, 87 tweets, 10 min read
My Authors
Read all threads
OK, it's Monday so here’s a thread about climate change, the lack of political action in response to it, why climate change deniers are irrelevant, and why Australia taking action on climate change is vital for our economic survival.
It’s probably going to be a long thread so I’m going to give it a name. It’s called… THE GAME OF CHICKEN.
I’m not going to get into a discussion of whether anthropogenic global warming is a threat to us. Any reasonable assessment of the scientific consensus bears that out. Institutions that need to look to the future without bias already factor climate change into their calculations.
Reserve banks, investment banks, economic forecasters, insurance companies, emergency services. All factor climate change into their calculations, and none agree with the anonymous blokes online who want to argue about medieval warming periods.
Australians (and FWIW, Americans) want action on climate change. Polls bear this out again and again. Somewhere in the order of 80% of Australians and 70% of Americans want action on climate change. This includes majorities of all major political parties in both countries.
So why isn’t democracy delivering on this? Will of the people and all that. It's hard to imagine any other issue where such overwhelming public support has been met with such total political inaction.
It’s often said that money makes the world go round, but that’s not exactly true. Global politics is based on power and energy, not money.
The Wall Street whiz-kids might make billions pushing virtual money here and there, but it’s all underpinned not by gold by energy. Since the industrial revolution that has meant coal, and more recently oil and gas too.
We’ve got to jump back in time a little to get a fuller picture of what I mean here, so please bear with me.
WWII ostensibly began when Germany invaded Poland. That invasion is most often explained by Germany’s desire of ‘Lebensraum’.
That’s true, but most historical education glosses over the fact that for a decade previous Poland and Germany had been embroiled in… a trade war. Primarily involving coal exports. It was known as the German-Polish Customs War.
Poland at that time was the fifth largest coal producing nation on earth, and had recently concluded construction of a railway line for bringing its coal to the Baltic Sea.
In the Pacific, Japan’s entry into the war is often considered to be about imperialism. That is also true, but most ignore that from 1939 the US began a series of economic measures against a rising Japan to stifle its economic growth, and its military campaign in China.
The US froze Japanese assets and confiscated corporate profits. But the strongest of these measures was shutting off Japan’s oil. The US was Japan’s major supplier of oil and without oil, Japan couldn’t function. As Japan’s Foreign Minister at the time put to their US ambassador:
“[E]conomic relations between Japan and third countries, led by England and the United States are gradually becoming so horribly strained that we cannot endure it much longer. [O]ur Empire, to save its very life, must take measures to secure the raw materials of the South Seas.”
The attack on Pearl Harbour came just a few months later.
This isn’t intended to be a justification for aggression, but rather an illustration of the fact that the geopolitics and economics of war and commerce are always based on power and energy.
In medieval Europe the power of a state might have been measured in bushels of wheat. In ancient Japan, feudal houses were ranked by their wealth in koku of rice. In post-industrial times we talk in barrels of oil, or tonnes of coal and bcm of gas.
In the old days the machines of war ran on bread and rice. These days they require different fuel. So how do countries in the modern day ensure their energy needs?
The two major players in the world today are obviously the US and China.
Most of China’s imported coal and natural gas comes from Australia. Most of its oil comes from Russia and the Middle East. This is important, as China has now surpassed the US as the world’s largest importer of oil.
Where China gets its energy from is THE big issue for global security. China’s need for Middle Eastern oil has increased dramatically. This is important, as it raises the stakes of this volatile region even higher. Something we’re seeing happen right now.
China’s 3 largest oil partners in the region are Saudi Arabia, Iraq and… Iran. Of course, there’s little that the US can say about Saudi Arabia. MBS could dismember a journalist on Fifth Avenue and still not lose US support, such is Saudi Arabia’s strategic importance.
Iraq obviously has already been a target, but the strategic escalation of tensions with Iran is a calculated campaign for the US, and particularly Trump.
Trump gets a war footing for re-election, the US tackles an uncooperative state in the ME, and they weaken China both economically and militarily in the process. China is the #1 destination for Iranian oil.
For its part, the US imports oil from Mexico, Canada, Saudi Arabia, and increasingly Africa.
China has for years invested hugely in Africa in return for access to oil. They’re fearful of the amount of influence that the US holds over Middle Eastern oil and while Africa doesn’t have a huge amount of oil, China needs to diversify its oil access.
I bet now you’re thinking that we’re getting a long way away from climate change, and that just illustrates the size of the issue and why we’re not seeing climate action.
What we’re seeing instead is THE GAME OF CHICKEN.
An enormous geopolitical standoff where nobody wants to be the first to blink. The US and China are racing toward each other in a huge economic arms race fuelled by… well, fuel. Currently both economies (like most others) run on coal, oil and gas.
China’s strategy is to push its manufacturing-based economy faster and harder through export. It does so by controlling its labour markets and currency.
Manufacturing obviously requires huge amounts of power for operating factories, transporting goods etc.
The US on the other hand, has adopted a strategy of trying to slow China’s growth. It does this through everything from intellectual property pressures, agitating on currency, and most recently a trade war.
A big difference between the China/US approaches is that the US sees its access to fossil fuels as a huge strategic advantage. And it is. The US holds huge sway in the Middle East, and have better relations with their energy partners (Mexico, Canada etc.) than China does.
The replacement of NAFTA with USMCA was more about oil and energy security than it was about selling American dairy and corn.
China OTOH relies on nations like Australia, Turkmenistan, Russia, Saudi Arabia, Iran and Iraq for its energy. Africa is important strategically for the future, but at the moment its output is small.
The US is hoping it will outlast China’s boom, and it needs fossil fuels to do that. If the US moves away from fossil fuels, it gives up the strategic advantage of access to oil it’s spent nearly a century cultivating.
China still needs fossil fuels to push its manufacturing sector. It can’t afford to slow its economy by transitioning its energy right now.
But the strawman misdirection of “what’s the point of doing something on climate change when China isn’t doing anything” is ridiculous.
China might be the world’s largest carbon emitter, but the US is the second - and per capita it far exceeds China’s emissions. The big difference is China is doing something. The US isn’t.
China is THE world leader on investment into renewables. It’s responsible for somewhere between a third and half of all global investment in renewable energy technologies every year.
It absolutely suits China’s purpose to switch to renewables (when the time is right) because its energy independence would remove the US strategic advantage.
Of course as soon as that happens we have a whole raft of new issues to deal with. If the incumbent global power of the US can’t control China through tariffs or throttling energy access, how do they do it?
(Hint: It’s bombs.)
The greatest danger for us all (aside from the heat death of the world) is that the US plan isn’t really going all that well. The US hasn’t managed to slow China’s economy as much as it would like, and Trump blinked on trade before 2020, but that’s a story for another thread.
If the US loses THE GAME OF CHICKEN properly, that’s where the bombs come in. There have already been hundreds of events that could have triggered a US-China (read: World) War if the economic conditions were right.
North Korea missile tests. China’s treatment of Uighurs. The South China Sea. Trade war escalations. Most recently Suleimani’s assassination. Chickenhawk politicians see the deaths of millions that would come as acceptable collateral. The sociopathic ones don’t even care.
None of this is new info, but it’s important to spell it out because it’s the backdrop of why we aren’t seeing climate action. Yes, this has all just been background. Sorry.
The US won’t do anything on climate change. Ever. It thinks it has to keep playing the fossil fuel game because it was the one that set the rules.
It would be like convincing a 7-foot NBA player going up against a jockey where the stakes are life and death to agree to a horse race instead of a dunk comp.
China is actually trying to change the game with renewable investment, but won’t move away from fossil fuels while still under economic threat from the US.
Please note how none of this has to do with online heroes who want to argue about CO2 levels in the Cambrian period. Only the internet’s biggest idiots think that climate change is a hoax or that the scientific consensus is somehow unclear.
The (plainly obvious) reason we aren’t seeing climate action is that no country thinks it can rejig the energy dependence of its economy without falling behind its economic geopolitical competitors.
This is the global context we need to understand climate inaction. But here in Australia the issue is a little different.
We’re not as involved in THE GAME OF CHICKEN as we think. The US and China are staring each other down and we’re out here on the fringe trying to make as much money as we can before it comes to a head.
Our problem is that through election-cycle short-sightedness we aren’t planning for the future. And haven’t been doing so for a long time.
It starts with our broken domestic energy system.
The National Electricity Market began about 20 years ago and was supposed to regulate our patchwork system of privatised electricity generation, transmission and sales with the effect of driving down prices.
Without getting into too much detail, it has been a disaster. The NEM broke up our energy system, and also broke our energy system.
In Australia we have near perfect conditions for all forms energy production - traditional AND renewable - and we suck incredibly badly at it all.
We are the world’s biggest net exporter of both coal and gas and yet we have the some of the most expensive and least reliable electricity in the world.
Modern Australia has essentially a dumb, resources-based economy. We let people pull stuff out of the ground and sell it. That's our business. But it’s also a successful one for now. Coal, iron ore and LNG saved us from the worst of the GFC.
Our resources boom has been a gift for the Australian economy, but what we did with it was foolish in the extreme. Australia licences private companies to exploit our resources which has made a small number of mining companies and individuals fantastically wealthy. That's nice.
Of course, it made a lot of the rest of us wealthy as well. FIFO truck drivers on $300K, homeowners riding a massive property boom etc. It stuffed the public purse with royalty cash (although not as much as it could/should have).
There were downsides, however, and we don’t often talk about them. Rising costs and a high dollar hurt export-based sectors such as agriculture, manufacturing and services.
How are farmers doing these days? How many long-standing food, textile businesses have failed in the past decade? These aren’t victims of the resources boom directly, but the economic conditions the resources boom helped create hurt them immensely.
These depressed sectors only further isolated our economic reliance on resources, and particularly on fossil fuel exports. Resources underpin our prosperity today. But what about tomorrow?
The world is inevitably moving away from the very resources Australia relies on. And we’ve done nothing to protect ourselves. We are STILL doing nothing to protect ourselves.
The US and China might be playing a GAME OF CHICKEN with each other, but we’re playing it with a brick wall. We’re hurtling down a dead-end street and not even trying to stop or turn.
Successive governments went on spending sprees with the superprofits from the resources boom. Conservative governments spent them on tax cuts. Progressive governments on services. Which of these you think is good/bad depends on your politics, but it’s not really relevant.
The point is, what neither party chose to spend it on was future-proofing our energy sector or our economy.
We now have a dumb, resources-based economy, fewer options for growing other sectors, and less chance of restructuring it all. The market for our major economic driver is contracting.
Contrast this with Norway, who since its (oil-based) resources boom began in the 1960s has squirrelled away a war chest (the National Petroleum Fund) of nearly a trillion dollars in specific preparation for a post-oil world.
Imagine if instead of spending our resources money on electioneering, we’d worked towards re-nationalising our failed privatised electricity sector.
Imagine if we’d used re-nationalisation to ACTUALLY drive down power prices, and transition our generation toward more reliable, renewable or even nuclear power (don't @ me).
Imagine if we’d spent it addressing the reality that the effects of climate change will weaken the Australian economy much more than many other countries. As it stands, the cost of the coming decades of heatwave, drought and fire will ruin us.
Imagine if we invested the profits from resources boom into becoming a world leader in renewable energy, bolstering a service, manufacturing and technology-based economy that prepares us for the post-fossil fuel world that is inevitably coming.
At the moment we’re like a music store depending on CD sales when the writing is on the wall that streaming is the future. Nobody in politics has the stomach to do what’s needed.
We could have used the money we made from coal to prepare ourselves for a future without it. But we didn’t.
The “what Australia does is irrelevant because we are only 1% of global emissions” brigade miss the point entirely. Australia is in a UNIQUE AND PERFECT position to do something about climate change.
We are (relatively) energy secure. We are wealthy. We have vital trade ties with both the US and China. We already co-exist with two superpowers, disproving the Highlander “there can be only one” mentality that will lead us to war and ruin, both environmentally and economically.
We have perfect conditions for renewable energy generation. We have a comparatively small energy footprint, meaning that the investment required for achieving results is also comparatively small.
There is no better place in the world to prove that transitioning to renewable energy is possible, and profitable, while also securing our domestic energy market and modernising our economy. Wins all around.
The only thing lacking is economic sense, and political courage.
Something to think about while our country burns. [END]
I will now ignore my mentions for exactly one thousand Earth years.
Missing some Tweet in this thread? You can try to force a refresh.

Enjoying this thread?

Keep Current with Adam Liaw

Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

Twitter may remove this content at anytime, convert it as a PDF, save and print for later use!

Try unrolling a thread yourself!

how to unroll video

1) Follow Thread Reader App on Twitter so you can easily mention us!

2) Go to a Twitter thread (series of Tweets by the same owner) and mention us with a keyword "unroll" @threadreaderapp unroll

You can practice here first or read more on our help page!

Follow Us on Twitter!

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just three indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3.00/month or $30.00/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!