Interview: A Life And Death Matter
Unions: Fighting Back
Industrial: What Cowra Means
Environment: Scrambling for Energy Security
Politics: Page Turner
Economics: The State of Labour
International: Workers Blood For Oil
History: Liberty in Spain
Review: Go Roys, Make A Noise
The Locker Room
Scrambling for Energy Security
Federal Government duplicity is highlighted by its approach to the United Nations Framework Convention on Climate Change.
Australia was an enthusiastic founding participant in the negotiations that resulted in the Kyoto Protocol, so much so in fact that it won considerable concessions when greenhouse gas emission targets were set for the developed countries under the terms of the Protocol. Yet, despite this, the Howard government, mirroring the position of the Bush administration, has refused to ratify the Protocol. Even though the Protocol has now been adopted and some mechanisms to enhance management of CO2 emissions have come into force, Howard and Bush remain steadfast in their refusal to join the 164 countries that have ratified the Protocol.
The Asia Pacific Partnership (A-P6) is the child of the Bush administration's efforts to construct a global order that secures the future of the energy-intensive American economy.
The Howard government has proved an enthusiastic supporter of this agenda because it is premised on ensuring continued reliance on fossil fuels, and would thus help contribute to consolidating the resource-based export sector. The Partnership should be seen for what it essentially is, principally a program to engineer 'energy security'. This provides the Howard government with the institutional and political imprimatur to continue to push coal as king.
'Energy security' has been the key in capturing the interest of the other parties to A-P6, Japan, South Korea, China and India, each of whom has ratified the Kyoto Protocol, in the alternative agenda of the Partnership. This support, it should be noted, has not been unequivocal. At the January forum delegates from Japan and South Korea sought to make clear to correspondents representing their respective national media. that A-P6 did not represent a watering down of their commitment to the Kyoto Protocol.
The identification of 'energy security' as a key objective of the A-P6 project must necessarily be situated in the international security mix. The Partnership provides a neat segue of this because one of the key drivers in the Bush administration's ambitions has been with drawing China, in particular. into a multilateral forum with the objective of reconciling its rapidly expanding claim on energy supplies with the energy demands of the other major industrial economies of the region. However, this has been particularly problematic because China's thirst for fossil fuels has gathered pace, and its success to satisfying this thirst has been the result of an assertive program of securing energy through through negotiating inter-state alliances.
An increasingly assertive China has brought a shift in the balance of global political forces and, more importantly, an unsettling of US hegemony. The Bush administration has been keen to redress this. We can see this being played out in a scramble for energy security, with the US blocking the takeover of the American owned and based Unocal by China's state oil company, China National Offshore Oil Corporation Ltd.
This endeavour to contain Chinese expansionism has also been manifest in a radical shift in US security policy especially as it pertains to 'energy security'. The Bush administration has sought to promote countervailing political forces in the Asia-Pacific region through security alliances with Japan and Australia, and separately with India. This latter alliance has been bound up with a rewriting of the Cold War strategic order with the US proposing to afford India some relief from the intensity of competition in global energy markets by offering access to US nuclear technology for 'civilian use'. (In a comparable vein, Taiwan has negotiated the purchase of Australian uranium through American mediation.)
These proposals dilute the security foundations of the Cold War order because neither India or Taiwan are signatories to the Non-Nuclear Proliferation Treaty, and the Treaty proscribes the supply of nuclear technology to non-signatory states. The Bush administration has proposed that as a substitute, India would have to submit to regular International Atomic Energy Agency inspections, but this would not override the fact that US would be effectively and unilaterally undermining the Treaty.
The Howard government has had a longstanding ambition to expand uranium exports. A joint government-industry committee, the Uranium Industry Framework Steering Committee, was formed in August 2005 to investigate the economics of establishing nuclear enrichment and nuclear power plants in Australia. The committee's deliberations gained more momentum following Bush's February 2006 announcement of a proposal to form a Global Nuclear Energy Partnership, a partnership of the major nuclear fuel supplying nations.
The GNEP was being flagged as a vehicle for putting in place a system to manage and regulate the movement of enriched uranium as a safeguard against supplies reaching rogue states and terrorists. Howard's interest in becoming a member of the GNEP was ignited in February on a state visit to Washington, and the idea of uranium supplying nations joining the GNEP was immediately taken up by Howard with the newly-elected conservative Canadian Prime Minister, Stephen Harper.
Mixed messages about the nature of the Howard government's involvement in what amounts to a move to dismantle the Non-Proliferation Treaty are being presented to the Australian public. Initial reports indicated enthusiasm for active involvement and the endeavour to draw Canada into the process. Subsequently, reports advised that uranium suppliers would not be invited into the GNEP.
A Howard business confidante, the chair of the government's Uranium Industry Framework Steering Group, John White, shed a different light on this in declaring that: "The development [that is participation in the GNEP] will elevate Australia's strategic standing in the world to unprecedented levels." The connections between Howard's ambitions to secure Australian membership of the GNEP are just too neat because White also happens to have been a member of the four-member Nuclear Fuel Leasing Group that had developed the business plan behind the GNEP. He also had a personal financial interest in encouraging Howard to seek membership of the GNEP because he has been active in lobbying the government to win approval and support to establish a nuclear enrichment plan at BHP-Billiton's Olympic Dam in South Australia.
A-P6 has provided a platform for the Howard government to promote the economic and supposed environmental benefits of uranium mining, uranium enrichment and nuclear power. In so doing, Howard is pushing beyond the aspirations of the normally supportive Minister for Industry, Tourism and Resources and what he had previously committed the government to doing.
Clean Coal and Uranium Enrichment
The Howard government has had no compunction in overlaying its 'clean coal' agenda with the uranium-nuclear industry counterpart. The ANSTO-commissioned report by James Gittus has placed the possibility of government-backed nuclear power as both an economic option and athe basis of the multi-pronged strategy to engineer an emissions-free future.
The recently-established uranium task force, to review the uranium mining, processing and nuclear energy in Australia will likely endorse this energy road map because of the promise of the considerable economic benefits that would be generated from the expansion of uranium exports. To this must be added the prospect of value-added exports in the form of enriched uranium.
This future is not without cause for concern. The Bush administration's agenda introduces an unsettling regulatory climate to the nuclear age. The GNEP, for instance, proposes a scheme based on countries producing enriched uranium leasing the uranium rather than selling it. Supplying countries would assume responsibility for tracking the enriched uranium and the eventual storage of the nuclear waste. The proposal is the basis of the US's agreement to supply nuclear technology for civilian purposes to India. In this particular case, the utilisation of the technology would be subject to regular monitoring by the International Atomic Energy Agency. The arrangement circumvents the Nuclear Non-Proliferation Treaty and its many safeguards, including the ability to apply sanctions, and it is questionable as to whether this will provide comparable protections.
This is even more of a concern with respect to the GNEP proposal to liberalise international sales of uranium through a leasing instrument. Even if overseen by the IAEC, it is doubtful that such a scheme could provide for the failsafe management of enriched uranium. Being a signatory to the Treaty has not stopped China from transferring nuclear weapons technology to North Korea, Pakistan, Libya and Iran. This turn to a nuclear future carries with it enormous risks for global security.
The GNEP proposal raises serious questions about the integrity of the Howard government. Assurances that Australia will continue to abide by its Treaty obligations are specious. India is not a signatory to the Non-Proliferation Treaty, and the supply of uranium to India would undermine the whole rationale for the Treaty. Charging the IAEA with monitoring the use of Australian-supplied uranium, as opposed to Indian-sourced uranium, would prove a formidable task. As it is, the Agency has difficulty monitoring effectively the responsibility of signatory states to ensure they abide by the terms of the Non-Proliferation Treaty. There is also the worry that substituting multilaterally negotiated Treaty by the Bush-engineered GNEP merely extends opportunities for further politicisation of who wins the right to secure access to uranium and nuclear technology, as might be appreciated by a moment's reflection on the Bush administration's campaign against Iran's nuclear development program in contrast with its silence on Israel's program.
The government clearly wants to piggyback on the momentum that will be engendered by the GNEP. However, the essence of this scheme is to open up the world uranium market to a leasing and nuclear-waste return arrangement. Howard is being quite disingenuous in indicating Australia's determination to be a member of the GNEP and simultaneously arguing it will not be a repository for nuclear waste. The plans for a local uranium enrichment industry being promoted by the Chair of the Uranium Industry Framework Steering Group are quite explicit in incorporating plans for the return transport and storage of nuclear waste.
Setting aside issues related to the safe storage of nuclear waste, as well as security concerns the management of waste would engender, there are other challenges that must be confronted with this notion of the ostensible nuclear solution to greenhouse gas emissions and global warming. There is little immediate prospect that committing to a nuclear-powered future can arrest the pace of global warming. The opposite is the case in the immediate short run. The construction of nuclear power plants requires huge capital outlays and is an energy-intensive process in its own right. Nuclear plants are simply not economically competitive with other energy sources. There would be a long lead-in time between the planning and construction of the plant before it even began to generate emissions-free electricity.
Nuclear power is not about to displace coal-fired power plants. The application of 'clean coal' technology is some way off yet. The introduction of the technology will only make economic sense when adopted with the construction of new power plants, and the effectiveness of geosequestration is necessarily contingent upon access to suitable geological storage sites. The question as to how to most constructively respond to the challenge of global warming remains.
The A-P6 forum, as a vehicle designed to institutionalise Australia's commitment to coal as a primary energy source, has served to underscore opposition to the government's position. Setting aside the platform that was provided for a discussion on the import of uranium and nuclear power, the failure to open the forum to consideration of other energy sources demonstrated a surprising degree of political ineptitude. The surprise omission from the forum's agenda of natural gas, which meant that representatives of suppliers and exporters of natural gas were excluded from the forum, aroused the ire of the industry. Industry representatives' dissatisfaction with the Prime Minister has intensified with the government's refusal to entertain re-negotiating contract prices for gas supplied to China.
Confidence in the political adeptness of the Howard government is also eroding within the broader business community in response to the unquestioning commitment to the resource sector and energy-intensive industries. Australian corporations are beginning to calculate the prospective lost opportunities consequent upon their inability to participate in the global carbon trading system that is being established under the terms of the Kyoto Protocol. Paradoxically, State governments are taking the lead to establish carbon trading markets in response to the growing demand within the business community, and these initiatives have been publicly supported by prominent business executives.
Several of the larger Australian corporations have signalled their lack of support for the Howard agenda by embracing business systems that are consistent with a Kyoto Protocol-based emissions management order. Carbon emission accounting systems and in-house CO2 trading systems have been established by a number of companies. Many large companies have committed to the Global (carbon) Disclosure Project, and considerable pressure is being brought to bear by investment funds and insurance companies to demand that publicly-listed companies report on energy-efficiency standards and emissions management strategies.
Prominent corporate executives have become openly critical of the government's backward-looking approach to the management of greenhouse gas emissions. There have been several business lobby groups formed over the last couple of years to bring about a change of approach, if not by the government, then certainly in corporate Australia. The Insurance Australia Group, the umbrella organisation of a group of private insurance companies, in partnership with the WWF, formed the Australia Climate Group in 2003. It provides an organisational base for other financial institutions and superannuation funds to air their concerns about the consequences of climate change.
The formation of the Business Roundtable on Climate Change marks an even more profound shift in the business community because it brings together the chief executives of several of the largest corporations in Australia, and the Australian Conservation Foundation, with the purpose of lobbying for changes in government policies to address the risks associated with climate change and to begin putting a price on carbon. The Roundtable's report The Business Case for Early Action advocates immediate action to substantially reduce greenhouse gas emissions if the cost of global warming and the likely costs of having to adapt to climate change are to be minimised. One of the Roundtable members, Westpac's chief executive officer, is also spearheading a move to have the Business Council of Australia fall in behind this lobbying effort. This marks a fundamental shift in the peak corporate lobby group which under the chairmanship of Hugh Morgan, the former Western Mining Corporation CEO, was resolutely opposed to any mandating of emissions targets.
It is increasingly recognised that the Howard government's preoccupation with promoting the continued expansion of the fossil fuel export sector and energy-intensive industries is failing to address the fundamental challenge of climate change. It is quite evident that there has been something of a sea change in thinking across corporate Australia. Interestingly enough, even the confidence of executives of coal mining companies in the future of their industry appears to be in question. Some have raised with State governments the difficulties they perceive in securing insurance against carbon risk. In seeking government sanction of new mining projects and energy-intensive enterprises, they are impressing on government the possibilities for public indemnity against the possible imposts that could be imposed on greenhouse intensive activities were mandatory carbon trading systems introduced.
It may well be the case that corporate Australia's engagement with the challenge of global warming could also engender a subtle change in the Howard government's opposition to the ratification of the Kyoto Protocol. The inclusion on the uranium mining, uranium enrichment and nuclear power taskforce of economist Warwick McKibbin, may well be an orchestrated move by the government to prepare the ground for a policy change aimed at reconciling the tensions within corporate Australia between those concerned with global warming and those who want nothing that would impose costs or restrictions on resource and energy-intensive industries.
McKibbin has been a vocal advocate of carbon pricing as an alternative to the Kyoto Protocol. The terms of reference do not go to the question of the Kyoto Protocol. But there is the prospect that the taskforce could recommend that uranium be placed on a level playing field with coal by taking into account the economic costs of coal associated with CO2 emissions, and this could take the form of a carbon tax. No doubt, the Howard government would see political advantage in such a compromise position
The invasion and occupation of Iraq by the US-led 'coalition of the willing' has served to exacerbate another dimension to how the energy crisis is being played out. The Howard government has tied its fortunes very firmly to the mast of this order, but it should be abundantly clear that the durability of the US-dominated global energy order is in question. Certainly the Bush administration's efforts to re-establish its hegemony are merely serving to promote greater instability and insecurity. The Howard government is now having to confront some of the formidable costs of this marriage. The escalation in oil prices, and the inflationary pressures this has engendered, will likely emerge as a critical catalyst in sharpening the edge on debates on the future viability of the fossil-fuel based military-industrial order. This will almost certainly bring to the fore the strength of public and business confidence in the capacity of the government to manage the growing uncertainty.
Stuart Rosewarne is Senior Lecturer in the Discipline of Political Economy at the University of Sydney. He is the co-editor of the Journal of Australian Political Economy and of Capitalism, Nature, Socialism.
Stuart is also the President of the NSW Division of the National Tertiary Education Union
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