Challenges of the Age webinar September 2021: speech by Dr Alan Finkel

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1 September 2021

No doubt in common with all of you, I have been inspired by the thrilling competitions in the recent Olympic Games.

But, as I watched, I found myself pondering: what is required to deliver those golden Olympic moments? Winning gold calls for not only big ambition, but also a pragmatic and effective training plan. Yet, there is one often overlooked element that can derail an athlete’s Olympic dreams – consumer demand.

Since the inaugural modern Games in 1896, over 40 sports have been dropped – primarily due to a lack of consumer interest. Fancy yourself the world’s greatest croquet player, kite flyer, or pigeon racer? Sorry, you’re over a century too late to display your talents on a global stage.

In their place, we have a slew of new sports, based on consumer appeal and popularity.

In Tokyo, we witnessed the Olympic debut of skateboarding, surfing, and sport climbing; with breakdancing set to be introduced in Paris. We live in a consumer driven world. Demand drives supply. 

So it is in the Olympic Games. And so it is in the energy sector.

Citizens of modern civilisations expect readily available, affordable energy. You can’t eliminate this demand by withholding supply. Fossil fuel divestment simply allows less transparent, less scrupulous providers to fill the void. 

There is a limit to what you can achieve by making consumer products more expensive through taxes.

And targets alone are not enough. Any Olympian will tell you that ambition to win without turning up for training is just fantasy.

To really make a difference, you have to give consumers a cost-effective, low emissions alternative that makes the incumbent obsolete. 

In Olympic terms – for coal to go the way of croquet, we need solar electricity to be as attractive as skateboarding.

Making low emissions technologies the economical choice

As Chair of the Advisory Council for the Australian Government’s low emissions technology roadmap, I can assure you that the Australian Government and the members of the Advisory Council are focusing on driving down the price of zero-emissions electricity, hydrogen and other technologies so that they become the economically rational choice.

By doing so, we can cut emissions as well as produce jobs and export opportunities.

In the immortal words of Boris Johnson, we are aspiring to “cake, have, eat”. The message is getting through.

Let me give you a couple of examples.

Green aluminium

Australia’s single biggest energy user is the Tomago aluminium smelter near Newcastle. This one manufacturing site is responsible for approximately 5% of the national electricity market emissions. 

Tomago needs to operate 24 hours a day. A power outage of 2 hours would cause catastrophic damage measured in hundreds of millions of dollars.

To date, coal fired electricity has been Tomago’s only viable option. And yet, last month, Tomago’s CEO vowed to switch to 100% renewable electricity by 2029.

This decision was not the result of a legislated requirement. Why did the CEO make that commitment? Two reasons.

First, price.

Today, although intermittent solar and wind are already cheaper than coal per megawatt hour, they become prohibitively expensive when augmented to ensure a constant supply.

But, by 2029, the giant Snowy 2.0 pumped hydro storage dam will be online and connected via new transmission lines to Newcastle. Battery storage will be cheap and abundant. Solar and wind generation will be yet again cheaper.

Combining all this progress, Tomago will be able to purchase zero-emissions electricity for the same reliability and low price as high-emissions coal fired electricity, so why wouldn’t it make the switch? 

Which brings me to the second reason: customer demand.

Given comparable prices, customers will always prefer the green alternative; especially after the ‘Code Red’ alert of the recent IPCC report.

Understanding this, Apple recently purchased the world’s first batch of green aluminium, from an Alcoa and Rio Tinto joint venture.

Two weeks ago, Sweden’s SSAB produced and supplied the world’s first fossil-free steel to car company Volvo.

The message is clear, and Tomago recognises it risks losing a significant share of the market if it doesn’t decarbonise.

Well, that’s human beings. But what about bovines?

Carbon neutral livestock

For my second example, consider that livestock directly account for around 10% of Australia’s greenhouse gas emissions.

One small burp from a cow, one giant problem for humanity.

Knowing this, the meat and livestock industry in Australia has committed to be carbon neutral by 2030. Why? Because they see opportunity in adversity. 

They realise that they will have a marketing advantage if they can offer zero-emissions meat and dairy products to customers. And they have Australian science and seaweed on their side.

Why do cows burp methane? Are they angry with humanity? 

Perhaps, but they burp because their stomachs are full of parasitic bacteria that steal some of the nutrients in the food the cows have swallowed. 

These bacteria release methane as a by-product. But, what if I told you we can reduce methane emissions by over 80% and help cows grow faster?

It isn’t genetic modification. It isn’t a chemical. It’s a seaweed named Asparagopsis that grows naturally in the temperate coastal waters of Australia.

When added to cattle feed, this bacteria-busting seaweed can help the meat and dairy industry achieve the same 2 objectives that Tomago Aluminium is pursuing.

First, price. With only 100 grams of Asparagopsis needed per cow per day, the cost impact will be negligible.

Second, customer demand. Who wouldn’t purchase zero-emissions beef that is the same price and quality as the original?

I can attest to that.

Two weeks ago, my wife and I had our first Asparagopsis fed porterhouse steak, from a company named FutureFeed. It was superb, as good as the original.

Again, give customers a cost equivalent, low emissions choice and they will take it.

Sharing in the benefits

By ensuring that we all benefit from the transition, we can take the hostility out of the climate debate.

The farmer selling meat, and my wife and I having a barbecue.

The smelter producing aluminium, and the high-tech company greening its aluminium phone case.

The miner digging iron ore, and the car company stamping steel panels.

Everybody can be a winner. We can all share in a golden moment for a greener planet.

May the Force be with you.

Thank you.

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