Energy transition that is becoming an end unto itself

The federal government seems determined to double down on its emissions reduction ambitions regardless of the obvious fact that our efforts are never likely to have the hoped for effect on the world’s weather and climate.

Australia’s renewables transition has cost taxpayers an estimated $29bn across the past 10 years and cut energy emissions by only 6 per cent. This is in line with the global experience where, despite the billions spent, wind and solar combined contributed less than 4 per cent of total energy supply.

Meanwhile, coal, oil and gas consumption were at a record in 2023, as were carbon dioxide emissions in 2024. Worse still, while Australia’s carbon dioxide emissions from energy dropped by 22.6 million tonnes to 358.4 Mt between 2014 and 2024, China’s emissions grew from 8647 Mt to 10,617 Mt. This growth is equivalent to several times Australia’s total emissions.

Despite making climate change a key plank of its global diplomacy, China is not bound by the same rules as developed countries. For the developed world, the financial impact of attempts to substitute fossil fuels with intermittent sources of energy is clear and growing.

As Chris Uhlmann writes on Saturday, the impact has been particularly harsh in Germany, where union leaders and work councils that represent more than one million people have complained that “for 35 years, (solar) and wind power have been legally privileged and subsidised, but to this day they contribute no more to supply security than they did three decades ago. Instead, they generate hundreds of billions in grid costs.” Sound familiar? Despite this, momentum is building to cement the energy transition further into the heart of the federal government’s second-term agenda.

In March, Jim Chalmers declared the ­energy transformation and carving out a fourth economy were his “obsession” and “reason for being”. The peak lobby group for Australia’s $4.3 trillion superannuation sector wants government to relax its performance criteria so funds can invest in the energy transition.

In a speech to the National Press Club on Wednesday, former Treasury secretary Ken Henry set out a reform blueprint for government that is anchored in the net-zero agenda and extends the reach beyond energy to nature protection. “Projects, be they wind farms, solar farms, transmission lines, new housing developments, land-based carbon sequestration projects, new and enhanced transport corridors or critical minerals extraction and processing plants, must be delivered quickly and efficiently,” he said.

The view from Canberra is that policy increasingly is being shaped by the writings of two US economists, Ezra Klein and Derek Thompson, in a book called Abundance; How We Build a Better Future. Dr Chalmers said: “The reason that we are attracted to it is because it really is about working out, as progressive people who care deeply about building more homes, rolling out more renewable energy, how to make sure that the way we regulate that and approach that doesn’t get in our own way.”

In her appraisal of the book, Judith Sloan says its principal aim is to provide guidance to left-leaning politicians about achieving their aims more efficiently. But the authors don’t query these aims or ask whether government intervention is really a good idea. It is no doubt attractive in Canberra because it offers a technocratic view of how governments should function.

There is a danger that by cherrypicking desired outcomes including more renewable energy – without considering alternatives such as nuclear – and subsidising favoured industries to get there, the rights of individuals will be easily trampled and scarce taxpayer funds misdirected. The dangers are greater still when net zero and the energy transition are allowed to become ends unto themselves.