According to the Queensland Resources Council (QRC), coal exports have reached a record high for the year, and are predicted to keep growing.
The below article from the ABC highlights the boon in coal sales to over 30 countries, driving an increase in jobs and billions in investment.
To appear balanced, the ABC sought comment from Greens Senator Larissa Waters, who called the latest report by the QRC “desperate PR overdrive”.
Waters claims there aren’t any new jobs and that coal companies are laying off workers.
Acting Premier and Minister for Trade Cameron Dick confirmed all mineral exports in Queensland were smashing records, hitting $80 billion.
What’s curious is this statement by Waters, which went unquestioned by the ABC:
“Rather than be stuck in the past and continue to subsidise these often-overseas, multinational fossil-fuel companies, rather than investing in clean, home-grown renewable energy that creates jobs for people in the regions,”
This comment, typical of extreme green views, is wrong in at least three ways:
- Subsidies – renewables are propped up by consumers to the tune of around $3 billion a year.
- There’s no meaningful level of ‘home-grown’ renewable manufacturing; solar panels are mostly made in China and Wind turbines are mostly made in Europe.
- Job ‘creation’ – the Greens don’t understand that lower productivity jobs ‘created’ through subsidies and higher cost electricity generation are a net cost to society.
Let’s take a quick dive into each point, starting with subsidies.
That can be summed up in one chart.
Next, overseas multinationals dominate the manufacture of solar panels.
As for wind turbines, we don’t make them here. That market is dominated by multinationals too.
The installation of all this equipment we buy from overseas is done by Australians. We do make some things here, like the wind turbine towers.
But the problem here is these jobs represent a ‘double hit’ to the economy.
- They are lower productivity, which is wasteful
- They rely on subsidies from consumers, which is economically regressive
Lower productivity: consider that the aim of any form of electricity generation is to ‘produce’ a unit of electricity. Given the choice of needing one person or two people to produce that same unit of electricity, we all know that it’s cheaper to use one. This keeps costs down.
The ABS tells us that we had 14,820 people working in the renewable energy sector in Australia in 2016-17, which produced around 40,200 GWh of electricity.
In contrast, there were 46,180 people working in the non-renewable energy sector during the same period, producing over 222,000 GWh.
That’s a 73% gap in productivity. That is wasteful.
And as the French economist, Frederic Bastiat eloquently noted:
To break, to spoil, to waste, is not to encourage national labour; or, more briefly, “destruction is not profit.”
Subsidies: If you want to really appreciate the economic mechanics underlying this concept, have a read of this 1850 essay Bastiat.
For those who want to skip straight to the bottom line, the key takeaway in the context of Senator Waters comments is that subsidised jobs are a net economic cost to society.
We can tell, because the cost of electricity has increased well beyond CPI.
Those subsidies are paid for by electricity consumers, appearing directly on power bills in the form of ‘environmental policy costs’, and indirectly through increased wholesale prices, driven by the impact of wind and solar intermittency and those network costs, which include the additional impost of connecting disparate wind and solar farms to the grid.
Based on the facts, Waters appears to be one in ‘desperate’ PR overdrive, saying anything to salvage their false narrative that ‘coal is dead’, regardless of its accuracy.
Removing subsidies and protections for uncommercial renewables would be the real job saver and generator.
And we can still do our part.
Those consumers that want to purchase green energy can sign up to do so, at their true cost.
Meanwhile we could restore reliability and affordability to the energy market by allowing the market to deliver technology-agnostic solutions.
Brown coal is still the cheapest dispatchable baseload power source.
And with our Coldry technology,