On Wednesday a report by Sky News quoted a leaked email from the United Kingdom Business Secretary, which gave approval for two clauses to be dropped from the UK - Australia Free Trade Agreement (FTA). The two clauses provided, firstly, that environmental policies should take precedence over trade matters. Secondly, both countries were to adopt targets consistent with keeping the rise in global warming to less than 1.5 degrees more than the temperature at the end of the industrial revolution.
Australia objected to these clauses on the basis that environmental matters should be confined to environmental agreements and that the clauses were inconsistent with international trade law. Article xxiv of the World Trade Organisation rules, which govern free trade agreements, states that all trade must be substantially free of tariffs and restrictive regulations of commerce, for an agreement to be legal. The imposition of environmental restrictions is inconsistent with this.
The Sky News report was greeted with an uproar in London and Greenpeace claimed that it destroyed Britain’s credentials to be a leader at the climate change conference in Glasgow in November.
Lord Devon, a conservative peer, attacked British prime minister, Boris Johnson, for making concessions to a recalcitrant Australia. The chorus was taken up by the ABC and the Guardian in Australia.
In an ironic twist, at the same time as the pile-on was happening, Britain was forced to rely on coal-fired power to keep the lights on, when renewable energy failed.
Britain is experiencing above-average temperatures at the moment, which has led to a fall in wind generation at the same time as the demand for power for air conditioning increased. Wind power normally provides 18 per cent of total generation but this fell to 5 per cent. As a consequence, power prices literally went through the roof and the regulator (OFCOM) was forced to lift the cap on prices. The sky-high prices still couldn’t get enough power into the grid so authorities had to mandate the rebooting of two mothballed coal-fired power stations.
The crisis revealed that in the headlong rush to achieve zero emissions by 2050 the British authorities had neglected to make appropriate arrangements for backup dispatchable power. As a result, they have been caught short and a number of critical industry sectors have been obliged to close down so the grid can deliver power to essential services and ordinary users.
The same push for 100 per cent renewable power has been prominent in Australia, promoted by the Greens and the renewables industry.
In response, the Energy Security Board led by Dr Kerry Schott, has produced a plan which mandates that retailers must be able to guarantee that they have access to sufficient dispatchable power to keep the grid fully operational. Owners of backup power will be able to ley a capacity charge even though their generation may be dormant for most of the time.
The renewables sector has arced up at this proposal saying that they should not have to bear the cost of backup power.
When the prime minister was asked about the targets in the FTA at his press conference on Thursday, he said that Australia always met its international commitments. He said that Australia had reduced its greenhouse emissions by 20 per cent since 2005. This was a lot better than many countries that subscribed to targets.
In fact, Australia is doing very well in reducing its GHG emissions and is likely to sail through a 45 per cent reduction by 2030.
It will be the period between 2030 and 2050 that will require a technological revolution if zero emissions are to be achieved.