Energy leaders fade

Sept. 16, 2013
Early leaders are fading fast in the global competition to reengineer energy use. Australian energy consumers this month routed a government that was raising their electricity bills with a carbon tax.

Early leaders are fading fast in the global competition to reengineer energy use. Australian energy consumers this month routed a government that was raising their electricity bills with a carbon tax. And European officials are renouncing the holy quest for carbon freedom to which they once subordinated the prosperity of Europeans.

These costly experiences make upstart claims to leadership in this area appear less than sensible.

Economics and politics

Australians sent the Labor government packing little more than a year after then-Prime Minister Julia Gillard imposed a carbon-pricing scheme she earlier had spurned. She did so to gain support from the Green party in an intraparty rivalry with Kevin Rudd, who had brought Labor to power in 2007. Rudd reclaimed his party's leadership from Gillard earlier this year.

But the damage was done. Power generators and large industrial emitters of greenhouse gases were being forced to buy emission permits in a program aimed at trimming Australian emissions by 5% from 2000 levels by 2020. Effects were becoming evident in electricity bills.

"More than anything, this election is a referendum on the carbon tax," declared the challenger, Tony Abbott, in a speech at the National Press Club Sept. 2. An outspoken conservative and former Roman Catholic seminarian, Abbott once noted out loud the "sex appeal" of a woman politician and has been compared disparagingly with former US President George W. Bush. At the time of his Press Club speech, pundits considered the Liberal-National Coalition leader unelectable. Five days later, he trounced Rudd.

After the election, some of the pundits suggested Labor's obvious fractures determined the outcome. But Abbott, even before vote tallies were final and he officially became prime minister, already was at work on legislation ending the carbon tax.

Australia was playing catch-up, anyway. Europe is the proud—until recently—leader in the campaign against energy from carboniferous material. European economies are just now struggling out of recession. And officials are noticing the connection.

"We face a systemic industrial massacre," declared European Commissioner for Industry and Entrepreneurship Antonio Tajani in a report Sept. 8 by the Daily Telegraph of London. He largely blamed a rush to replace fossil energy with renewable energy. Hefty subsidies for solar and wind power have raised electricity prices and hurt European competitiveness.

"I am in favor of a green agenda, but we can't be religious about this," Tajani told the Daily Telegraph. "We need a new energy policy. We have to stop pretending because we can't sacrifice Europe's industry for climate goals that are not realistic and are not being enforced worldwide."

A few years ago, comments like those would have been anathema in the upper strata of European politics. As the Australian election shows, however, when politics and economics collide, politics eventually yields. For months, European governments have been cutting the "feed-in tariffs" and other measures undertaken to lead the world toward energy righteousness.

Message for Washington

So why does this message make so few inroads in Washington, DC? The US has gained huge industrial advantages from natural gas prices held low by surging supplies from low-permeability reservoirs. Oil supply is surging, too, from tight reservoirs and the oil sands of Canada. Yet the White House delays approval of a crucial pipeline, develops unnecessary regulations sure to slow the activity, and wants to duplicate the mistakes from which Australia and Europe are now turning away.

"I'm here to enlist your generation's help in keeping the United States of America a leader—a global leader—in the fight against climate change," President Barack Obama told Georgetown University students in a June 25 speech no one should forget. To cut what he called "carbon pollution," the president called for less use of fossil fuel and more use of renewable energy.

Australia and Europe show what happens when appeals to leadership press this formula into policy. Obama shouldn't expect American politics to respond any differently to officially imposed pain.