By George Crisp on 12 February 2014

The Department of Industry is now collating responses to its Energy White Paper (EWP) and formulating what will likely be a roadmap to Australia’s future energy landscape.

An overarching plan for the future may be eminently sensible, but only if the information that those plans are based upon is accurate and representative.

The EWP sets out to address energy security, reliability, transparent and competitive pricing and efficiency including regulatory reform.

So, to achieve its stated aims the full costs of energy generation including social and environmental costs must be assessed and accounted for.  But herein lies the first major problem with the EWP. These hidden costs, or externalities, are barely considered if mentioned at all.

Energy and transport related fossil fuel combustion (and extraction) produce the vast majority of Australia’s harmful air pollutants as well as greenhouse emissions.

Air pollution is a significant contributor to illness and mortality from the major non-communicable diseases that affect our community; heart and lung disease, stroke and lung cancer. Illnesses that result in significant welfare and healthcare costs and reduce worker productivity. The estimated health costs associated with outdoor air pollution in Australia are up to $8.4 billion each year.

Climate change resulting from greenhouse gas emissions is the dominant long-term factor. The World Bank has described climate change as “a fundamental threat to sustainable economic development and the fight against poverty”.  With just 0.7C of average global warming, health impacts from climate change already contribute to over 140,000 deaths each year according to the WHO, and here in Australia heat-wave mortality and a range of other health impacts are already being observed.

Coal is the most polluting fossil fuel. Epstein and Harvard colleagues calculated that accounting for its life-cycle externalities conservatively doubles or triples the price of electricity in the US, and notes that many of these costs are also cumulative.

And US economist Nordhaus found the pollution costs of coal fired generation 0.8 to 5.6 times its value added. In other words, the damage caused is worth at best 80 per cent of the net value of the industry and at worst 5.6 times greater..

By ignoring these very real and significant costs, especially of air pollution and climate change, the EWP and subsequent papers will be unable to make meaningful comparisons or predictions of energy costs, not to mention the lack of transparency.

But there are other important aspects of climate change that have been missed in the EWP, relating to energy security and productivity.

Generation, transport and transmission infrastructure can be highly vulnerable to disruption from extreme weather events including associated flooding and bushfires, and longer term changes such as droughts from changing rainfall patterns. The latter is especially problematic for water intensive thermal power generation.

Workforce health and productivity is also affected by increasing nocturnal temperatures that facilitate good quality sleep, average daytime and maximum temperatures, particularly with outdoor occupations.

These are very relevant to energy security, resilience and productivity and as a consequence of omission the potential advantages of alternative decentralized and renewable energy technologies are excluded.

Concern is raised about the potential effects on further renewable energy growth on electricity costs, “surety of supply” and providing a “regulated return on the existing asset base”, and that the “review of the renewable Energy Target will inform policy development on this issue”. In marked contrast, fossil fuels subsidies and the market distortion and inefficiency they produce, are not included in the report.

Regulatory reform in the EWP focuses on reducing costs to business. But its importance in protecting environmental and human health glossed over. There are already systemic and major problems with regulatory inadequacies in Australia as we highlighted in a recent report “The Health Factor”. Reducing regulation therefore risks worsening health and environmental outcomes still further.

Curiously, this anti-regulation focus does not extend to the extraordinary and unjustified over-regulation of wind turbines.

Gas appears to be a special case in the EWP, with is rapid growth a given and regulatory controls relaxed to facilitate this. It will apparently address both impending energy security and massive export earnings, and assist in more affordable energy, with no significant concerns raised about health and environmental impacts nor implications for greenhouse emissions.

One cannot help but conclude there is a significant ideological agenda driving this selective choice of information and direction in the EWP.

This is explored in more detail in our submission to government from Doctors for the Environment Australia.

 

Click for DEA’s submission to the EWP

Dr George Crisp WA representative of Doctors for the Environment Australia