The Ominous New Pact

When the Kyoto Protocol went into effect in February 2005, every nation in the world except the US, Australia, Monaco, and Liechtenstein had ratified the treaty. Developing countries, including China and India, are not required to reduce emissions during the first phase of the treaty (2005–2011), and the supposedly unfair economic advantage this would give the developing world was cited by the US as a principal reason that it would not ratify the protocol. As evidence of climate change has grown, pressure has been building on all of these countries to reduce their emissions of greenhouse gases, and on July 28, 2005, the political leaders of the US, Australia, China, India, South Korea, and Japan—the AP6—announced a new agreement, the Asia-Pacific Partnership on Clean Development and Climate, designed to show their concern. The AP6 countries make up around half of the world’s population and account for around 40 percent of its CO₂ emissions.

Except for a one-page statement of the group’s “vision,” very little information about the AP6 has been forthcoming. The range of possibilities cited in that statement is exceedingly broad. It mentions existing technologies for producing cleaner coal that will, ironically, exacerbate climate change; it also mentions far-off possibilities for developing a hydrogen economy and nuclear fusion. Understandably there has been much speculation about the intent of the pact. Will it eventually lead to real action on climate change, or will it become a rival to Kyoto that would weaken the global response to the climate crisis? Until the inaugural meeting of the AP6 in Sydney on January 11 and 12 of this year there was no way of telling, but there were hints of what was to come in the recent energy plans of the AP6 countries.

The AP6 nations are either heavily dependent on coal for generating electric power throughout their economies, or they have industries like aluminum smelting that require cheap power for processing raw materials. Australia has both, and is also the world’s largest coal exporter. Good-quality black coal is at least 92 percent carbon. When it is burned, the carbon atoms combine with two heavier oxygen atoms. Therefore, when a single ton of high-grade coal is burned, 3.7 tons of CO₂ emerge from the power plant’s smokestack. The vast stream of waste that results is estimated to amount to nine billion tons each year—around 38 percent of humanity’s greenhouse gas emissions.

The meeting did not get off to a good start. At the last moment, Secretary of State Condoleezza Rice decided not to come, citing Ariel Sharon’s illness; in her place Samuel Bodman, secretary of energy, headed the US delegation. Almost all the other delegates were middle-level bureaucrats, politicians, scientists working with the coal industry, and representatives of large polluting industries such as coal and aluminum smelting. The meeting was chaired by Australia’s minister for industry, Ian Macfarlane, who as late as 2005 was still publicly denying the reality of climate change. He has been hostile to developing the technology for renewable energy sources such as wind and solar power. In the leaked record of a meeting he held with executives from mining and energy industries in mid-2004, Macfarlane complained that government and private “investment in renewables was running ahead of the original planning,” i.e., too much was being spent to develop wind energy. Aware of the sensitivity of the issue, he demanded “absolute confidentiality” in order to prevent “a huge outcry.”¹ As with so many other meetings of energy industries and government, the AP6 meetings were held behind closed doors.

The concluding communiqué, issued on Friday, January 12, astounded many observers. It contained no specific targets or timetables for reducing emissions and imposed no incentives or penalties intended to influence the polluting industries. In view of the scale of the climate change crisis, the funds proposed to deal with it were pitifully small: Australia committed $75 million to be spent over five years, and the US pledged a one-time payment of $52 million. The Sydney Morning Herald, Australia’s most widely circulated broadsheet, called the AP6 plan “a do-nothing way of saving us all.”² Greg Bourne, the CEO of Australia’s World Wildlife Fund, who was previously head of British Petroleum Australasia, stated that the strategy would “lock us in to a four-degree rise in global average temperatures, when two degrees is considered extremely dangerous.”³ In place of concrete action and adequate funding, the AP6 communiqué reaffirmed the proposition that “fossil fuels underpin our economies and will be an enduring reality for our lifetimes and beyond.” The AP6 governments offered almost nothing by way of solutions; they have, in effect, handed over the issue of climate change to private industry. Eight task forces were set up at the meeting to prepare new approaches, each of them corresponding to an industrial reform or sector. The assigned subjects of the task forces were as follows: (1) cleaner fossil energy, (2) renewable energy and its distribution, (3) power generation and transmission, (4) steel, (5) aluminum, (6) cement, (7) coal mining, and (8) building and appliances.

Plans for cleaner coal are the responsibility of the cleaner fossil energy task force, which is to be chaired by Australia. Among its objectives is to make coal cleaner by removing from it “air-borne pollutants” such as fine particles, mercury, and sulphur dioxide. This initiative will have the effect of making Australia’s coal more acceptable to nations such as China that are becoming increasingly aware of the growing danger to their environments. But unfortunately it will also hasten climate change. That is because pollution by particles and sulphur dioxide are key elements of “global dimming,” which, by blocking sunlight, acts strongly to cool our planet. Removing them will have the effect of eliminating an important “brake” on climate change. And the methods used to achieve “clean coal” will exacerbate climate change in another way. The washing and treatment of coal before it is used and the use of scrubbers to remove sulphur dioxide when coal is burned all require energy; and this of course will come from burning more coal. Thus, paradoxically, “clean coal” will exacerbate climate change.

The hopes of the cleaner energy task force for dealing with CO2 emissions lie with capturing the carbon gas at the smokestacks and diverting it underground. The technologies required to do this are still being developed, and the changes involved are immense, for they will require the construction of an entire new generation of coal-fired power plants. Known as integrated gasification combined cycle (IGCC) plants, they will function more like complex chemical factories than conventional coal-fired power stations. The International Energy Agency estimates that the cost of producing power from such plants will be around three times that of conventional coal-fired power plants.

When we consider the urgency of reversing global warming, the AP6 strategy looks hopeless. It is widely acknowledged that two degrees centigrade of warming will precipitate catastrophic global climate change; and we can calculate the amount of carbon it will take to reach this threshold—around 530 gigatons. If we go on with business as usual, emissions produced by human beings will have reached this point by 2040. That’s just thirty-four years away. Because it is undeveloped and unproved, the amount of energy that IGCC plants will be contributing to the global electricity grid by 2040 is likely to be tiny. Far greater gains could be made from investing in existing technologies such as wind, solar, geothermal, and nuclear energy. Although the meeting in Sydney established a task force on renewable energy, the lack of interest in these technologies by the Australian and the American governments suggests that the AP6 countries are unlikely to shift away from reliance on coal.

Some leaders of the energy industries are increasingly concerned about the climate change initiatives of the US and Australia, for they place great reliance on industry to clean itself up, but do not provide the regulatory systems that would be required if such action is to occur. In the current economic environment, any industry that invests in reducing its emissions is effectively penalizing itself unless other industries are required to make similar investments as well. Paul Anderson is CEO and president of Duke Energy, the North Carolina–based electricity giant which burns 17 million tons of coal each year; yet Anderson is calling for a tax on carbon. “It gives you the flexibility to make intelligent investment choices,” he says, including choices to use substitutes for coal.⁴ One of the leading economists involved in climate change, Yale University’s William Nordhaus, has also recently advocated a carbon tax.⁵ The AP6 task forces will report back in the middle of 2006. If the cleaner fossil energy task force is to be effective, it should recommend a tax on carbon emissions.

The most positive aspect of the formation of the AP6 is the belated acknowledgment by the US and Australia of the seriousness of climate change. Both the Bush administration and the Howard government in Australia have now admitted that the current situation cannot go on. But they want to keep burning coal and at the same time have a stable climate—an impossible outcome. In the meantime the world’s hunger for energy grows unabated. The International Energy Agency estimates that between 2000 and 2020 the amount of coal burned will increase by 43 percent. It is unlikely that there will be a single profitable IGCC power plant in operation by 2020. The first demonstration plant, the delayed FutureGen project based in the US, is scheduled to open in 2012. This underlines the urgency of the threat facing the planet. If the use of conventional coal prevails over low-emissions technologies as a source of future energy, then we will lose the struggle to stabilize the earth’s climate.