“We’ve seen the perfect outcome in Australia: a strong focus on reducing domestic emissions and a policy that shies away from addressing the export side altogether,” Jotzo said. The Australian government elected in 2022 has set a target of net zero emissions by 2050 but has refused to ban any new coal or gas projects. It has pledged hundreds of millions of dollars for community batteries, solar banks and electric vehicle charging, but the country is the world’s second-largest coal exporter and has the third-largest coal reserves.
Given the recent record-breaking drought, heat, bushfires and floods, one might expect the Australian government to reconsider its approach to continuing to extract coal, oil and gas. But Polly Hemming, director of the climate and energy program at the Australia Institute, an independent think tank in Canberra, said the government was too reliant on industry to do that. “Climate policy has been completely turned upside down. Industry sets the climate standards they want the government to deliver,” she said. This influence is exerted through political donations, industry lobbyists (often themselves former politicians and political operatives), and scare campaigns against governments’ climate change actions. “Fear is a stronger motivator than hope or optimism, so governments immediately back off,” Hemming said.
There is no economic logic to this. The Australian government subsidizes fossil fuels with about A$11 billion ($7.36 billion) a year, and the fossil fuel industry employs fewer people than McDonald’s. Most of the companies mining and selling Australia’s fossil fuel reserves are foreign-owned, they pay little tax to the Australian treasury and most of what they extract is exported, Hemming said. However, this “few really powerful corporate interests” still dominate.
Ironic, given that the IPCC authors point out that the economic and social benefits of mitigating climate change will far outweigh the costs. The economic cost of air pollution alone—estimated at around $2.9 trillion globally in 2018 and claiming 4.5 million lives that year alone—far exceeds the cost of climate change action. Mitigation options such as wind and solar power, green infrastructure, energy efficiency, electrification of urban systems and reducing food waste are increasingly cost-effective compared to business as usual.
Samantha Gross, director of the Energy Security and Climate Initiative at the Brookings Institution in Washington, D.C., said that while the need to decarbonize is urgent, the trillion-dollar energy sector cannot be achieved overnight. “We need to support existing systems while retrofitting them,” Gross said. “The energy system using these fossil fuels isn’t changing fast enough, we don’t need them.” Gross said the recent gas crisis sparked by Russia’s invasion of Ukraine illustrated this, as some European countries restarted old combustion engines despite growing deployment of renewable energy. coal power stations to fill the remaining energy gap.
Gross argues that as long as there is demand for fossil fuels, industry will provide the supply. “Coping with climate change is really hard on the supply side because fossil fuels are abundant,” she said. She advocates a focus on the demand side of the equation: more policies and regulations that drive a shift away from fossil fuels, such as greater investment in renewable energy, a bigger and faster push to electrify the transport sector, and use of carbon pricing mechanisms Encourage and support the adoption of low emission technologies.
