Sunday, October 19, 2014

Risk management? Would you like some coal with that?

It's about time that someone in the mainstream media called out Tony Abbott for his luddite blinkered approach to the future, and Tom Allard does a tidy job of it in Why Abbott's faith in coal could be wrong - very wrong.

Who knows if the futurist celebrated by Allard - the indefatigable Elon Musk - will pull it off, but one thing is guaranteed, if he does manage to cut the cost of batteries, the imitative forces at work in Asia will do their best to produce cheap knock offs.

And that's just one of the futurist games in play in the United States.

These days Musk is a human headline machine, whether solar power, here, or driverless cars there.

Now the pond maintains a healthy scepticism about futurists - for every one called, 99 get left behind. On the other hand, for every product that worked and swept the world by storm, you can rustle up a hundred neighsayers who now contemplate their ass's arse.

And there's no doubt that there's a mood for change, and not just at the divestment level of small investors making a point about banks. (Climate change activists take aim at Australia's banks)

There was also John Hewson pointing out the enormous stupidity of sundry Liberals in relation to the ANU, proposing to offer academic institutions more freedom, then upset when freedom meant that they didn't form a conga line of dancers with jolly Joe (John Hewson and Malcolm Fraser blast Liberals over ANU divestment backlash). If a university can't be prudent and manage its future risks as it sees fit, what's the point of freedom?

One thing does seem likely however, and that's the way Abbott's praise for coal will come back to haunt him.

There were others that shared his blinkered vision, his expectation of business as usual, summarised by the blinkered Mark Kenny announcing Nothing to see here (and you can see that fop scribbling nothing here).

That piece was a reminder what Fairfax lost when Lenore Taylor skipped over to the Graudian and now pens pieces such as Tony Abbott's 'coal is good' line is familiar, and troubling.

Taylor took the time to put Kenny back in his box while putting Abbott in his place, by making the point he didn't have to sound quite so effusive, so uxorious about coal, so infatuated by its future:

... he is in direct disagreement with Mark Carney, the governor of the Bank of England, who warned this week that “the vast majority of reserves are unburnable” if the world is to avoid catastrophic climate change. 
No, he seems to be arguing that no transition is necessary – on the grounds that coal is “vital” for the future energy needs of the world. “Let’s have no demonisation of coal. Coal is good for humanity,” he says. 
Some commentators have actually claimed there was nothing else the prime minister could have said at the opening of a coalmine. Well, he could have started by explaining how a coal trajectory going “up and up and up” for decades can possibly be compatible with domestic and international climate goals.

Taylor had a few other points to make which suggested that there was in fact something to see here, and that there was indeed something going on:

He is certainly not arguing, as the World Bank chief, Jim Yong Kim, did recently, that inaction on climate change is “killing people”. The World Bank board has said it will no longer fund coal-fired power stations in developing countries, except in rare circumstances where there are no feasible alternatives.

Now a further twist in this tale is that like John Howard, Abbott himself has looked towards technological and scientific solutions. Howard provided exactly the sort of fuzzy logic that motivates Abbott:

Howard promised to introduce an emissions trading scheme if re-elected in 2007. Even so, he tells me he has never been convinced of the dangers of climate change. Oh, he knows the scientists' predictions are dire, but surely they can come up with a technological solution. "Technology has solved so many things," he says. 
Anyway, can we believe the scientists? "I have an instinctive feeling that some of the claims about the planet warming are exaggerated." (Unbidden, an image comes into my mind of Menzies dismissing the risks of smoking.) (here)

So scientists can fix things, except scientists don't know what they're talking about ...

That's about on a par with the Abbott government saying they accept the importance of science, and then refusing to appoint a science minister, and instead appointing a gravel-voiced minister stuck in a wading pool and even then out of his depth ...

Or saying they understand the importance of a wired and technologically advanced clever country, and then sending out Malcolm Turnbull undercover to destroy the NBN.

Well for what it's worth, here's Allard on Abbott, and it's not just the greenies that got agitated:

...the remarks also produced gasps of incredulity among financial analysts. Markets have already let their views be known on coal's prospects - driving down prices by 60 per cent since their highs of 2011. 
While the government has been dismantling climate-change mitigation policies, acting as boosters for the mining industry and wreaking havoc among renewable energy firms, investors worldwide have been flocking to clean energy companies. 
As one writer observed, the investment banks now "sound like green NGOs". 
Citigroup believes coal demand is in structural decline. 
HSBC says traditional power plants will never see profitability "anything near" that of the past decade. 
Deutsche Bank won't finance polluting industries. 
"Australians have been sold the myth that the world has an insatiable and everlasting desire to buy our coal," says Kobad Bhavnagri, head of the Australian operation of Bloomberg New Energy finance. 
"The reality is demand for coal in the developed world is declining, and the developing world is turning as fast as it can to other sources of power. 
"At some stage coal is destined to become a low-value commodity, probably at a faster pace than many appreciate or are willing to admit. 
"Meanwhile, Australia's policymakers are doubling down on tying the economy to a fuel source of the past." 

And so on.

The pond has always thought that one of the weaknesses in certain strands of conservatism is the inherent incapacity to imagine alternate futures - that's the business of entrepreneurs - and it's a particular weakness when it comes to government.

There was little reason to expect a medievalist more in touch with transubstantiation than science or the intertubes to have much a grasp of how the world might turn. Yet turn it does.

Who in the 1950s could have imagined the social changes in western societies in the 1960s, yet the beat generation foreshadowed it. It's just that conservatives didn't want to know about it ... and then the hippies thought they'd inherit the earth. So it goes.

And ditto many of the other changes, social, economic, political and cultural in just the last fifty years, yet there's Abbott - despite the many changes it's already created in any number of industries - dismissing the intertubes as just an enhanced entertainment system.

Abbott has of late taken to sounding more like a fundamentalist preacher - blathering on about evil in the world as if he's trying out for a role in Elmer Gantry - when the real question is how well he is able to divine future trends, and provide a buffer for Australia against the changes that will inevitably come ...

In that context he is likely to prove an epic failure, and Malcolm Turnbull with him,  with the latter's dreams of leading the party and the country evaporating like dry ice each day he helps degut the clever country ...

As Allard notes, when confronted by home truths, the best the coalition can do is resort to shameless, blatant, outrageous lies of the denialist Joe Hockey kind, which suggest Hockey would have been better off selling used cars.

News Corp did their best to resist pointing out the length of Pinocchio's nose in Joe Hockey gets confused about Australia's gas emissions on BBC's Hardtalk show.

Gets confused? Bungled?

He knowingly and willingly lied, as is clear enough in Joe Hockey denies Australia one of the the dirtiest emitters of greenhouse gases (Fairfax forced video at end of link) and if it wasn't knowing, then he's clearly such a misinformed and ignorant hater of wind power that he should have resigned on the spot.

In the end, this isn't about ideology, or it shouldn't be, nor should it be party political. Especially as Bill Shorten daily offers signs that he's as clueless as your average Liberal.

It should be about managerial abilities, and institutional foresight. It should be about positioning and buffering and managing risks and warding off shocks.

So how are things shaping up amongst the Hockey and Abbott-led denialists in the risk management department? Cue Allard:

According to Erwin Jackson from the Climate Institute, the government's policies are "exposing communities and industries to massive shocks in the future".
"We are seeing a myopic view of the energy system which is entirely inconsistent with that of financial markets and policy developments in our trading partners," he says. "Where is the risk management?" 

To be sure, there are uncertainties with technologies like Tesla's lithium-ion batteries. The transformative impact many predict may fail to eventuate, or take much longer to come to pass. 
At the moment though, global investors are placing their bets firmly on clean energy and the coming "revolution" in power storage, as UBS has dubbed it. 

Meanwhile, Abbott is backing roads and mines and cars of the old fashioned kind and copper wire and coal, and possibly also cabbages and sealing wax and tin cans with string ...

It could turn out to be a rough ride ...

Yet no one could say they're surprised. Nicholson noted likely trends years ago:

1 comment:

  1. The impervious bedrock foundation of Coaliton policy on climate/emissions/energy is comprehensive rejection of mainstream climate science - something they consistently avoid annunciating clearly, yet is apparent in that avoidance, in the vague and contradictory utterances when avoidance won't suffice as well as in the more open and direct comments of their allied commentariat. We get suggestive opinion pieces that give us a glimpse at the self justifications for being misleading and deceptive over up front and open debate - eco-authoritarianism and PC that's so insidious and pervasive and all powerful that they are forced to not say what they think and what they intend in order to save the nation from the green paganist commie conspiracy that has infected every peak science agency on the planet! And these deranged drongos are in charge! And our media have been either active or passive participants in allowing their dangerously irresponsible and irrational and contemptuous of open debate approach to an issue of profound importance to go unexamined for far too long.

    I can only hope the insights of the featured political cartoonists - those are excellent - are indicative of a belated shift within at least some elements of our mainstream media.


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