Chris Bowen Calls for an Absolute End to Fossil Fuel Usage

Industry and business leaders have urged Bowen to hit the breaks and slow down the transition to renewables.

Australian Energy Minister Chris Bowen speaks to the media during a press conference at Parliament House in Canberra, Australia, on Sept. 18, 2023. AAP Image/Lukas Coch

Energy Minister Chris Bowen has declared that the Australian government doesn’t plan to budge on its current climate targets, reiterating a call for the permanent end to fossil fuel usage within energy systems.

With COP28 coming to a close today, Mr. Bowen addressed a crisis meeting at the conference after its most prominent delegates failed to reach a consensus on fossil fuels.

“If we are to keep 1.5C alive, fossil fuels have no ongoing role to play in our energy systems, and I speak as the climate and energy minister of one of the world’s largest fossil fuel exporters,” Mr. Bowen said.

“We embrace that fact and acknowledge it because we also live in the Pacific and we are not going to see our brothers and sisters inundated and their countries swallowed by the seas.”

The crisis meeting was called by COP28 president and Emirati politician Sultan Ahmed Al-Jaber to spur dialogue between a majority of nations advocating a full phaseout of fossil fuel usage and oil-exporting states seeking to preserve their national wealth.

Mr. Al-Jaber has previously stated that there was “no science” to support the idea that by completely phasing out fossil fuels, the world could be able to suppress global warming to the 1.5 Celsius threshold outlined in the Paris Agreement. He added that such a transition would revert humanity to the preindustrial times.

Much of the economic prosperity enjoyed by the UAE along with other petrostates like Saudi Arabia, Iran, Brunei, and many more derives from oil. The commodity constituted 18 percent of the UAE’s GDP in 2021 and 23.7 percent of Saudi Arabia’s.

These nations are thus concerned with the impact of global energy transition on their economies.

According to a report from the Carbon Tracker Initiative, a London-based think tank that researches the impact of climate policies on financial markets, 28 out of the world’s 40 petrostates would lose over half of expected revenue in line with projected global decarbonisation efforts.

This year’s draft text for COP28—a draft agreement specifying climate goals for participating countries—has omitted references to the phasing out of fossil fuels due to the stark division between nations. As such, a large-scale deal is unlikely to be brokered with today being the conference’s last day.

Greenflation

Closer to home, Australian business leaders and representatives have warned against the current expedited transition from fossil fuels to renewables, arguing that its practicality is highly contentious.

Innes Willox, CEO of Australian Industry (Ai) Group said that although the transition is inevitable, its speed must be carefully calibrated to mitigate risks posed to industries.

“There is no doubt fossil fuels will play a reduced role in our future but we can’t just jump from fossils to a wholly renewable economy overnight. The consequences of pushing too hard, too fast would be calamitous,” he said.

Andrew McKellar, CEO of the Australian Chamber of Commerce and Industry (ACCI) concurred.

“The government’s commitment is to net-zero emissions within that time frame, not to absolute zero. We would be concerned to clarify whether Mr. Bowen’s statements are consistent with existing targets or whether something new or different is envisaged. Business is looking for the highest level of certainty that it can get,” he said.

Australia’s energy transition is having and will continue to have a number of diverse ramifications on the private sector for both business owners and workers.

Research suggests it will disproportionately affect the nation’s less affluent in two ways.

The first is employment. According to research from the Centre of Policy Development, an independent think tank, over 300,000 jobs connected to primary industries surrounding coal, oil, and gas exports will be impacted by 2050.

These industries are already experiencing a decline as global demand for these commodities drops in the wake of the transition.

Then there is inflation, which disproportionately affects people living on lower incomes as goods most susceptible to price hikes take up a larger share of their household budgets.

When prices increase, middle and high-income earners can simply downgrade to cheaper alternatives. Lower-income individuals don’t have access to that luxury. In most cases, they are already purchasing the cheapest goods available.

A swift energy transition away from fossil fuels is inflationary given the transitory periods needed to build renewable energy infrastructure whilst fossil fuels are phased out and therefore absent from the grid, a predicament conducive to power supply shortfalls.

According to Q3 figures produced by the Australian Bureau of Statistics (ABS), electricity prices rose 12.7 percent from the previous quarter. In the same timeframe, the consumer price index (CPI) rose 5.2 percent.