Sunday, June 27, 2010

Dear Julia

Dear Julia

What a pleasure it is to have a secular leader who is never likely to be influenced by loyalty to a higher power than the Australian people.

Let me make a point on climate change. A warmer world will almost certainly be wetter rather than drier. Warmer oceans evaporate more. Models suggest that Australia might be drier south of a line from Sydney to Perth, but this is really irrelevant. Addressing climate change has to be done by all countries, not just those that lose out. The results of climate change remain "uncertain and possibly very serious", as Prof MacKay, the Chief Scientific Advisor to the British Ministry of Energy and Climate, always says. So we can't build the public consensus on the basis of the negative effect on Australia, because that just invites the countries that expect to gain (such as Russia and Canada) to refuse to cooperate. It also opens the way for those opposed to action to say "Global warming is the reason Lake Ayre has filled two years in a row and the outback is blooming" and then the whole thing can become a battle between Northern and Southern parts of Australia. It is important to focus on the effect on the world.

Unfortunately it is tough to adopt a consistent position on climate change. If you run the climate models under various scenarios you find that there is only one variable that makes much difference over 50 years, and that is: the amount of coal that gets left in the ground. However the coal industry is very important for Australia domestically and for exports. And the coal industry unions are very powerful. The sensible place for a tax on carbon is: as it comes out of the ground.

But let's be realistic. It will be politically nearly impossible to raise the price of electricity in Australia, despite our prosperity. Our energy importing friends in the Western world are going to have far worse political issues with this. Realistically the one way to stop coal consumption is to find a cheaper source of electricity. And indeed there is. The German government has imposed a super profits tax on the companies that can produce carbon-free electricity very cheaply: the Nuclear Power industry. I urge you to conduct a thorough impartial investigation into Australia's energy future. Even if it is politically impossible to introduce Nuclear Power now, can we please at least enhance our engineering education and our R&D capability in the area.

There is no more easy oil to find on the world, and soon there will only be hard oil. We will never run out of oil, but that hard to get oil will be expensive. That is going to keep depressing the world economy for many years until we move to alternatives. There are also significant energy security concerns with oil. The world needs to move to electricity for transport, heating and a whole lot more. Let me assure you that this will work very badly if the electricity isn't cheap and reliable. The world is being seriously misled about the effectiveness of renewable energy. If anybody talks about generating "capacity" then they are trying to mislead, because wind and solar only operate at a fraction of their capacity (apart from their impact on the countryside). The key number to determine and keep in mind is how much extra electricity we need if we are to use electricity for transport and everything else. The answer determined by Prof MacKay is that Britain will need 3 times as much electricity as it currently produces. Our figure will be lower but still very big.

So the world as a whole has to move to nuclear power, and it will, and it is doing so. Maybe Australia can survive on renewables. But would that be wise? Here is a point that all Australians can understand: Even if it is possible to build an economy on renewable energy, there are inherent limitations that will eventually put a cap on prosperity. Once that limit is reached the countries running on nuclear power will become ever stronger than us. But actually, we can see, this will happen long before we get anywhere near that limit.