The push to net zero could spur de-industrialisation in certain sectors of the Australian economy, says an emeritus professor at the University of Melbourne.
“We are grinding our way slowly towards [the net zero target]. There will be industries that will close down. The first one will be the aluminium smelting industry. Those people will lose their jobs because aluminium requires a huge amount of energy to make,” Prof. Ian Plimer told ADH TV on Aug. 9.
“The next industry would be the zinc smelting industry, that also is where you have a lot of embedded energy,” he added.
“Then the average punter will actually feel this and that’s when governments get scared because we will have blackouts.”
Given the energy intensity of both processes, the aluminium and zinc smelting industries rely on affordable wholesale energy prices, which could be impacted by the transition to intermittent energy sources. Around 17,000 kWh of electricity is needed to produce just one tonne of aluminium while each metric ton of zinc needs 3,900 kWh.
The production of both metals contributes to the national economy.
As the world’s sixth largest supplier, Australia’s aluminium production was 1.51 million tonnes in 2022. Australia is also the largest smelter and producer of zinc globally, housing 20 percent of the world’s identified reserves.
Mr. Plimer also made some bold projections regarding the future of Australia’s sovereignty and our potential over-reliance on international supply chains.
“We are strategically exposing ourselves. We rely on the sea waves to keep this country alive and if we do not wake up soon we are exposed in terms of our sovereignty, we are exposed in terms of our energy, in terms of our food production,” he said.
“We are facing very serious times unless we have cheap reliable energy that is not dependent upon people outside this country.”
Australian Manufacturing in Decline
Indeed, there is evidence to suggest that at least in the short-term, governmental policies recently introduced in line with decarbonisation ambitions will hinder the ability of some industries to stay afloat and remain cost-competitive, particularly in the primary sector such as farming and manufacturing.Further, these extra costs are typically passed down the supply chain.
The latest data collected by the Australian Energy Regulator (AER) revealed that New South Wales alone experienced a 100 percent increase in its wholesale energy prices since the start of the 2020-21 financial year.
In the same timeframe, Australia’s manufacturing sector lost 40,500 jobs, according to government figures.
The agriculture sector is experiencing similar hurdles.
In the timeframe between the middle of both 2020 and 2023 when Australia experienced a surge in wholesale power prices, 31,700 jobs were lost in agriculture.
The West Pushes Towards Net Zero Despite Beijing’s Actions
Over 140 nations announced concrete emissions reduction targets, but there remains uncertainty over the legitimacy of the commitments from some of the world’s biggest emitters.In late July 2023, the U.S. presidential envoy for climate, John Kerry visited Beijing, and Chinese leader Xi Jinping
“China will decide its own path in achieving carbon goals and will not be ordered about by others” said the Chinese leader.
Yet Mr. Xi’s statement is at direct odds with China’s commitment to the Paris Climate Accord made in 2015.
In its documented pledge, China formally agreed to peak its carbon dioxide emissions around 2030, lower its carbon dioxide intensity by between 60-65 percent from 2005 levels, increase the share of renewable energy in primary energy consumption to 20 percent as well as increase forest stock volume by around 4.5 billion cubic meters from 2005 levels.
Considering that the Chinese Communist Party’s (CCP) permittance of the construction of coal-fired power plants increased dramatically throughout 2022 to its highest levels since 2015, doubt has been cast internationally over the regime’s willingness to comply with global efforts to rapidly decarbonise.
American economist Diana Furchtgott-Roth has rendered the Western world’s efforts towards net zero fruitless assuming Beijing retains un-contested autonomy over its decisions on carbon emissions.
“Xi’s remarks should resound in the halls of the Environmental Protection Agency, which is planning to impose billions of dollars of costs on Americans to reduce emissions. China has repeatedly stated that it has no intention of going along with the Western push to net zero,” she told the Heritage Foundation.
“Because Xi has explicitly and repeatedly said that his country will not reduce emissions until energy from renewables replaces that from coal-fired power plants, all these costs will result in on reduction in global emissions. The EPA has America on a path to all pain and no gain.”
