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The US-Israel war on Iran has caused a surge in fossil fuel prices – again. A similar thing happened after Russia invaded Ukraine. Then it was gas, now it’s petrol and diesel.

The war has triggered a fuel crisis, and led to a surge in people considering buying electric cars. Meanwhile, a recent report found Australian federal and state governments will pay or forgo A$16.3bn in fossil fuel subsidies this financial year.

Adam Morton, Guardian Australia’s climate and environment editor, has written recently on the case for winding back the biggest fossil fuel subsidy – fuel tax credits – and for accelerating the shift to clean energy to help limit the impact of future shocks.

What steps could be taken, and what stands in the way?

Adam has now finished answering your questions. Thanks for taking part.

Can Australian households generate our own renewable energy?

jeroenspeculaas asks:

Adam, do you foresee an Australia where most people generate their own energy for domestic use and transport and what do you think the wider economic and sociological impacts of that would be? Would the country be better off or worse off?

Adam:

We’re a pretty significant way along that path already. More than 4 million Australian households have solar panels. That’s comfortably more than a third of all homes. That’s going to keep rising. Batteries and EVs aren’t as widespread, but are growing. There have been 290,000 household batteries installed since July under a federal subsidy scheme. EVs were 13% of new car sales last year - and we may see that jump given the fuel crisis. There are a lot more models available than a couple of years ago.

So, yes, it’s not hard to imagine a future where a majority of people are generating and storing energy at home and using it to charge transport. That would be great, obviously. It should mean a cleaner, healthier and ultimately cheaper daily life for the people who can do that, and diminished power for big energy companies. A big rise in battery use at times of peak electricity demand – in the evenings, mostly – should lower costs for everyone by taking stress off the grid at these times.

But there are risks if the take-up is not properly managed. People who cannot as easily afford home energy infrastructure – including renters and people in social housing – could be left behind and have to pay for escalating network costs. We will still be reliant on the electricity grid. How that is designed and how the costs are shared will be crucial. I think we will need a much bigger cross-society electrification push. If that’s handled well – if – I think we’ll pretty clearly be collectively better off.

How are global leaders affecting climate action?

isthisusernameinuse asks:

How great a threat is competition between global powers to climate action, and what are some possible solutions?

Adam:

A significant threat. Electing and installing leaders who will not start wars.

Could Australian mining use more renewable energy?

gregoriusthe2nd asks:

Since mining is the largest beneficiary of the diesel fuel subsidy (about 30% of the total, given to mining companies who pay little or no federal tax), shouldn’t the federal government scrap these subsidies for mining and reward electrification of mining with tax benefits instead?

But only if they pay actual federal tax (ie not a subsidy paid regardless of company earnings and profits).

Adam:

The short answer is: yes. The organisations arguing for a change to this subsidy – called the fuel tax credit scheme – want it either scrapped entirely for big miners, or capped at either $20m or $50m a year. That would mean miners could claim that much, but they would have to pay the fuel excise on the rest of the diesel they use.

Such a change would cut the cost of the scheme to the government (and taxpayers) by billions of dollars. That money could be used as budget savings or, more likely, redirected to projects that helped companies electrify their transport, or even directed to clean energy and electrification projects in other parts of the economy.

There is little appetite to cut the fuel tax credit scheme for farmers or other businesses, but it seems a no-brainer for big miners. At the moment it is an incentive to not clean up their transport fleets. This makes little sense. It is pretty clear it is at odds with another government policy, the safeguard mechanism, which requires emissions cuts at big mining sites.

It’s unclear whether the government will go down this path. There has been support within government for a change, but the fuel crisis has complicated the issue. There is a pretty strong case that the government shouldn’t be deterred and that a change is more justified than ever. Just today, the Australian Financial Review has reported that the Fortescue boss, Andrew Forrest, is still calling for the fuel tax credit to be slashed, and for the government to use the fuel crisis to accelerate the shift to renewable energy.

If Forrest is willing to foot that bill to remove a fossil fuel subsidy, why shouldn’t others?

Does Australia have ‘lamp-post’ charging for EVs?

anna23we asks:

I know that in London “lamp-post” charging is easy, cheap and in particular very accessible to the many without the possibility of having a charger at their home – it’s great. Do you see a strengthening of such infrastructure in Australia (I live in metro Melbourne)? My view is it needs some kind of encouragement from federal government.

Adam:

There are reasonably significant government programs to roll out charging infrastructure, but the short answer is they are not enough. Australia is well behind where it needs to be (as it is on EV takeup, generally). The responsibility lies with both government and distribution networks.

One of those networks, Essential Energy, this month announced a trial of streetlight-mounted chargers in rural and regional New South Wales, initially in 300 poles, with the potential for another 1,000 if private operators wanted to install their own chargers. It’s small and won’t help you in Melbourne. But hopefully it’s a sign of what’s coming.

What renewable energy should the government offer rebates for?

lazyguy asks:

The home battery rebate has been a resounding success. That follows the long-term success of rooftop solar. What area do you suggest the federal government and individual states should work on next?

Adam:

At a household level, electrification, including the rollout and integration of EVs.

We could be doing much more to help people – particularly those on low incomes and in rented and social housing – to have access to solar and batteries to boost energy efficiency in their homes. It saves money, improves people’s health and cuts emissions.

At a macro level, the Superpower Institute made a compelling case for two new taxes as part of a budget restructure: a “polluter pays levy” on companies that extract or import fossil fuels consumed in Australia, and a “fair share levy” that would lift the tax paid by local gas producers on profits from about 30% to just under 60%. Some version of the fair share levy seems more likely to appeal to the government. A polluter pays levy is basically a carbon tax, and the politics of that are considered too difficult, given Australia’s history of introducing and abolishing a carbon price more than a decade ago. The damage from that time lingers.

Also, they could perhaps stop routinely approving fossil fuel developments without considering the climate impact.

Should we electrify trucks or invest in rail?

nogapsallowed asks:

Australia’s biggest national security vulnerability is not the forever absence of the forward attack nuclear submarines we are paying an arm and a leg for, but our total dependence on road transport for our nationwide food distribution.

Is it feasible to electrify all the semi-trailers and B-doubles servicing our supermarket grid, or should we be making the rebuilding of our regional and interstate rail infrastructure that we turned into garden sleepers decades ago an urgent national development priority?

Few Australians can return to the food self-sufficiency of our grandparents during the Depression because the backyards for vegetable gardens don’t exist in any of the new housing developments.

Adam:

I’m not aware of cost analyses comparing electrifying trucks versus rebuilding interstate rail. I expect the answer may be a bit of both. But I think what’s clear is that there will be a big push on electrification out of this fuel crisis, and that may be able to be deployed faster in some areas.

There are already electric B-doubles on the roads. New Energy Transport is doing interesting work on this with trucks that can drive nearly 300km per charge and is worth checking out.

Are EVs really better for the environment?

IainHg asks:

A well-intentioned friend asked me if battery electric vehicles were worse for the environment than ICE [internal combustion engine] cars. I believe not, but couldn’t point her to anything concrete. I drive a hybrid because of its huge range. It uses two-thirds of the fuel of our last car. If enough people do this, are we at least helping to address climate change?

Adam:

Good question. It’s well established that battery EVs have much lower lifetime emissions than cars with internal combustion engines. That applies if you count the embedded emissions from making the car, and if charging the cars on most modern grids that still use fossil fuels to varying extents. The difference in climate impact will only get greater as power grids get cleaner.

A couple of references: this story from the Guardian from 2023 and this analysis from BloombergNEF.

Hybrids are, as you would expect, better than petrol and diesel cars and worse than EVs. So it certainly helps relative to when you were (presumably) driving a dirtier car, but it still releases pollution. Ultimately, the scientific advice is that we, all of us, need to wipe that out where possible, as soon as possible. We are in a transition period, with a greater range of EVs just coming on to the market in Australia after a slow start, and charging infrastructure still being installed. Hopefully that will soon address people’s concerns about driving range. And hopefully federal and state governments will use the fuel crisis to do more to encourage EV uptake.

How secure is Australia’s renewable energy supply chain?

Nadsieb asks:

I’ve been a long-term fan of renewable energy and see how this crisis might finally provide some real momentum. There was an interesting point made on a US podcast I listened to about viewing renewable energy as a solution from an “energy security” perspective which I’m interested in hearing an Australian perspective on. While renewable energy is not importing fuel, the supply chain is entered in China which means it’s still vulnerable to geopolitical challenges and potential leverage. China has been smart in their investment in “future tech” and a centre of excellence for manufacturing. How does Australia safeguard the Capex/Opex supply chain, particularly understanding the threats to Taiwan, which could threaten the peaceful trading relationship?

Adam:

You’ve highlighted a significant issue. While the US under Donald Trump (and previous presidents) has been rapidly expanding its gas export industry to become a petrostate, China has been positioning itself as what people have described as the world’s first “electrostate”. Other countries, including Australia, have allowed it extraordinary control over all sorts of supply chains, including for renewable energy. Carbon Brief calculated that Chinese clean energy exports in 2024 reduced global emissions outside China about 1% below what they otherwise would have been. That trend is expected to continue and expand for decades.

Australia has been slow to wake up to what this could mean if supply chains were disrupted. The Albanese government’s Future Made in Australia policy was partly designed to be a response to this. It includes tax credits and other incentives meant to kickstart green industries. And the government has also offered support for the manufacturing of solar panel parts through a program called Solar Sunshot.

But the broader issue remains. Chinese goods are produced at an extraordinary scale and generally much cheaper than what can be made here. It’s hard to see how a local solar manufacturing industry, for example, could be globally competitive even with significant public support. That gives Beijing great leverage. I imagine we’re going to be hearing a lot more about what energy and supply chain security means in the days and years ahead.

Will Australia ever go to nuclear power?

BoomerJohn asks:

Over 30 countries worldwide operate nuclear power reactors and 15 or so countries are building new nuclear power reactors right now. China alone is building some 37 reactors at present. Most advanced countries have nuclear power. Why is it that Australia is so recalcitrant in this regard?

Adam:

This was obviously a huge focus at the last federal election, when the Coalition promised to eventually (mostly in the 2040s) build taxpayer-funded nuclear plants at seven sites. It didn’t land as a policy for a range of reasons. Key issues were cost and need.

Australia has extraordinary amounts of sun, wind and space. Multiple studies have found that renewable energy supported by storage and “firming” options – rapidly evolving battery technology, pumped hydro, demand management, better region-to-region transmission connections – and with occasional backup from fast-starting gas plants can do the job and are the cheapest solution here.

Starting a nuclear industry from scratch would cost an extraordinary sum. Establishing a regulatory framework alone would take years. And recent evidence suggests the generators are difficult to build on time and on budget. The few nuclear plants built this century in wealthy democracies comparable to Australia have suffered huge overruns. Experts say it is highly unlikely they could be built in Australia by the time they were needed to replace the country’s ageing coal fleet. Renewable and supporting infrastructure can be.

Nuclear energy certainly will be needed to replace fossil fuels in many other countries that do not have Australia’s renewable resources, particularly those that already have nuclear industries. There is a case that it makes little sense for Australia to maintain its ban on nuclear power. If nuclear technologies were to develop – small-scale systems that could run a remote mining site, for example – and costs were to come down, that might be worth considering.

But to date, the push for nuclear in Australia has mainly come from people who either don’t believe in or don’t like renewable energy. It has been used by some as a delay tactic to extend the life of coal power. That isn’t a climate solution.