airport will be on the route 5. Determining if Canberra is on the main line or on a branch.

The next phase is a Phase 2 report, due in 2012. If approved, services may be running between Sydney and Newcastle by 2020 and Melbourne and Sydney by 2025.

Garnaut Review favours carbon price over direct action

Those fighting tooth and nail against the carbon tax found their justification on Page 17 of Ross Garnaut’s 2011 Climate Change Review released today. “Australian households will ultimately bear the full cost of a carbon price,” said Garnaut. The country's biggest selling newspaper, the Herald-Sun’s report on the review chose this sentence as their first direct quote from the review. Opposition leader Tony Abbott also used it as his headline quote from the 40-page summary update to the review. The reason why is obvious: it is the line that causes maximum political damage to Prime Minister Julia Gillard as it runs counter to her promise householders would be shielded from the tax.

That this quote is taken out of context is no surprise in the light of similar shenanigans, nor it is that the one sentence that has immediate political implications be lifted above all others in a considered economic tract about the future. As British former Tory MP Iain Dale found out when he went to parliament today, this country does a poor line in genuine debate and the response is as Professor Garnaut must have feared. When the political game is expediency above everything and the media game is primarily about conflict, a reasoned document such as this will get short shrift. The future seems very far away when there is so much shit-stirring to do in the present.

The future is very much on Garnaut’s mind. He begins by bringing the science up to date from his last review in 2008. There is a statistically significant warming trend and it did not end in 1998 or in any other year. If anything science says matters have gotten worse since 2008 and its prognosis of drastic global warming is now established beyond reasonable doubt. The projection of Australia’s emissions trajectory if nothing is done to change behaviour has grown to 24 per cent above 2000 levels (a 4 per cent above the levels expected in 2007). As Garnaut says “this will not be easily understood by other countries and is likely to bring Australian mitigation policy under close scrutiny.”

All countries will closely examine each other’s efforts to confirm that each is contributing its fair share. China is on a fastpath towards climate action and has also achieved considerable success in the implementation targets with widescale regulatory changes in energy and innovation. The Cancun Agreement has pledged Australia to 2020 targets of –5% to –25% of 2000 emissions with a review in 2014. Garnaut said it was in the country’s national interest in in effective mitigation to make the emerging arrangements work.

He then went on to look at the two models to reduce carbon emissions: a market-based approach, built on a price on emissions; and a regulatory approach, or direct action. In the market-based approach, carbon can be priced either by fixed-price schemes (carbon taxes) where the market decides how much it will reduce the quantity of emissions or by floating price schemes (ETS) win which permits to emit are issued up to a set limit. The permits are tradeable so the market sets the price. In the alternative route, regulation or direct action, there are many ways that government can intervene to direct firms and households to go about their business and their lives.

Garnaut much prefers the carbon price option. For one, it raises considerable revenues that can buffer the transition. Much of this revenue could be used to reduce personal income tax rates on households at the lower end of the income distribution and would encourage labour force participation. Some revenue should also be used to purchase carbon credits from the land sector and also to support the business sector to innovate emissions-reducing technologies. It has less short-term negative effects on productivity growth and incomes than "direct action". The other problem with direct action is that it relies on the ideas of a small number of politicians and their advisers and confidants who would be subject to lobby pressure. “While some of these ideas might be brilliant,” Garnaut said, “they would not be as creative or productive as millions of Australian minds responding to the incentives provided by carbon pricing and a competitive marketplace.”

Electricity prices will go up in that marketplace, but not as much as they went up after 2006 due to distortions in price regulation of distribution networks. There would also be compensation, which did not occur in 2006. Garnaut suggests a starting price of carbon in mid-2012 as $20-$30 rising at 4 percent a year. An ETS of some sort will be needed to be administered by an independent authority such as a Carbon Bank. By 2015 agriculture will need to be brought into the fold, perhaps in line with New Zealand’s plans to do exactly that.

Garnaut does indeed say householders will bear the full cost of a carbon price as international markets will determine returns to capital. But this is why “it makes sense from equity and efficiency perspectives for households to ultimately receive the vast majority of the carbon pricing revenue.” Tax cuts will assist household to spend money on goods and services that embody low emissions and at the same time the carbon price will set off a supply side adjustment to enable low cost emissions reductions.

Its not in the review papers but Garnaut has this to say about those who say Australia is a small contributor to the world's emissions and should not take the lead. “We matter even on climate change, even though our emissions are only 1.5 per cent of the world’s, just like the UK matters with its 1.7 per cent.” The Tory-led British Government has pledged to cut carbon emissions in half by 2025. That is “direct action” Tony Abbott and the anti-carbon tax cheer squad would have nightmares over.

BTEX throws a spanner in the Queensland CSG works

The fraught relationship between mining companies and landowners in rural Queensland took another blow with the mysterious discovery of an illegal poison in eight Origin Coal Seam Gas drilling wells about 350km west of Brisbane. The find of the banned toxic chemical BTEX last week comes just months after the Queensland Government ordered Cougar Energy to shut down its Underground Coal Gasification plant near Kingaroy when water tests detected similar compounds of benzene and toluene in groundwater monitoring bores.

CSG is a very different technology to the unproven UCG. However, the BTEX find puts a cloud over an industry that is about to take off in the mineral-rich Surat Basin energy province. On Friday Federal Environment Minister Tony Burke gave conditional approval to the GLNG (jointly owned by Santos, Petronas and Total) and BG plan to export $30 billion of CSG to Chinese markets via Liquefied Natural Gas plants in Gladstone in the coming 20 years. Neither company were directly affected by the BTEX find which occurred at eight Australia Pacific LNG (jointly owned by Origin and ConocoPhillips) coal seam gas sites in an area between Miles and Roma.

The industry has been on the defensive over the outbreak. APLNG is likely to be the next major CSG player to have its environmental impact assessment tested by government. Their Environmental Impact Assessment has been with the Queensland Coordinator General Colin Jensen since January this year. Jensen has been holding off his decision awaiting the Federal Government on GLNG and BG. Landholders in particular in coal seam gas areas have not been happy about the impacts to their land and water. Given that Burke imposed more than 300 strict conditions on GLNG and BG, it is likely the Origin/ConocoPhillips project will have to address these also.

The BTEX contamination is an added headache. The problem came to light last Tuesday when Origin released a statement to the ASX saying they had found traces of BTEX in fluid samples taken from eight exploration wells. They said they advised relevant landowners, Western Downs Regional council (but not apparently the Roma-based Maranoa Council which was also affected) and the Queensland government of the find. The company told Queensland Minister for Sustainability and Climate Change, Kate Jones there was no evidence of environmental harm or risk to landholder bores. However Jones has requested confirmatory testing by an independent service provider.

The finds come just days after the Queensland Government banned BTEX from all coal seam gas operations. Minister for Natural Resource Mines and Energy, Stephen Robertson told parliament BTEX petroleum compounds were not used in Queensland CSG operations but have been used in overseas oil and gas operations in the fraccing process. Fraccing is the controversial process that involves pumping fluid at high pressure into a coal seam to fracture the seam to allow gas to flow readily into gas wells. The Australian Petroleum Production and Exploration Association say chemicals make up less than 1 percent of fraccing fluid and the risk to public health at those levels was negligible.

Which is just as well, as BTEX is extremely toxic. As well as being a cancer-causing compound, there is a documented history of harmful effects on the central nervous system. Because of the solubility of the majority of the BTEX components they are also prone to leaching into the underground waterways polluting areas larger than the original contamination site.

BTEX gets its name from its make-up: petroleum compounds containing benzene, toluene, ethylbenzene and xylenes. They are aromatic hydrocarbons which occur naturally in crude oil at low levels. In the 1970s the oil industry invested so heavily in BTEX it comprised 35 percent of all US gasoline (petrol) by 1990. When the EPA found excessive benzene concentrations in city air, the culprit was identified as the aromatics. While the percentage was subsequently decreased, it still makes up a significant component of petroleum.

Origin say they have no idea how it was found at their wells last week but admit it may have been contained in lubricants used at the site. While its use in fraccing is illegal, they may be used on a drill bit which remains legal. APLNG's executive general manager of oil and gas, Paul Zealand told the Courier-Mail the traces were barely detectable, did not enter the water table and may be naturally occurring. "It is isolated from water courses and livestock," he said. "The company will undertake further testing in consultation with landholders in the coming days."

Australian Academy of Science on the science of climate change

In all the frenzy of the last week of a Federal election campaign, a new report from the Australian Academy of Science flew mostly under the radar. The 24-page report, The Science of Climate Change, Questions and Answers is a concise and readable interdisciplinary look at the factors that are impacting climate change. The report acknowledges the difficulty of bringing the different components of the complex climate system together in one model. Yet considerable progress has been made in this direction, the AAS said, and climate change should not be beyond public understanding.

The document’s science is based on four major lines of evidence: the known physical principles of greenhouse gases, the record of the distant past, measurements from the last century, and climate models that use the other three lines of evidence. These models are currently predicting a rise of between 2 and 7°C on pre-industrial levels depending on “depending on future greenhouse gas emissions and on the ways that models represent the sensitivity of climate to small disturbances.”

Even at the 2°C lower end, we can expect nasty repercussions in the form of heatwaves, higher global average rainfall, impacts to marine biodiversity and rising sea levels. But it is at the 7°C end where things get really nasty. All of the 2°C changes will be magnified to a point where the scientists coolly say “such a large and rapid change in climate would likely be beyond the adaptive capacity of many societies and species.”

The report is at pains to show we are not in some natural cycle of warming. Nothing in the last 2,000 years is like the last 100 and if we add another 2-7 degrees it will be like nothing in the last 10,000 years. Data over a million years show Earth’s surface has risen and fallen by about 5°C, through 10 major ice age cycles in that time. As well, feedbacks in the glacial cycle mean there are strong links between global temperature, atmospheric water vapour, polar ice caps and greenhouse gases. In the past million years, the disturbances to the cycle have come from fluctuations in Earth’s solar orbit. In modern times it is human emissions affecting greenhouse gases which reinforce change in the temperature, water vapour and ice caps. Even small influences can amplify into large changes.

The pace of change is also picking up. Average temperatures have increased over the 100 years to 2009 by more than 0.7°C. However the rates of observed near-surface warming has increased since the mid-1970s with the global land surface warming at double the rate of the ocean surface. There has been widespread melting of mountain glaciers and ice caps, particularly noticeable since the 1990s. The Greenland ice sheet and West Antarctica are also losing ice. Ocean levels are now more than 20 cm higher than in 1870.

Australia is not immune to these global trends. Here the average surface temperature has increased by 0.7°C in half a century. There is a continent-wide average increase in the frequency of extremely hot days and a decrease in the frequency of cold days. Rainfall changes are less consistent though it is noticeably declining in southwest Western Australia and the southeast coast. In the oceans, there has been a there has been a southward shift of the Antarctic Circumpolar Current and sea level has risen at a rate of about 1.2 mm per year since 1920, resulting in more frequent coastal inundation events.

Humans are the cause of the problem. Atmospheric concentrations of carbon dioxide, methane and nitrous oxide began to rise two to three hundred years ago at the start of industrialisation and accelerated rapidly in the 20th century. The problem is worsening in the 21st century. From 2000 to 2007 emissions grew by 3.5 percent per year, exceeding almost all assumed scenarios generated in the late 1990s. Deforestation, fossil fuel burning, other industrial sources such as cement production all contribute. Only 45 percent ends up as atmospheric CO2. 30 percent is swallowed by increased plant growth and another quarter is making seawater more acidic.

If “business as usual” levels of emissions continue, the AAS is tipping a doubling of pre-industrial CO2 levels by 2050, and possibly a tripling by 2100. This would produce a warming of around 4.5°C (plus or minus 2.5) to 2100. What this means to climate and sea levels is at best educated guesswork, but all the scenarios put forward are unremittingly gloomy. “The further climate is pushed beyond the envelope of relative stability that has characterised the last several millennia,” concluded the report, “the greater becomes the risk of passing tipping points that will result in profound changes in climate, vegetation, ocean circulation or ice sheet stability.”

Despite or perhaps because of its stark message, the report got short shrift in the media. In the few stories that were there, the message was diluted. The denialist-leaning News Limited muddied its coverage with an unrelated story about New Zealand's National Institute of Water and Atmospheric Research which faces a legal challenge by sceptics group Climate Science Coalition. The Sydney Morning Herald did look at the report in more detail but preferred to highlight there were "still scientific uncertainties about some of the details of climate change”.

The conclusion of the report itself should be a surprise to no-one: greenhouse gases from human activities are the main cause of temperature increases for the last 100 years and if nothing is done, they will continue to increase significantly. Yet the way the AAS document is reported continues to fly in the face of such evidence. The SMH said the report "unambiguously" supported the conclusion that a continued reliance on fossil fuels would lead to a warmer world while a similar thing happened over at the ABC with their headline about climate change "misinformation". Subeditors will say that putting words like unambiguously and misinformation in quotes is done to show who is using the words. But the effect is the opposite: the quotes undermine the words, causing the reader to doubt the source. The media is doing a great disservice to climate change science by the way it reports the issues and an even greater one by the way it doesn't.

A foggy 2020 vision: The politics of climate change in Australia

That a Tory British daily could write seriously about something called Earth Overshoot Day is a measure of how far the climate debate has moved in the last 20 years in Europe. Without a murmur of criticism, The Telegraph has reported growing world population and increasing consumption was pushing the world ever deeper into ‘eco-debt’, quoting new statistics on global resources. From Earth Overshoot Day until the end of the year, we will meet our needs only by liquidating stocks and accumulating greenhouse gasses in the atmosphere. By mirthless coincidence, 2010's Earth Overshoot Day is this Saturday: the same day Australia goes to the polls to choose from mostly uninspiring policies to deal with the problem.

The Day is a creation of New Economics Foundation, a radical thinktank which aims to “construct a new economy centred on people and the environment”. With their funding from anonymous sources but the support of governments, they combine research, advocacy training and practical action. They say ecological overshoot is at the root of many of the most pressing environmental problems we face today: climate change, declining biodiversity, shrinking forests, fisheries collapse, and underlying many factors in the global food crisis.

Over the course of any given year, the Earth Overshoot project compares all the food, fuel and other resources consumed by humans against the ability of the biosphere to cope with the loss. Rather like a Doomsday clock they calculate the daily profit and loss to come up with the mathematical day of the year we will overspend our inheritance. Ten years ago NEF calculated we were already in trouble with our ecological freehold running out in November 2000. By 2008 Earth Overshoot Day was coming in on 23 August leaving roughly a hundred days on the wrong side of the ledger. When the clock was reset for this year’s experiment, it calculated an extra two days debt making payment due on 21 August.

Earth Overshoot Day is a bit gimmicky, not unlike the election it shares the day with. But its serious subject matter reminds us yet again of the large elephant in the room of Australian politics: the economic if not ecological catastrophe that will occur if the country does not soon move away from a carbon economy. Of the major parties only the Greens have anything approaching a comprehensive plan to achieve this massive task but they will likely attract only one vote in every ten cast at the ballot box across the country. Their policies of 40 percent reduction on 1990 levels by 2020 and zero emissions by 2050 remain unpalatable to the vast majority of voters.

The two major parties have far less grandiose targets. They are unwilling to advocate the difficult choices that might affect large sections of the population They are also hamstrung by State-based brands in Sydney, Melbourne, Brisbane and Perth who are too wedded to the wealth and jobs provided by existing massive fossil fuel industries. They also have to deal with powerful lobby groups from existing industries and a point-scoring media that promotes short-term consumer benefits over the country’s longer-term needs. Leading politicians fear raising a head above the parapet lest they be wedged by the combined weight of opposing parties, PR and the press.

The result is a collusion that promotes the status quo. In 2007 the Climate Institute measured Labor and Liberal policies in that year’s election. The Institute’s modelling showed that both parties have failed to propose a set of measurable policies that will halt the rise in pollution, let alone enact the substantial reductions required by 2020. It was impossible to judge what might happen after 2020 as neither side had a substantive policy in that area.

As depressing as this was, it is arguable things have gotten worse in the last three years. In 2007 both Rudd and Howard promised to bring in an ETS if elected. No such consensus exists in 2010. Labor’s policy on climate change is captured in Chapter 9 of their 2010 election platform. It acknowledges “climate change is the most dangerous long term threat to Australia's prosperity”. It commits Australia to anything from 5 percent to 25 percent reduction on 2000 emission levels depending on a “global agreement”. It has a target of 20 percent renewable energy by 2020 (a target introduced by the Howard Government in 2001).

But it still does not commit to any firm policies beyond ten years. Labor said it is committed to reducing Australia's carbon pollution by 60 per cent on year 2000 levels by 2050 but at this stage it has no idea how to get there.
It will create the Australian Centre for Renewable Energy, to support research development and demonstration of renewable technologies, and a Solar Flagships Program to create an additional 1000 mw of solar power generation capacity in Australia. But given Queensland alone has 9000mw of coal fired power capacity it does not seem anywhere near enough to deal with the size of the national problem.

“Labor recognises the science of climate change is continuing to evolve and a deeper National 2050 target may be necessary to act in concert with international effort to reduce carbon pollution,” their manifesto reads. This is another excuse for delay - the science is evolving but a clear and unambiguous pattern of gas warming is emerging. It still hangs on for a CPRS to provide an economic platform for climate change but it refuses to put a time when this legislation will be re-presented to parliament.

It was the last CPRS vote that proved the downfall of Liberal Party leader Malcolm Turnbull and put the “human weather vane” Tony Abbott in charge of the party’s climate policies. It was no accident that Turnbull was unseated on this matter. Though it is far from a majority view in the party room, Liberal has many high profile climate change doubters who think the whole science on global warming has been concocted by an international cabal with leftist leanings. These are people who see the direct challenge posed by climate change: Behaviour is needed if we are to address this and for those who do not want to change their behaviour than climate change has to be seen as a fraud.

This view is countered by realpolitik hardheads within the party who may hate the green movement but acknowledge there is a problem either real or perceived that needs to be addressed. The Liberal policy on the environment and climate change awkwardly straddles both of these views in its meaningless title “Direct Action Plan”. These plans, they say with reduce CO2 emissions by 5 per cent by 2020 based on 1990 levels without the need for the CPRS. They will establish an Emissions Reduction Fund to provide “incentives” for older power stations to reduce emission “in an orderly manner.” It may be orderly but it is slower than Labor’s as they only commit to a 15 percent Renewable Energy Target by 2020.

The Liberals are slightly more honest than Labor in admitting the size of the problem. They take great care to note the conservative responses of the Australian States and other parts of the world including Europe, the Americas and Asia. They also have a better list of practical measures than Labor. But there is one absolutely glaring omission. Nowhere does it say what needs to happen after 2020. It does not say if 5 percent reduction on 1990 is all that is needed nor does it have a back-up plan for the obvious likelihood that emissions will continue to increase in the next ten years. Tony Abbott’s party does not appear unduly worried when Earth Overshoot Day will fall in 2020. Here's hoping it doesn't coincide with an unusually early election date that year.

Towards a Citizens' Assembly: In defence of Gillard's climate change plan

This week Prime Minister Julia Gillard made a major speech on climate change that was almost universally reviled. The left, including Larvatus Prodeo didn’t like it because it didn’t nominate a carbon price, the right including Andrew Bolt believes Gillard is doing nothing on climate change while pretending to do something. Centrist Club Troppo’s Ken Parish was not impressed saying the deliberative democracy proposal is unlikely to work. And senior members of the commentariat like Laurie Oakes didn’t like it because it abdicates responsibility.

In rushing to condemn Gillard, no seems to have listened to what she said. Here is an excerpt of the speech:

“Global temperatures are rising. 2009 has been ranked the fifth warmest year on record globally and finished off the hottest decade in recorded history. The temperatures are largely driven by pollution created by carbon emissions. Climate change has a particular environmental and economic impact on Australia. 2009 was the second hottest year in Australia and ended our hottest decade. Each decade since the 1940s has been warmer than the last. With climate change, the number of droughts could increase by up to 40 per cent in eastern Australia, and up to 80 per cent in south-western Australia within the next six decades. Without action to reduce our pollution, irrigated agricultural production in the Murray-Darling Basin is projected to fall by over 90 per cent by 2100. About 85 per cent of Australians live in coastal regions. Just under 250,000 residential buildings, worth up to $63 billion, will be at risk from sea inundation if the sea-level were to rise by 1.1 metres. Coastal industries, such as the tourism industry, will also face increasing challenges with climate change.”

I agree with every word of that, and as Julia Gillard realises, many other people do too. Probably even a majority. Certainly all of the above commentators would (except Bolt). But the point is undermined by public hypocrisy. The majority does not yet appreciate “there is not a switch to flick or one single behaviour to change.” What Gillard won’t do yet is spell out what we can flick and all the behaviours that must change.

Her predecessor Kevin Rudd won the 2007 election, partly on his promises to act on climate change. He came close. We would now have a Carbon Pollution Reduction Scheme on the books if not for the poor decision making of the five Greens in the Upper House who could not join Judith Troeth and Sue Boyce in their courageous departure from party line. It would have been a flawed ETS, possibly even counter-productive. Nevertheless, getting it on the books would have been a great start to getting it right. It also meant the 2010 election would have been a contest of ideas between Rudd and Turnbull rather than the race to the bottom it has become under Gillard and Abbott.

I do not blame Julia Gillard for circling the horses as she attempts to win the election. I suspect that like Garrett’s fateful 2007 joke “she’ll change everything when she gets in” but for now she is moral powerless at the moment as a leader. She also knows meaningful action on climate change is impossible without a consensus. She might get that if she wins the election by a handsome majority (and if that Kingston poll is replicated widely she will get it too).

But even if she wins, consensus on climate change is out of the question with Tony Abbott as Opposition leader. It also needs an advocating (or at least understanding) media that accepts the inevitability of action to stop climate change. The mainstream Australian media has made no such concession. With their quotidian needs for conflict, they handle platforms to contrarians who prefer to focus on the immediate cost and its impacts, rather than the virtues of the long-term solution and its impacts.

Gillard explained what she meant by consensus. “I do not mean that government can take no action until every member of the community is fully convinced,” she said. Her solution is a Climate Change Commission. Those that think climate change is a communist plot will detest the new CCC with a passion. The same people will equally loathe the Citizens’ Assembly, with its name a whiff of the French Revolution. The media will attack both as toothless tigers redolent of the apparent pointlessness of the 2008 Summit.

But the Summit wasn’t pointless and neither will be these two new bodies. Deliberative democracy may not change votes but it should help push the effect of making the denialists look like flat-earthers. The remaining devil will be in the policy detail which can be ironed out over time. Gillard remains committed to a CPRS and if she wins she will be dealing with the Greens who will have the balance of power after July 2012 (the Senate election is as important as the Lower House one if not more so but is ignored by the media because it lacks the one-on-one drama). Let us hope by then the Greens wake up to the need to grab whatever power you can get and not repeat their mistake of 2009.

Until a proposal becomes the law of the land, we remain headed towards the final act climax of the Tragedy of the Commons. Australia’s electricity generation is projected to grow by nearly 50 per cent between now and 2030 to meet growing demand. Each of us takes a little much out of the garden, knowing all the while its stock is not being replenished. People can be educated out of their selfishness, by being bought or commanded to change. Maybe the CCC or the Citizens Assembly will help. But as long as there is an adversarial nature to our politics and our media, nothing will be done until we move into disaster recovery.