SuperMarkets - or, you're doing it right

"The propaganda is strong," Youtuber friendlyjordies tells us in a video extolling the power of switching superannuation to fight climate change. "We've all been sold a big lie."

Unfortunately, he is selling a big lie himself - that market mechanisms can do the job of averting climate change. Or, as he put it later in said video: "the platitude that 'you vote with your wallet' is actually true."

It's not.

friendlyjordies in said video, singing the praises of an Adani-loving government

This post is a follow-up to my 1.5c lifestyle challenge one analysing how much impact switching bank can make - and as I make it clear there, I have personally already switched my super (and bank) to one that invests in renewables (or doesn't invest in coal). I'm not trying to claim that private investment in renewables won't do anything. But, like switching lightbulbs, it's a "solution" that is vastly undermatched to the severity of the crisis we are facing.

Now, in his defense, while he might seem to relish in dunking on climate activists for painting "crap signs" like they are in Year 1 and taking to the streets, friendlyjordies didn't just pull this argument out of nowhere. As I mentioned in the prior post, Australian Ethical markets itself on the promise that their super will help to finance the zero carbon transition. His video is in support of another super fund - Future Super - and it actually draws on a report comissioned by them, alongside climate campaign group 350.org and the UTS Institute for Sustainable Future (ISF).

Sounds great, right? A well-researched plan that doesn't require us to get our lazy arses off the couch? And only 12.4% of Australians have to do it to decarbonise our entire economy - or as few as 7.7% to get us to 100% renewables by 2030? If that's all it'll take, why hasn't it happened already?

Unfortunately, friendlyjordies has fudged the numbers by more than a little. He says less than the 300,000 people who marched in days of action need to switch their super, and they'll make lots of money doing it, when the real number is more like half of all Australians, and returns are definitely not guaranteed. But before we get to that, there are a few big problems with the plan itself.

The biggest warning sign for me was the price tag. According to the report by these research and campaign heavyweights, the cost of transitioning Australia to a zero-carbon grid within ten years is a whopping $788 billion AUD (in 2018). That's several times the amount the federal government recently splashed out to stop our economy going into freefall because of the present pandemic; but more to the point, it's a lot larger than the price given by Beyond Zero Emissions (BZE). Nearly double as much. Their 2010 plan to decarbonise our grid is fully costed, and their initial capital investment is much lower at $370 billion AUD (in 2018 terms, $434 billion AUD). So why the difference?

The reason is, the frame of reference is completely different. The BZE Stationary Energy Plan is, above all, an engineering one; they look at the technical challenge and devise a way to overcome it. The ISF plan, on the other hand, is written from the point of view of an investment firm; they are more preoccupied with the return on investment (ROI), and how technologically sound the solution is doesn't matter as much as if it will generate a 7% ROI.

From the ISF plan

Although they haven't published the technical details the way BZE have, the overall breakdown of energy type in the ISF plan suggests the oversimplification that has led them to arrive at a figure nearly double that of BZE: more than half of power would come from solar photovoltaics (PV).

 

Solar PV and wind power have both been very good investments in recent years, with returns of around 10% on investment. So if that's the metric you're starting with, they seem like a good bet - just keep building them until we have enough, right?

This is the finance world equivalent of everyone in the country just buying 100% renewable energy. As I've talked about in the first post of the 1.5c lifestyle series, our grid doesn't actually work like that - and in fact, we're very close to reaching the limit at which intermittent distributed PV power and wind will start causing problems, unless there are major reforms by the regulators and governments. We are already likely to have days of 75% renewable energy by 2025 - and at that point, the regular will have to switch off power plants to maintain stability. Once that happens, the ROI on those assets will plunge.

The major changes that we need are ones that friendlyjordies and the ISF plan don't talk about - they are ones that market investment can't give us - and they are ones that the BZE plan has modelled and costed. They are grid connections from coast to coast, upgraded transmission lines, large-scale storage, and flattening our evening peaks.

While friendlyjordies does also lampoon the backward-thinking, bucket hat-wearing Dad for asking "what about when the sun doesn't shine?" - the truth is, that's a serious technical challenge. Australians use the most electricity on hot evenings in the summer and shoulder seasons, when they get home and switch on the AC - right as the sun is setting. This isn't an insurmountable challenge; the BZE plan fixes it, by investing in solid upgrades to our transmission infrastructure, linking the two main WA grids to the east coast NEM, and making concentrated solar thermal (CST) with inbuilt molten salt storage the backbone of our grid. That way, when the sun has set on Sydney and Melbourne, our AC units can still be chugging away on daylight in Perth.

The cost of linking the grids like this is significant, and returns on investment are not likely to be 7%. The Australian Energy Regulator recently approved a major interconnector between NSW and SA, which will provide both states with extra stability for distribution in peaks and troughs, as well as reducing the upfront cost of new renewable plants in western NSW. Even this 850km expansion, costing $1.53 billion (in 2020 dollars), is only estimated to return $269 million in likely net benefits - 12.5% overall, but most of these come in indirect consumer savings from dispatchable power and new investment in renewables, not directly from the interconnector's operational income.

The BZE plan puts a price tag of $93 billion AUD on the transmission upgrades required to convert our grid to renewables. This is a cost that will have to be paid, sooner or later - but without a likely ROI from the asset, a responsible super fund manager would never shell out the funds for it.

Then there's the question of energy storage. This is the main answer to Mr. Bucket Hat Dad, and Malcolm Turnbull's Snowy 2.0  is the kind of answer we've been given. There are major problems with that approach - which is why BZE made concentrated solar thermal, with in-built molten salt storage systems, the backbone of their plan. But the up-front costs are higher than solar PV, and despite it being commercially proven overseas, the market will not invest in CST in Australia.

At this point, I can only repeat that the ISF plan hasn't released detailed schematics of their plans. But it would seem that they have arrived at their huge number of $788 billion by picking the most profitable assets, and then massively duplicating them, until enough is built to run the NEM and WA's disconnected grids separately, and there is enough wind and solar power assets to keep on running the grid even when wind doesn't blow or sun doesn't shine.

The kicker is, as they don't seem to have incorporated any kind of storage, that most of these duplicated assets will be sitting idle most of the time. That isn't the case for renewable energy assets today. Bye bye 7% ROI - idle assets that are not selling electricity to the market don't make money.

This plan doesn't hold any water.

Even without all of those details, how has friendlyjordies fudged the numbers? Well, he himself admits 80% of Future Super's money goes into other things than renewable assets, even for their renewable-focused Renewables Plus. The rest sound like good things, don't get me wrong. But in order to reach our 7.7% of super fund assets needed to fund the switch to 100% renewables, then 38.5% of Australians would have to switch to Future Super, or other funds which are putting an equal amount of money into renewables. That's a lot more than the 300,000 who protested over the last summer; it's more than the 4.7 million (33%) who voted Labor in the last election.

So if the 300,000 people protesting in the streets all switched their super (assuming none of them were already ethical investors), we'd get a small portion of the way to 100% renewables. It might tip the stationary energy balance something like 5% towards renewables over the next ten years - not nothing, but a drop in the ocean compared to the task ahead of us.

But surely, friendlyjordies might ask, that 5% is better than achieving nothing, like you and your "crap signs" did in days of climate strikes?

It is true that our government doesn't seem to have budged very far on climate change. But Australians have. In the six months from July 2019 to January 2020, we went from 37% of Australians being "very concerned" about climate change to 47%, and from 43% thinking we are already suffering the impacts to 57%. The number of us "not very concerned" shrank over the same period from 16% to 11%.

Climate protests in that time cannot take sole credit. The summer of bushfires - and the fact that emergency service bureaucrats came out to say they were the product of climate change - no doubt helped shift the conversation. But so did hundreds of thousands of passionate youth. They may not have much in their super balance (and let's be honest, neither do I) - but they know that we cannot leave it up to the markets to solve climate change.

And as someone who attended the climate protests, there's another flaw in friendlyjordies logic; above all, the protests were an expression of anger by a generation of youth, whose future is being trashed - and who don't have much in the way of superannuation balances to switch. In 2017-18, even 25-34 year olds only had an average balance of $33,200 for women and $41,700 for men. Under 25s (the majority of the 300,000) don't even rate a mention. Those aged 45 and up have the decisive amount of the super pool, to invest as they see fit. Definitely not the majority of the protestors.

Voting with your wallet? It means that those with more money get more votes, even though they won't be the ones still around to live with the consequences.

My super is due to mature in 2055. If we haven't ditched our neoliberal obsession with market mechanisms and bloody well built the kind of smart grid that can support 100% renewables within a few years, then the worst-case scenario is collapse of civilization five years before I'm due to claim my lump sum. So I'm not particularly concerned about 7% returns, and I don't want us to fart around with the most profitable solutions when we have the technical know-how to do the job.

Protestors 10 or 15 years my junior, no doubt, care about it even less. They aren't voting with their wallets - they are voting with their feet. And they are doing it right.

We must take action now, regardless of the ROI.

Out of the woods, pt 2

This post follows on from Out of the woods, pt 1.

The Australian bushfires fires of last summer feel like a lifetime ago now. I was lucky enough to live in a region that wasn't directly affected, although we were bordered by both the Currowan and Green Wattle Creek fires which devestated villages I know well. Relatives further down the coast lost their homes and were trapped for days. And all of us on the east coast spent months under more or less of a smoke haze, some days so strong it was hard to breathe. Residents of Canberra, a natural bowl, had the worst of it, but even in Sydney, the Opera House became invisible from across the harbour. For myself, I knew it was a bad day when I woke up and couldn't see Mount Keira three kilometres away. The anxiety was constant, and the relief of the drought-breaking rain in February was immeasurable.

What did the fire season mean for climate change? In the simplest terms - 830 million tonnes of carbon dioxide emitted. There are only five nations who emitted as much carbon as the fires into the atmosphere last year: China, the US, India, Russia and Japan. By far, they burnt the largest ever amount of temperate forests in Australia's historical record.

But the actual impact is a little more... well, hazy.

A word on the misdirections toward arson and backburning before I get into the science. NewsCorpse columnist Andrew Bolt was one of the many conservative commentators who tried to undermine the shift in consciousness that occured during the fires by blaming either deliberate arson or green tape preventing hazard reduction burning. They have been rebutted elsewhere in depth, so I won't spend this post explaining why they are wrong; however, for anyone who is interested in deliberately-lit fires, I recommend Chloe Hooper's book, the Arsonist, which details exactly what happened in one such case.

However, reading the technical update by the Department of Industry, Science, Energy and Resources (hardly a bastion of the culture wars) put Bolt's claims that the fires weren't the "largest" we've ever experienced to bed. The above graph, taken from that update, shows the devestation of temperate forests in Australia; savanna fires may cover far more area, but they represent far less destruction of endangered species, loss of habitat and biodiversity - and release of carbon emissions.

But what does the technical update have to say about the hundreds of millions of tonnes of carbon released into the atmosphere by the fires? In essence, that they don't count - at least not for our National Greenhouse Accounts or reporting to the IPCC. Most of the time, bushfires don't actually kill off trees in temperate Australian forests, only burn the bark, leaves and understory shrubs. As such, new growth will draw almost all the carbon released back out of the atmosphere within 10-15 years.

Is that really the case? Thankfully, we have had months of sustained rains in most of the coastal areas. They may have fallen down the page amidst the pandemic, but images of forests sprouting green new growth after the fire have done the rounds on Australian social media. The initial signs are good. However, it is only some kinds of trees which can regrow under such conditions. The fires burnt in rainforest areas previously thought safe, and may have wiped out many species.

It will take the forests a long time to draw down that much carbon, and in the short term, we are seeing a huge spike. During the fires, the British Met Office estimated we would hit a peak of 417 parts per million (PPM) of carbon dioxide in the atmosphere this year thanks to the fires. We have actually hit a recorded high of 418 on May 3rd. 450 PPM is almost certainly going to tip us over the line to a dangerous 2c of warming and runaway climate change, which I wrote a little about in this post.

The spike will only go back down if the forests that burned are able to regrow for 10-15 years, without drought or future fires. This is almost guaranteed not to happen if we don't immediately address climate change, as this graph from the technical update hints. The negative green bars are showing the amount of carbon being drawn down by regrowth after fire, the orange the amount released. The more frequently severe bushfires occur, the less "carbon neutral" they become.

We must fight to protect forests in the wake of the fires. I will talk about the climate politics around forests in the final post of this series, but the most important thing to remark on here is to massively expand our bushfire fighting capacity. The priorities in Australia's bushfire fighting efforts were to protect lives first, property second, and forests third. We need to incorporate the urgent need to protect regrowing temperate forests from bushfires to maintain their status as carbon sinks, and intervene early.

That means more permanent volunteer payment provisions, and expanding equipment available to put fires out before they become too big to fight. In the fire season, aircraft and specialists had to be called in from overseas, and the state and federal governments all passed the buck on footing the bill. To buy C-130 waterbombers outright costs in the tens of millions of Australian dollars.

Celeste Barber's $51 million dollar Facebook fundraiser for the fires is a great step in the right direction, as the NSW Rural Fire Service must put the money towards equipment to expanding the Service's capacity to fight fires. It recieved over $100 million in donations throughout the crisis. Unfortunately, although Barber's fundraiser was clearly dedicated to the RFS trust, it's not exactly what people had in mind, as the description suggested it would help rebuild devestated communities - the RFS is currently exploring ways it can do both.

As runaway climate change becomes more and more inevitable, climate activists shouldn't only be fighting to "stop" climate change, but to fight for the greenhouse polluters to pay for the cost of defending communities from fires, drought and floods, and demand that they foot the bill when communities are destroyed. This call gained some traction during the bushfire crisis, but not enough. As with major devestating events in the past two decades, the job of rebuilding has largely been left to insurance companies, whose goal is to profit from the situation - by jacking up insurance premiums on the people most affected.

Which of these two responses plays out - the cost being placed on those responsible or those affected - will depend on the climate movement, and our ability to take up arguments around climate justice and bushfire justice. I will expand on that more in the last post in this series.