IAN KIRKWOOD: Not easy to scrap coal

I’m not vain enough to argue with Gittins on economic policy, but he did acknowledge that the moratorium proposal came from the Australia Institute, a prominent opinion-maker in the anti-coal lobby.

One of its economists, Roderick Campbell, is an almost permanent fixture at Planning Assessment Commission hearings, deconstructing coal company presentations through his institute’s refractory lens.

Gittins argues that a moratorium would reduce greenhouse gas emissions while helping to keep coal prices higher than they would have otherwise been.

I doubt both outcomes.

First, the idea of a dozen or more major coal-producing nations voluntarily agreeing to no more new mines –   the definition of a moratorium – is highly unlikely.

If these same countries cannot agree to put even hypothetical limits on greenhouse gas emissions, can you really picture them limiting all that economic activity?

Anyway, moratorium or not, production forgone from the big coal states, NSW and Queensland, would almost certainly be replaced with coal from other countries.

Similarly, because coal is a rather common commodity, a moratorium may not lift prices in the way its supporters predict.

Gittins endorses a moratorium as a way of avoiding investment in the ‘‘stranded assets’’ that the Australia Institute and others say will be left on the landscape if coal is replaced by renewables.

He points to the recent ‘‘disinvestment’’ campaign aimed at the banks, and to statements by people such as Ross Garnaut – who predicts ‘‘a significant decline in China’s demand for coal’’ – as signs of the ‘‘little black rock’’ being terminally on the nose.

In the same way that  mining companies were wrong when they said the resources boom would go on forever, it’s way too early to say that coal is in anything more than one of its periodic cyclical declines.

If Rio, or even Glencore for that matter, pulls up sticks in the Hunter, I have no doubt that other companies will step into the breach as operators.

The same day that the Gittins piece ran, the Australian Financial Review had a front-page article titled ‘‘Beat-up coal has bright future in south-east Asia’’. This article was based on new a report from the International Energy Agency, predicting south-east Asian demand for coal would triple in the coming 25years, meaning ample markets for Australian exports.

Commenting on the report from an Asia-Pacific Economic Co-operation  (APEC) meeting in the Philippines, Resources Minister Josh Frydenberg said: ‘‘There is a unanimous call for more investment in renewables but at the same time everyone understands the key role that fossil fuels are playing. Nobody is under any illusions at these international meetings that coal is going away.’’

At the same time, however, there is no doubt that renewable energy products will continue to fall in price and rise in power and efficiency. All forms of mining leave a troublesome environmental legacy, and that includes the rare-earth miners whose products go into such renewable mainstays as the permanent magnets in wind turbines.

But it strikes me as very hypocritical for first world critics to effectively deny the third world the cheap energy it needs to lift living standards, given the advantages that coal, oil and gas have given us since the industrial revolution.

Gittins finished his column by questioning coal’s value as a job-creator, saying mine-building jobs are ‘‘temporary and often exaggerated’’ and that ‘‘once built, open-cut mines employ surprisingly few workers’’.

For the record, there are 37 mines in the Newcastle, Hunter and Gunnedah coal fields. Together, they employ about 15,000 mine-workers on average earnings of $150,000 a year.

 And yes, those numbers have fallen more than 10per cent in the past year, but they are still well up on the 13,200 or so employed just five years ago.