The path to solving climate change is not to halt progress through restriction, but to accelerate it through breakthrough innovation that drives energy abundance.
Our current policy playbook is making us poorer as it continually overlooks the immense value of human ingenuity and technological progress.
We urgently need a reset in how we think about energy and emissions reduction, shifting from doomsday narratives towards rational policies that prioritise strategic investment in research and development, and innovation.
The political debate over climate change needs a reset. People are increasingly turning away from the issue because they believe current policy solutions are not sound. They sense that the old playbook, focused on taxes and regulatory change, is destroying our standard of living while doing little to dent the problem of emissions. Instead, whole industries are in trouble, with the Tomago facility the latest in a string of closures due to high energy prices.
While people in our community care about emissions reduction, their No. 1 priority is the standard of living, which they know is ultimately driven by cheaper energy. Annually, the CPI surged to 3.2 per cent in the year to September, with the main contributor being a 23.6 per cent rise in electricity costs. Even Bill Gates has called for a reset to our approach to climate change, stating there is too much focus on near-term emissions at the expense of development.
Future emissions will come from developing countries like China, India and Africa. And while we wring our hands and read Chris Bowen's catastrophic proclamations in the national climate risk assessment, the developing world resents being denied investment in energy necessary for their industrialisation, simply because it is not "green." They believe, correctly, that they have a right to develop and choose the best path forward.
This political impasse is magnified by inconvenient truths. Despite the explosion in renewable energy, fossil fuel demand is rising. In 2024, China initiated construction of 95 gigawatts of new coal-fired energy – the highest in nearly a decade. Global demand for development inputs like steel and cement is set to increase by 40 per cent to 50 per cent by 2050. Airline travel is set to double in the next two decades. These are critical activities for which wind and solar are inappropriate. Yet, no reliable, commercially scalable alternatives exist, and global emissions continue to rise.
Any strategy based on either phasing out fossil fuels in the short term or limiting consumption is, therefore, a strategy doomed to fail and will eventually trigger even greater community resistance to climate policies. We need a reset in the political mandate, attainable only through a shift from activism to pragmatic policy.
This is where the policy reset must begin: by prioritising technological value over punitive pricing. The world will always choose the cheapest option. Our goal cannot be to make carbon expensive through taxation and regulation, but to make low-emission options the cheapest and most viable choice.
Scale-up of carbon capture must be central to the global strategy. The scientific consensus holds that significant carbon reduction is impossible without global scale-up of point-source capture and direct-air removal.
Australia's Gorgon project has stored over 9 metric tonnes of emissions. This one facility sequestered more than the entire 6.5Mt of emissions reduction achieved nationally this year. Imagine what more of these facilities can do for our emissions profile, and industry.
It is also time to embrace nuclear power. Which must be part of our energy mix. The cross-fertilisation of nuclear energy with nuclear weapons and the resulting irrational fear has led to an egregious policy error, with Chris Bowen recently equating nuclear power with Hiroshima. Reactors being built today utilise generation IV designs which are dramatically safe, scalable and reliable. Australia is already a major uranium exporter; we should harness this for our own home.
Finally, our policy must embrace bilateral cooperation. Focusing exclusively on our domestic emissions is a piecemeal approach to a systemic international problem.
By investing in frontier technologies, we can help our neighbours like Japan and Singapore with energy security and in sequestering their carbon emissions, yielding vastly larger emissions reductions globally than any isolated local measure and building a brand new industry at the same time.
Let's be innovative and forward-thinking, not purist in our approach to climate change. Energy abundance has always driven human progress and prosperity and it can help drive emissions reductions as well.
Published in The Australian Financial Review
