Hewson's view: There is no future with coal

Beyond politics: Anti-Adani coal mine protesters next to a police officer outside the Queensland Liberal National Party headquarters in Brisbane on Thursday, April 11. Photo: AAP
Beyond politics: Anti-Adani coal mine protesters next to a police officer outside the Queensland Liberal National Party headquarters in Brisbane on Thursday, April 11. Photo: AAP

There is an enduring and increasingly nasty debate in Australian politics concerning coal mining and coal-fired power. The spectrum of views ranges from those who believe that we have a natural comparative advantage in coal that we should continue to exploit, domestically and by export, through to the other extreme of those who would like all coal mining and coal-fired power to be abandoned as soon as possible.

If it is accepted, as it is by nearly 80 per cent of voters, that it is essential that we make the transition to a low carbon society as a matter of urgency, then a move beyond coal is inevitable. However, it will not, and should not, happen over night - it is a transition that needs careful management, but it must be pursued.

There is no doubt that coal is a significant Australian industry and export, but this significance is often exaggerated in political debate. For example, it is said to be a significant employer, yet total employees are less than 35,000, and the industry is being rapidly mechanised. A recent survey by the Australia Institute found that people think that the coal industry employs nine times as many as it actually does.

A very emotive debate has developed over the proposed Adani coal mine in the Galilee Basin in Queensland, where proponents have clearly exaggerated the likely employment. Initial claims by the company suggested as many as 14,000 jobs would be created, but it was subsequently admitted that the mine would be mostly automated, with the likely employment about 1/10th of the initial estimate, and heavily concentrated in the construction phase.

Neither the LNP nor the ALP will come out definitively against the mine - indeed, this week the Morrison government approved the "water study" as the final stage of necessary federal government approvals.

Hence, the final decision on the Adani mine now rests with the Queensland government that actually won the last state election by campaigning against the mine, and refusing to sign off on a federal government attempt to lend about $1 billion from the Northern Australia Infrastructure Facility.

Recognising the significance of the global climate challenge, where the objective should be net zero (or even net negative) emissions by 2050, over 70 per cent of known coal reserves can never be mined and burned. It is certainly hard to justify a new mine, especially one that proposes to be one of the largest in the world.

The LNP (mostly Nats) in Queensland have also been arguing for the federal government to underwrite/fund a new, ultra supercritical coal-fired power station for North Queensland, mostly worried about the electoral impact of One Nation and United Australia (Palmer) parties. The ALP has also been subjected to coal union pressure on both mining and the power issue.

It is clear that with most major domestic and global banks now unwilling to finance such a project, and with global insurers now unwilling to insure any new coal-fired power station, it would have to be government funded. It should also be recognised that there is inadequate electricity demand in North Queensland to support such a project.

It is important to acknowledge that Australia is a laggard in the transition away from coal. The UK will be out of coal-fired power by 2025, following a tri-partisan (the Conservatives, Labour and the Social Democrats) agreement a few years ago to transition the economy from coal. Germany recently announced it would be out of coal by about 2035, and even China and India are more advanced in the transition.

Coal is now a clear test of political leadership, especially when some of the big miners have called for decisive action - such as BHP calling for a "price on carbon", and Glencore announcing a decision to limit its coal production. It is extremely hard to accept the possibility of a new coal mine on the food-rich Liverpool Plains, nor the proposed Hume coal mine in the Southern Highlands of NSW.

The longer our governments take to accept the reality and urgency of the transition, the more they essentially "steal" from future generations, as they kick the challenge down the road for them to address.

Coal is now a clear test of political leadership, especially when some of the big miners have called for decisive action.

Our politicians like to say that they are in politics "to make a difference" - that should be to the benefit of our nation, not just to themselves!

John Hewson is a professor at the Crawford School of Public Policy, ANU, and a former Liberal opposition leader.