Coal has a Future in Australia

Australia's Labor party just cannot escape the issues associated with trying to present a credible climate policy.  The latest twist comes in the form of its newly appointed Climate Change Minister Greg Combet.  The Australian reports:

As part of its deal to secure government, Labor signed a formal alliance with the Greens, whose policies include the eventual phasing out of the coal industry, Australia's biggest export earner.

But in an interview with The Australian, Mr Combet said his background as a former coal engineer, union official and MP with coal workers in his NSW electorate meant he did not believe his job was to shut down the coal industry.

"I don't agree with that. That's not part of my job at all," he said.

"I am acutely aware of the challenges that this policy presents. But people jump to these absolute positions, and I just don't think that's appropriate.

"I've got a responsibility to support those people's jobs. The coal industry is a very vibrant industry with a strong future. What you've got to do is look to how we can achieve in the longer term things like carbon capture and storage for coal-fired power stations." . . .

Mr Combet said he was not in the business of applying the adjective "dirty" to coal.

"People will use whatever language they want. But you won't hear me using it," he said. "You do not take the back of the axe to the fundamentals of the Australian economy. We just work through it very carefully with reforms such as energy efficiency improvements, where you can reduce emissions quite significantly. With investment in renewable energy sources, which will help us reduce emissions significantly and work towards introducing a carbon price. The key thing about a carbon price, from my point of view, from the outset is that it created an incentive to reduce emissions . . . but do it sensibly. And we did do it with the CPRS (carbon pollution reduction scheme), with all the negotiations we had with industry. We've got to keep it on it a commonsense frame."

Mr Combet said he believed he knew the industry "very well" but conceded he had a lot to learn, particularly about international negotiations.

He declined to criticise Senator Wong or Mr Rudd's failure to deliver on an emissions trading scheme in the previous term, describing it as a complex area.

"I am certainly not going to criticise any of my colleagues. I mean, I've been involved in the portfolio over the past 18 months. People can criticise me too if they wish," he said. "There's no doubt that Kevin Rudd was fundamentally committed to dealing with climate change. The new PM is fundamentally committed. We were so close to getting it through."

It is a simple mathematical reality that Australia cannot meet even the least ambitious targets for emissions reductions with coal having today's share in Australia's energy mix (of consumption plus exports, see figure above) -- unless CCS is perfected.  Eventually, something will have to give here -- coal, CPRS, Labor, Greens or Combet.  Time will tell which it is.