What's the deal with Australian climate politics?

In this episode, activist Miriam Lyons gives an overview of
Australian climate policy past, present, and future.


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transcript)


(Active
transcript)


Text transcript:


David Roberts


G’day mates! As you all know, I’m in Australia at the moment, on
a whirlwind speaking/listening tour regarding this country’s
response to the Inflation Reduction Act.


I’ve been learning a ton about Australia’s history with climate
policy, its clean-energy resources, and its current politics.
It’s all much more complex and interesting than I appreciated
before coming, so I thought it would be cool to record a podcast
“in the field,” while I’m here, with someone who could provide an
overview of all that stuff.


To my great delight, I was joined — live! in studio! — by Miriam
Lyons. Lyons’ resume is … daunting. She founded a progressive
think tank called the Centre for Policy Development and led it
for seven years; she led the climate justice campaign at GetUp,
the Australian equivalent of Moveon.org; she has written or
co-written two books on economics and the clean-energy
transition; and currently, she is director of the Australian
Economic Transformation program at the Sunrise Project, which
works to scale social movements and accelerate the transition.


Needless to say, she is quite familiar with the ins and outs of
Australian climate politics! We had a fascinating and
wide-ranging discussion. Enjoy.


So, Miriam Lyons. Welcome to Volts. Thanks so much for coming.


Miriam Lyons


Thank you so much. Very excited to be on the pod.


David Roberts


This is excellent. Oh, also, Volts listeners might be excited to
know that this is the first Volts that I've ever recorded in
person in the same room with my guests. That's exciting too. I
know usually I'm a hermit at home, so this is cool. I would like
to do more of it. Okay, so let's start then with a little bit of
capsule history. I think the Volts audience is aware of the agita
of climate politics in the US. From sort of Waxman-Markey era of
2009, 2010, all the way through the turbulence, et cetera,
through IRA.


So let's talk a bit, a little bit about what's been happening in
Australia during that same time period. Give us a sort of summary
of the history.


Miriam Lyons


I've been thinking about how to sum up all of Australian climate
politics really briefly. Okay, so in a galaxy far, far away. A
colonized country was sitting on one of the world's biggest
carbon bombs, and what happened next is an epic tale of triumph
and betrayal. I think the TL;DR version is that we are one of the
world's biggest exporters of climate pollution. We are also the
sunniest continent on Earth and one of the windiest. So we have
this enormous potential to be a massive exporter of climate
solutions. And we're currently hitting our crossroads, which is
that moment where we decide whether we want to be a Kodak country
that is so attached to its old technology that it's failing to
notice —


David Roberts


Oh, that Kodak. For the minute. I had the bear in my head. I was
like, wait, what's the bear analogy? Oh, and the photograph
analogy.


Miriam Lyons


Yeah, that one. It's just like, oh, there's all this sun and
wind. What could we possibly do instead of killing the world with
our coal and gas exports? So that informs a whole lot of the
history of our climate politics, of course. And our fossil fuel
lobby have been experts in using their enormous profits to win
friends and influence policy and more importantly, to bully
politicians when they don't get their way. And that playbook has
worked really well for them for quite a long time, but it is now
running out of oomph. And I think, you know, a big question now
is whether our major parties will notice that the gun that the
industry is holding to their heads doesn't have quite so many
bullets in it anymore, but to kind of go back in time:


John Howard was our second longest-serving Prime Minister and a
climate denier. He was unseated by Kevin Rudd in 2007 for two
main reasons. So one was a massive backlash against his attacks
on workers' rights, but the other reason was his failure to act
on climate change. I saw the polls at the time. Those were the
consistent two main reasons that voters switched from him to
Kevin Rudd. So Kevin Rudd came in, he signed the Kyoto Protocol
and he introduced a very modest emissions trading bill. So it was
going to cut emissions by about 5% and any stronger emissions
cuts were going to be conditional on what other countries did.


David Roberts


Let's discuss the political parties here. I forgot, we have
different political parties at play. So the Conservative Party
here is called the Liberal Party.


Miriam Lyons


Yes. So this is down under everything's topsy turvy. The Liberals
are the conservatives.


David Roberts


Exactly, southern hemisphere thing. And the liberal party or the
center-left party is the Labor Party.


Miriam Lyons


The Labor Party.


David Roberts


So Rudd was of the Labor Party.


Miriam Lyons


Rudd was of the Labor Party and the Labor Party was born from the
workers' rights movement. And the Greens Party is also very
relevant, which was born from the environmental movement.


David Roberts


So Rudd comes in, does some mild emissions cutting.


Miriam Lyons


Yeah, he plans for a very modest emissions trading scheme. And
that bill did not pass the senate for reasons that you should not
ask Australian climate campaigners about, unless you want us to
break our own personal version of Godwin's law. Then the
Copenhagen COP flopped, which took a bit of paint off Rudd
because he had really been pinning his kind of domestic story to
the idea that we would be acting in a pack. Then Malcolm
Turnbull, the moderate leader of the conservative Liberal Party,
who Kevin Rudd had been negotiating with, was overturned by his
own party in favor of Tony Abbott because he was considering
actually negotiating on a climate bill.


And so Tony Abbott was a Trump style climate denier. So suddenly
Rudd had lost his prospect of having somebody reasonable on the
opposition to negotiate the bill with. He then decided to shelve
that bill, which turned out to be a very unpopular decision
because immediately afterwards, his polling started to plummet,
which resulted in his own party losing faith in him and
overturning him in favor of Prime Minister Julia Gillard.


David Roberts


All these names are ringing very, very faint bells.


Miriam Lyons


And there's more. So she then narrowly won an election and was
only able to form government with the help of a couple of
progressive rural independents who were very clear on what
climate change was going to do in terms of damage to the farmers
in their electorates. And so they demanded strong climate action
as part of their deal to allow the Labor Party to form
government. Which meant that between them, they put together
another climate package, which included an emissions trading
scheme again, but also the Australian Renewable Energy Agency,
which then had a big budget to invest in a whole bunch of really
important grants to bring the cost of renewables down in
Australia.


And the Clean Energy Finance Corporation, which was essentially
like an investment, publicly owned investment bank that could
invest in the clean energy sector, but with a slightly lower rate
of return, so enabling that kind of investment to get up. Green
bank. Exactly. But there's also more. So while all of this was
going on, the Rudd and Gillard governments were also trying to
make the mining industry pay a little bit more tax for the
massive, massive profits that they were making on the back of a
massive mining boom, very little of which was staying around in
the country.


Our mining sector is by far the majority multinational owned, so
most of those profits go offshore. And of course, the mining
industry was not a fan of paying more tax and neither was Tony
Abbott. So both of them ran a massive culture war campaign
against Julia Gillard, which spooked her party, who then turned
around and dumped her in favour of Kevin Rudd. Again, same guy
back in.


David Roberts


Wait a minute —


Miriam Lyons


So it's pretty safe to say that backstabbing is not voters'
favourite quality in a candidate. So they then handed the
election to Tony Abbott a couple of months later, who then
dismantled the carbon price, but interestingly, was unable to
dismantle the Renewable Energy Agency and the Clean Energy
Finance Corporation.


David Roberts


Some political lessons. And so Rudd comes back in and loses to
Abbott.


Miriam Lyons


Well, no, Rudd got dumped in favor of Gillard, who then won, who
then got dumped in favor of Rudd, who then lost to Abbott in
2013.


David Roberts


And then so Abbott begins a long reign of doing nothing.


Miriam Lyons


Yeah, Abbott repeals the mining tax, repeals the carbon pricing
part of that big clean energy package, tries to get rid of the
renewable energy target, which we should also talk about, but
fails to completely eliminate it. It gets a small, I think,
roughly 20% cut to the renewable energy target, which is a really
big success story, actually, of Australian climate and energy
policy. Tries to overturn the Clean Energy Finance Corporation,
tries to overturn ARENA, isn't able to because they've got too
many fans in the Senate, basically too many fans in the public
and the Senate.


David Roberts


Right.


Miriam Lyons


But then yes does absolutely nothing.


David Roberts


And then Abbott's in charge until just recently, yes?


Miriam Lyons


Abbott, then embarked on an incredibly ideological public service
cutting push, which was not popular. So then his polling started
going down. So he was then dumped by his party in favor of
Malcolm Turnbull. So he was then back again. Then Malcolm
Turnbull starts glancing sideways at the idea of something that
kind of, if you squint at it, might look like carbon pricing
within the energy sector. And in order to do that, he had to
negotiate with the states. The states were putting some quite
reasonable requests on how to make sure that it actually worked.


As soon as the right wing of his own party started to get the
idea that the scheme might do something, they dumped Malcolm
Turnbull. But in this case, what happened was that Peter Dutton
had put in the bid for the leadership spell, so he'd instigated
the backstabbing. Yet he didn't actually win that spell. Scott
Morrison did.


David Roberts


Scott Morrison? Another name that rings a faint bell.


Miriam Lyons


Yeah, yeah.


David Roberts


Good grief. *Sirens wailing in background*


Miriam Lyons


Somebody's telling the truth about climate politics, send in the
cops. So Scott Morrison then ends up the leader of the party
going into the next election. And people don't blame him for
having stabbed Turnbull in the back because it kind of looked
like he was the person who got him by default. So then he was
able to be elected, then he did a whole lot of damage. And Scott
Morrison was quite famous for having held a lump of coal in
parliament, doing that as a bit of a stunt or waving it around.
What then happened was actually a bunch of climate disasters, so
particularly some horrific bushfires, just unprecedented in how
much damage they know.


Property lost, enormous swathes of bush that had never burned
before, burning for the first time, and lives lost. And everybody
was very annoyed about this. And Morrison was out to lunch and
specifically out of the country. And then when confronted on why
he was neither taking the climate change that had caused the
intensity of these bushfires seriously, nor really being very
present to try and look after the people who were surviving this
disaster, he famously said, "Well, I don't hold a hose, mate."


David Roberts


There's some real political skill right there.


Miriam Lyons


Yeah. So people didn't like that so much. And that was like,
really emblematic of people's sense that he was just failing on a
whole bunch of national issues that were hurting people's lives,
where he just wasn't providing leadership, so he then lost. And
now the prime minister is Anthony Albanese.


David Roberts


So this is an incredible amount of drama and back and forth, two
emission trading schemes, both of which more or less got
defanged. So let's take stock then, after all of that. You know,
right now, Labor is contemplating what to do on climate change.
May or may not do something big. We'll discuss that in a minute.
But taking stock, sort of, what is there now of climate and
energy policy in Australia? What do you have going for you
currently?


Miriam Lyons


So now we have a Climate Change Act, which basically means that
the government's emissions reduction target, a 43% cut in
emissions by 2030, has been legislated. But the legislation
basically says this is our target and every year we have to turn
up to parliament and tell you what we're doing to meet our
target. The legislation does not make them meet the target, it
just makes them have an annual moment of accountability where
they have to say whether or not the dog ate their homework.


David Roberts


Right. This is something anyone who has followed me for a while
knows I yell about a lot, the illusion that targets are policy,
but they're not actually policy.


Miriam Lyons


They have an enormous amount of soft power, right, which you
shouldn't discount completely. Like it's good to have
accountability on whether or not the dog's eating your homework,
but doesn't actually make you do the homework. Not the same as
homework.


David Roberts


And there's a 2050 target as well, right?


Miriam Lyons


Yeah. Net zero by 2050 is now bipartisan. So that was one thing
that did happen under Morrison, was that they formally adopted a
net zero by 2050 target, but again, with absolutely no homework.
They had a pamphlet that they said was their roadmap on how they
were going to meet the target. Then other pieces of policy that
we have there was something called the Safeguard Mechanism, which
was introduced under the Abbott government, if I'm not mistaken.
So it was a very Abbott style way of saying that you were doing
something on climate without really doing anything on climate.


The way that mechanism worked was to say that the covered
facilities, so it was 200 largest facilities in the country, had
to reduce their emissions below a baseline, but they set the
baseline so much higher than their actual emissions that it never
made them reduce their emissions. And so what Labor took to the
last election was a promise to turn it into a scheme that did
something — terribly designed scheme. It's not like even a third
best policy design, right? This is like the 6th to 7th best
policy design, but it was a piece of policy that already existed.


So, they were hoping that by saying, "Oh, we're just going to
have the same policy but make it work," they would diffuse
attacks on them having a climate policy going into the election.
Naturally, that did not diffuse any attacks anyway. Yeah. So the
Liberals were very happy to attack their own policy in the
context of the election campaign. Also, something we should learn
lessons from, probably.


David Roberts


Yes.


Miriam Lyons


No negotiating with terrorists. Appeasement does not work. Yeah.
So we have a safeguard mechanism now which has been strengthened
with a whole lot of campaigning from the climate movement, a
whole lot of negotiation from the Greens and also from an
independent senator and independents in the lower house, all
working to try and improve the scheme. So it actually does
something, looks like it's going to actually do some things,
still a few holes, some devil in some detail. A whole lot of work
is going to have to go into actually making sure that it does the
things that it has the potential to do.


David Roberts


Right. And yeah, maybe it's worth pausing to say this is
something I think all Australians know, but it's worth pointing
out that these defeats of Labor throughout the 2000s and the
2010s on the back of their attempts to do emissions trading
schemes, their attempts to do climate policy have left them
somewhat gun shy and paranoid about backlash. I think that's kind
of the sense I get. The context that this is all taking place: On
the one hand, this sense that we have to do something. On the
other hand, this sense that we've been burned before and here we
are, finally we have the government, let's not screw it up, let's
not go too far, let's not risk another backlash.


Miriam Lyons


All of those things now.


David Roberts


A lot of push and pull both different ways.


Miriam Lyons


But what's changed, obviously, since that time is renewables are
so much cheaper than they were when the last round of the climate
wars was happening. The popular understanding of that has
shifted. I've sat in focus groups all over the country, including
in some of our most carbon-intensive locations and it's actually
some of the places where there are the most workers in fossil
fuel industries where people are paying the most attention to the
fact that the writing is on the wall. And I can show poll after
poll that shows that people are quite happy to embrace the
transition to clean energy as long as they know that government
has a plan to look after workers and community along the way.
Because we actually expect governments to do their jobs in this
country.


David Roberts


Weird. Yeah. This is actually something I meant to ask about
earlier, but this might be a good time to flesh it out, which is
the extent to which Australia is dependent on fossil fuel
exports. I think people know that Australia exports a lot of coal
and now gas. But the extent to which the economy rests on that,
maybe, I think, was a little mind-blowing for me. So you talk
about that for a second.


Miriam Lyons


Yeah. On the one hand, we are a massive problem. We have a big
problem domestically. We have a big problem externally that we
are exporting to the world. So we have the highest emissions per
person than any other rich country other than Canada. Our
domestic and export economies combined add up to about 11% of the
emissions of the entire Asia Pacific region. We are the second
biggest exporter of thermal coal in the world, biggest exporter
of met coal. We have more proposed export coal mining than
anywhere else on Earth. We are equal largest exporter of gas,
along with the US and Qatar.


We have unexploited gas basins whose size is similar to the giant
Marcellus Shale gas basin your readers, your listeners are
probably familiar with. So what is quite interesting is that
despite all of that damage, the entire fossil fuel industry still
only employs 1% of Australians. But it is a significant provider
of well-paid jobs in some very politically influential regions,
often regions that have high unemployment otherwise. So that
makes it very easy for the fossil fuel industry to use those
workers as human shields to hold back progress.


David Roberts


A familiar dynamic.


Miriam Lyons


Yeah. And it's less a significant source of government revenue
than you would assume because of aforementioned mining industry
success in fighting off attempts to actually make it pay its way.


David Roberts


Right.


Miriam Lyons


But where it does really show up is in our export profile. So we
have a small domestic market, big export-oriented kind of economy
and our top exports in order are iron ore, coal and gas.


David Roberts


Oh, my goodness.


Miriam Lyons


Right. So I think the only major export that we have that's very
more knowledge sector, knowledge-intensive sector is education.
But also we treated international students quite badly under
COVID and so that's a highly competitive sector. So we're not
doing a great job of actually preserving that bit of diversity in
our export economy. And so we have essentially Dutch disease. So
our dollar is intensely tied to the price of our commodity
exports. And what that means is that every time there's a boom,
the dollar goes up and that makes all of our other exports less
competitive.


So some of them shut down. So it hollows out the rest of our
export economy, which then makes our dollar even more closely
tied to commodity prices and so on. And that can also show up in
the influence of other sectors politically. So these sectors, all
of the mining sectors really are enormously profitable and they
are able to use those profits to influence how politics goes,
including with very expensive ad campaigns.


David Roberts


Right. Yeah. Talk about this. Is it Harvard that does it, this
measure of economic complexity? This was really interesting to me
to find out.


Miriam Lyons


Yeah. We are the world's 13th largest economy, but we rank 74th
in economic complexity. So yeah, we really have the resource
curse in all of the ways, whether it's what it does to the rest
of the economy, but also when it comes to the influence it has on
our politics.


David Roberts


What it does to politics, what it does to the dollar. I think
Australia is unique in that way in being a sort of modern,
developed, wealthy economy, resting almost entirely on this
pillar of dirty exports.


Miriam Lyons


Yeah, certainly when it comes to our export economy. But it is
important to kind of temper that with the recognition that when
it comes to domestic employment, it doesn't loom as large as
people would assume, given its big footprint in our exports.


David Roberts


Yes, the same in the like. People are always saying the coal
industry doesn't — employs fewer people than, you know, Hardee's
or Arby's or whatever, forget what the cliche is, but it's not
actually that big of an employer. But it looms so large in
politics.


Miriam Lyons


We kind of had Dutch disease of the mind.


David Roberts


Yes. So you mentioned some policies that are in place. One thing
that I have found somewhat peculiar when I started reading about
Australian climate politics and talking to people and hearing
these sort of rundowns and such is kind of over on the side,
weirdly, rarely mentioned, is this wild success Australia has had
in rooftop solar power, which is like kind of this anomalous
thing that doesn't really fit in with the rest of the story. And
it seems like Australia would be out there waving this flag and
bragging about it, but I hear weirdly little about it.


So tell us, how is it that Australia ended up with basically the
cheapest rooftop solar power in the world? Basically, as far as I
know, the cheapest the people who have rooftop solar in Australia
now, the soft costs are so low that they basically have the
cheapest residential power of anyone in the world.


Miriam Lyons


In world history.


David Roberts


In world history. And yet, you hear weirdly little about it. So,
what is the kind of valence of this? How did this happen and why
aren't people bragging on it more?


Miriam Lyons


Yeah, good question. Back to a little bit of potted policy
history. One of the very, very few things that John Howard,
winding back in time, did that was good on climate was
introducing the mandatory renewable energy target. Very, very
modest at the time, just 2%, but it created a piece of
infrastructure that could then be turned up, that was then
increased under the Rudd government. So that was actually a real
success of that first Rudd government, increasing that target to
20%. Very little fanfare, very little debate at the time. Then
Tony Abbott wanted to turn it down because it was doing such a
good job of getting more renewables into the system and cutting
energy emissions.


But it was beloved, so he was able to cut it by about a fifth in
2015, but it stuck around, and it stuck around until 2020, when
it was completely met. But that target was split into two parts.
So one was the large-scale renewable energy target, which has now
been met, but the other part was the small-scale renewable energy
scheme, which creates an incentive for rooftop solar, basically,
and that is still in place and is actually still creating an
incentive for people to adopt rooftop solar. I think it equates
to about a $2,500 rebate off the top of installing rooftop solar
in Australia still.


And because that scheme was so long-lived, it really helped the
industry scale up and learn and bring down those soft costs over
time. So the industry got kickstarted by state-based feed-in
tariffs that were very generous, usually the case. Right. You
need those really generous feed-in tariffs.


David Roberts


Very generous at first, from what I heard.


Miriam Lyons


Yeah, absolutely. But that is the thing that gets you the
deployment, that allows the learning rates to kick in. It brings
down the costs. So they do end up paying for themselves several
times over, but then having something stable like that national
Small-Scale Renewable Energy scheme pick up and then just stay
the course year after year allowed for the industry to scale up,
build their supply chains. Also, I think one of the things that
did was it was so popular that almost before the distribution
companies and the big utilities, the big private utilities,
almost before they had noticed, it had been taken up wildly, was
wildly popular.


And there was a whole cohort of people who were willing to defend
their solar to the death. And so any attempt to slow down that
uptake got fought with a kind of particular credit to the Smart
Energy Council who set up to represent the small-scale sector.
And so anytime a distribution company would say, oh, we want to
limit solar exports, or anytime somebody tried to cut the
small-scale renewable energy scheme, solar citizens who
represented people who had solar on their roofs would fight that
off and successfully. So, yeah, it created this constituency of
people who were directly benefiting from solar on their roofs,
who were then able to defend a great piece of policy.


David Roberts


That's, again, a very familiar story in the US and in Germany, I
think, both in that it kind of got born because nobody much
noticed, because nobody much thought it would do anything. And
then by the time the sort of powers that be realized what was
happening, it's too late. You have all these constituents, which
is another interesting political lesson here about distributed
energy, I think. It's not just its energy generating power, but
its constituency generating power.


Miriam Lyons


Yeah. And it's the combination of the kind of climate history
that we talked about and examples like this that make me
increasingly attracted to ambition loop theories of policy change
on climate. How do we actually create climate policy that stays?
We make it popular by ensuring that it's delivering real benefits
to real people in real places, whether that is good clean jobs in
some of those carbon-intensive regions, or whether it's savings
to households. And the job's not done, right. Even when it comes
to rooftop solar. Yes, we are wildly successful, fastest uptake
in the world.


Rooftop solar makes up half of our renewable capacity by
gigawatts now — three gigawatts a year every year. Quite reliably
and less volatile than the large-scale wind and solar
construction industry.


David Roberts


Let's say one out of every three households. That is so wild.


Miriam Lyons


One in three. Yeah. And at half the cost of the US. So, yeah,
wildly successful. And a lot of that is just because of that
success in bringing down the soft costs. Right. But despite all
of that success, we're currently at maybe 20 gigawatts, give or
take, of rooftop solar capacity. If you look at our rooftop real
estate, we have the potential for up to ten times that and we
should be using it all because that is just about the lowest land
use clean energy that you can get. It makes so much sense.
Obviously, you get to avoid a bunch of transmission and
distribution costs and it's really fast and the workforce is
already there and it enables everybody to get a slice of the
benefits of the clean energy sector on their roofs.


So of course we should be using all of that. It's not enough to
get the whole job done, but if you look at very ballpark
calculations of what it would take to completely repower
Australia's domestic economy, that adds up to about half of the
capacity that we would need. It's a big part of it.


David Roberts


What is the statistic Saul Griffith is always fond of citing: He
says even if you could build this magic low-cost nuclear
whatever, just the cost of transmitting power from a power plant
to a house is greater than the cost of rooftop solar. So even if
you can make free power, it would be more expensive to get it
there than people are getting from rooftop solar.


Miriam Lyons


And of course we need the large-scale renewables as well. Right.
We need wind so it generates at night. We do the transmission we
need the negative correlation between the different parts of the
country.


David Roberts


What about the Duck curve, because I'm imagining if everybody's
got solar everybody's generating at the same time and you have,
you know, already in California, for instance, where there's a
lot of rooftop solar. You get, you know, flood during the day
more than people need and then it drops off at night and you have
this ramp up of other sources. Is that starting to pose a problem
to the Australian grid?


Miriam Lyons


Yeah, I mean it's been a thing that we've been dealing with for a
long time and every time people say that we couldn't possibly
handle any more, then it gets proven wrong and a whole lot more
gets installed and it's actually fine. One of the bleeding edge
places where that's happening is in South Australia where they're
actually quite often seeing getting close to zero demand at
points in the day because of rooftop solar. And yeah, they're
starting to come up with really creative ways of dealing with
that. One of the ones that I am very excited about is that they
have a virtual power plant scheme which has solar and batteries
in a whole bunch of social housing properties.


So, this is publicly owned social housing for low-income people,
and by being part of that virtual power plant, the residents of
those houses get a big discount on their bills. But the grid
operator gets a source of dispatchable power that they can deal
with en masse instead of piece by piece. So that's pretty
amazing. There's been a really interesting history about the
relationship with the distribution companies and rooftop solar
where they fought it tooth and nail, and it's starting to look
like maybe there'll be some kind of enemies-to-lovers rom-com
plot twist at the end where they'll actually decide that it's
great and embrace it.


In South Australia, they've done a new thing where they're
embracing flexible exports where basically they get a little bit
more control over the export to be able to turn the solar down
basically when they need it for local grid stability. But in
return, the houses get to up the amount that they can export to
the grid. So that earns the houses more from their rooftop solar
exports. But yeah, the distribution company gets what they want
too. But overall, even though it's like a pretty dreamy story
here compared to other places, we still have further to go.


So the distribution companies really need to be made to shoulder
the burden of proof of how much solar can you have. Because at
the moment the default is that they just get to say no, we can't
have any more and they don't have to show their data about why
that might be the case. And we keep on finding out that they're
being too conservative. So if we could shift that so that they
had to prove that they couldn't handle anymore and release their
workings, that would really shift things. Particularly, I think,
for the somewhat larger installations.


So at the moment there are some limits on the bigger commercial
rooftop solar installations. So you could unlock a whole bunch
more of those by shifting that burden of proof.


David Roberts


This brings up two questions actually. One is, which I forgot to
ask earlier. What is the sort of balance of the Australian grid
currently? How much fossil is it versus renewable? Where are you
at?


Miriam Lyons


We're at 35% renewable now.


David Roberts


35%. And it's mostly coal that's the fossil domestically. Right?
But coal is declining, that's my —


Miriam Lyons


Certainly is. And there was a massive acceleration in the coal
closure dates being brought forward. So we saw a couple of really
big announcements. One was our biggest domestic polluter, AGL had
a massive corporate campaign against them run very effectively by
Greenpeace and a few other groups along with some really great
strategic impact investment. So activist shareholders also being
in the same mix so in response to all of that, AGL massively
accelerated their coal closure timelines with a commitment to
look after workers along the way and investing in clean energy.


David Roberts


Political pressure, not —


Miriam Lyons


Campaign pressure.


David Roberts


— not some sort of physical —


Miriam Lyons


Response to campaigning, but also response to the way that once
you've got a certain amount of renewables in the system, the
economics of coal shifts. Of course, because that solar dip in
the day, that Duck curve really eats the lunch of coal company's
profits.


David Roberts


You need flexible sources. And the other thing is, anytime I have
to do this, I'm required by law to do this because otherwise
someone will send me an angry email. I have to ask about nuclear.
Since we're talking about dispatchable capacity, what is the sort
of Australian disposition towards nuclear? There's none here,
there's none on the grid.


Miriam Lyons


Yeah, there's no nuclear power here. And by the time that it
would be plausible for a new nuclear power industry to get off
the ground, 1.5 would have been and gone. So it's completely
irrelevant on the timeline of 1.5 degrees in Australia.


David Roberts


Right. So it's not a big political — it doesn't come up a lot.


Miriam Lyons


So the Liberal opposition is mad keen on nuclear —


David Roberts


Oh, of course.


Miriam Lyons


And really, in the context of Australia, when you look at the
economics, when you look at how cheap our renewables are, when
you look at the way that the cost of batteries are coming down
dramatically over time, like it is very, very clear that on any
reasonable timeframe, there is no way that nuclear will stack up
economically. And there is also no way that it can contribute to
reducing our emissions on a timeline and that is relevant for a
1.5 degree world or the attempt to overshoot and get back to it.


So this is really a delay tactic. Right. Embracing unfeasible
technologies is like one of the last resort plays in the playbook
of the climate denier.


David Roberts


Yes, familiar. Speaking of this, also, I keep hearing about this
sort of semi-crisis of rising power prices, rising residential
power prices, and it has something to do with the fact that you
stopped using all your gas domestically and started exporting it.
Is that right? When was that?


Miriam Lyons


It was over quite a few years that it happened, and governments
at various levels were warned that when we had a massive LNG
export industry and effectively hooked the domestic price of gas
to the international price of gas, the price of gas would go up.
In Western Australia, they had a domestic gas reservation policy,
which meant that didn't happen. But on the East Coast yeah, there
was nothing to basically stop gas companies from just getting as
much as they could, which often meant actually signing long-term
contracts to the international market and undersupplying the
domestic market. And of course, when Putin invaded Ukraine, those
global prices went through the roof.


And look at the kind of windfall profits that Australian gas
companies were making in that context and it was in the tens of
billions to — yeah, I think I saw 80 something billion of
windfall profits, essentially war profiteering by coal and gas
companies. And in response to that so that was one of the things
that massively pushed up energy prices last year. Another factor
was that our coal fleet is extremely old and unreliable and so it
breaks down from time to time, unpredictably. And so, yeah, we
had seen a couple of units go out at one coal plant and that
pushed the price up.


So this is the situation we're in in Australia as well, is that
we actually have to replace the coal plant. It's not like we can
just keep it online forever. It needs to be replaced by something
because it is old and some of the boilers are sort of held
together with sticky tape.


David Roberts


Is this a political threat to Labor currently, like these rising
prices? Do they view it as like do people blame Labor for well —


Miriam Lyons


What they did last year was introduce a price cap, which was a
very popular move. The thing that I think was a bit of a missed
opportunity there was that there was also massive popular support
for introducing a windfall tax on those war profits at the time.
And if they'd done that and put that money straight into
household clean energy access so rooftop solar for the people who
are currently locked out of it, like renters. Energy efficiency
for the people who are currently living in Australian buildings
that are built like leaky tents on average.


David Roberts


I hear, unusually notoriously leaky.


Miriam Lyons


So bad. So, yeah, that could be fixed with that kind of money.
And that would give people a permanent reduction in their energy
bills as opposed to what did happen, which was effective capping
of wholesale prices and some direct assistance to households to
help with a short-term impact on prices, but in a far more
complicated way than you could have done with a windfall tax.
Because what it actually meant was that the government was then
on the hook for hundreds of millions of dollars in payments to
essentially buy out the contracts that had been signed above the
cap so that they didn't get sued by companies who wanted to make
even more money.


David Roberts


Right? And in the US now, we're stampeding toward building these
LNG export terminals, just attempting to follow that very same
narrative. We love our cheap gas and then we love our exports and
then like, wait a minute. Let's take a sharp turn here back
toward politics. One of the things that I have been most
fascinated to hear about since I come from a land of incredibly
stupid, binary, simplistic politics, I always find when I talk to
people from other countries, they want me to tell them about the
subtleties of American politics. And all I can ever tell them is,
no, it's just as dumb as it looks. Just as dumb as it looks from
the outside.


It's black and white, this side and that side. So tell me about
the Teals, this phenomenon of basically what we would call, I
think at home, moderate Republicans, maybe even Liberal
Republicans, which in the context of US politics is an extinct
species, here exists and has some power. So tell us a little bit
about how that came about.


Miriam Lyons


Yeah, I mean, I think the real origin story is a bunch of
community movements starting up in some specific places,
interestingly, not even in inner city Australia, which is where
the Teals had a real landslide in the last election. But there's
one example of a rural area in our state of Victoria where people
were very unhappy with an incumbent MP who was very right wing,
more so than the community. And a bunch of community activists
got together and said hang on, the fact that this person is out
of step with our community means that there is an opportunity to
change things here.


David Roberts


But they would never vote for Labor.


Miriam Lyons


But they wouldn't vote for Labor because it was not the kind of
identity in group. Right. Voting for Labor was just not the thing
that people thought of people like them as doing, if that makes
sense. And so yeah, they got together and ran an amazing campaign
where they picked their own candidate to represent the broader
community and then ran that candidate as an independent —


David Roberts


With no party affiliation.


Miriam Lyons


No party affiliation. And so that sparked movement all over the
country of people realizing, ha, hey, if I'm not happy with my
representation I too can run "Voices of Warringah" or "Voices of
Indi" or "Voices of" all of these different places. There's the
whole "Voices of" basically movement that are based in these
different electorates where the community gets together and says,
hey, if we're unhappy with our representation we can find someone
else.


David Roberts


And this is mostly conservative communities where the
representatives are nutbags and they want something that's not
Labor but not a nutbag.


Miriam Lyons


Exactly.


David Roberts


Which seems like a lot of our communities would want to in the
US. If they had any way out, any option. And so yeah, I should
just say that teal is blue and green. Blue ,to scramble US
brains, blue is the conservatives. And so these Teals, several
fascinating things about them, they're still, I think, what you
would call fiscally conservative but are good on climate.


Miriam Lyons


In other words, they're representing their communities.


David Roberts


Yeah, conservatives who are good on climate and good on social
issues too, right?


Miriam Lyons


I think yeah, exactly.


David Roberts


And they are mostly professional women, is that right?


Miriam Lyons


Which again was a constituency that was wildly underrepresented
when the hard right had control of the Liberals nationally. And I
should also note that we just talked about a couple of examples
where it was hard right MPs who were very at odds with their
community. In some cases these voices of movement started because
even though their MP was from the moderate faction of the party,
they weren't voting like a moderate, they were still voting for
policies that were at odds with the values of the community.


David Roberts


And so now there are these what are called Teals and what sort of
power do they wield? How important are they to politics?


Miriam Lyons


Well, they're a big part of why the coalition lost the last
election in a bunch of its heartland, including seats that it had
held for many decades. So they're a big part of why it is going
to be very, very hard for the National Liberals to get back into
government unless they get better on climate. So that does change
the dynamics a bit. There's also an independent senator from one
of the states who is on a very similar kind of model and that's
senator David Pocock. And he sometimes has a casting vote on
policy, or a very influential vote on policy, needing to pass the
Senate.


So that's the upper house. So that's a bunch of hard power right
there to shape policy as it's made.


David Roberts


And so the Teals are viewed then as allies to Labor on climate.


Miriam Lyons


I think it's a little more complicated than that. I think you've
got a bunch of representation of different sorts, different
places, different sections of the community. Everybody plays
politics against each other sometimes and with each other at
other times. And through that giant shemozzle, sometimes you're
able to get decent policy through.


David Roberts


Imagine complexity and coalition building. I don't suppose the
National Liberal Party has responded to this defection of
moderates by moderating.


Miriam Lyons


Not yet at a national level that you can see as reflected in
their current leadership. But there are increasing numbers of
moderate champions who are being a little bit more outspoken
within the party nationally. I think sometimes those lessons do
take a while to learn. So one can always hope that they're going
to recognize that they're on the wrong side of history, the wrong
side of demographics, the wrong side of economics, and might need
to get with the program. And I guess the one reason to hold out
hope that that might be possible at some point, even though it's
very hard to see right now, is that here in New South Wales where
we're recording this podcast, the moderate treasurer so the
previous treasurer, Matt Kean, was a massive champion of clean
energy, massive champion of renewables.


Instituted a quite ambitious energy transition package to get the
state to when we calculated, I think it was roughly 75% renewable
by 2030. And managed to do that with the support of his whole
party. Bringing his whole party along, including a bunch of rural
conservatives who basically said, well, I can't vote against this
many jobs and this much investment in my electorates.


David Roberts


Interesting.


Miriam Lyons


So the recipe is there like the playbook is there if they want to
embrace the future rather than the past.


David Roberts


Right. And this is also something that's very important to point
out is one thing they can't do is what US Republicans are doing,
which is picking and choosing their voters, or trying to suppress
some voters and bring others out because —


Miriam Lyons


We have an independent Australian Electoral Commission that
actually makes decisions.


David Roberts


No gerrymandering and compulsory voting.


Miriam Lyons


Correct.


David Roberts


Everyone votes. So that alone, I think, is a firewall of sorts
against lunacy, American-style lunacy. Everybody votes. There's
an independent commission that does the district making, and
there's also ranked choice or what we call ranked choice voting,
all of which I think probably has moderating effects on. You
can't get this sort of weird cultish —


Miriam Lyons


It's a lot less about playing to the fringes or even playing to
the base. A lot of it is actually about who can reach disengaged
swing voters, which is its own kind of difficult task.


David Roberts


Yes, but you know they're going to vote like they have to vote.
So that's super fascinating. Of all the reforms that we talk
about in the US, for some reason that one never comes up:
compulsory voting. But from what I've heard about it here, it
really has a lot of effects that we could use in the United
States. What about the climate movement in Australia? We've seen
in the US, the climate movement sort of beating down the door for
years and finally has really sort of made its way into the upper
echelons of the Democratic Party, has pushed climate to the top
of the Democratic agenda in the US.


How big of a force is the climate movement here? Maybe you're
slightly biased.


Miriam Lyons


Yeah, definitely not an unbiased observer, but best attempt to be
objective. If you look at where we are now compared to where we
were a decade ago or a decade before that, and you think about
why that has happened. Right, so the climate movement has got us
to the point where the Liberals are unable to win places in their
heartland unless they have a decent climate policy. Like that is
quite transformative. The climate movement has got us to the
place where large parts of the business sector are very reluctant
to associate themselves with fossil fuels, where banks are
rolling out investing in fossil fuels.


So that is a fairly transformative situation and obviously when
you put that kind of pressure on the corporate sector and the
corporate sector starts to change what it does, that in turn
flows through into politics. So there were some fantastic
campaigns to get 20 something of Australia's biggest companies to
set 100% renewable targets by 2025. Actually, it's the corporate
PPA sector, the power purchase agreement sector, that is
currently underpinning a whole lot of renewables coming into the
system and when that comes in, it changes the economics of the
energy sector and that changes the politics. So a combination of
that corporate campaigning and the community campaigning, that's
just put climate higher and higher on the agenda of the voting
public over time.


That has got us to where we are, but obviously where we are is
still not good enough. So there's a lot further to go and there
have been gaps. So I think that there are a bunch of places where
geographically the climate has built up a whole lot of power to
the point that it is now very hard to take a stance at odds with
decent climate action. But there are a whole bunch of places
where that work really needs to be scaled up. So that includes
the fact that over a quarter of Australia's population is
multicultural and the climate movement in Australia has
historically been very white.


There are fantastic organizations who are working to change that,
like Voices for Power organises multicultural communities. Here
in New South Wales, Democracy in Colour are working to organize
multicultural communities to get climate action that actually
serves their communities. And historically, generally, I think
the climate movement has not done enough to organize in low
income communities and actually have organizing that is resourced
both by and for low income communities getting the kind of clean
energy solutions that serve them.


David Roberts


Let's talk about, briefly, critical minerals. This is something I
didn't know until I started poking around coming down here, which
is that Australia is like, I think, a top five country in almost
all of these critical minerals that people are, which have become
a very common subject of discussion in the climate world in the
US. As we shift to renewable energy, certain minerals are going
to become very hotly demanded and currently a lot of the supply
chain for the minerals, especially minerals processing, goes
through China. But what I did not realize is that Australia is a
top five location for almost all of those critical minerals.


It's a huge, huge source of those minerals. So tell us a little
bit about kind of what role that's playing in people's climate
vision, because right now, as I understand it, they just mine
them and send them abroad and then China processes them and then
Australia buys them back as products. So do people have schemes?
Because part of what IRA does is set the US on a trajectory to
find friendly sources of these things and here's Australia a
friendly source. So what role is that playing?


Miriam Lyons


Yeah, well, if we go back to what it would take for Australia not
to be a Kodak country, the real recipe there is taking the fact
that we are the sunniest continent on earth and one of the
windiest that our solar penetration per capita, like just the
radiation per capita that we have at our fingertips is literally
off the charts. Like you draw a chart and then it's off the top.
And that gives us this enormous potential to take a whole bunch
of the energy intensive materials that the world is going to need
to decarbonize and decarbonize them here. So yes, we're exporting
— we're currently the world's number one exporter of lithium, but
we could also be doing more of the processing of that here using
renewable power. We are currently the world's biggest exporter of
iron ore. We could be doing a massive favor, really, to the world
that needs to decarbonize its primary steel industry by
processing that here using renewable hydrogen, because that will
lower the cost of turning it into green iron. But it will also
lower the environmental footprint of turning it into green iron
because it lowers the land use footprint, because you basically
need half as much renewable hydrogen to make green iron.


If you're using the hydrogen where it's made, rather than
sticking it on a ship and sending it overseas. So there's an
opportunity to do that also feels like a massive responsibility
that we have to eliminate the enormous scope three emissions in
our ore exports.


David Roberts


Right. So the idea is you use your massive wind and solar
resources to generate green hydrogen and use the green hydrogen —


Miriam Lyons


To take our iron ore and turn it into green iron. And then that
gets stuck on a ship much more efficient. And then that gets
turned into green steel in a bunch of our trading partners where
we're currently sending the iron ore that have much more limited
availability to do that kind of large scale renewable hydrogen
production, but that would like to keep their steel industries so
they get to still make the steel. Right? And there's a bunch of
people who are really interested in this as a pathway and there's
already a bunch, know, MoUs getting signed with companies in
South Korea, in Japan and Australia looking at this pathway,
which makes so much sense.


David Roberts


Yeah, it sounds politically popular here too. Like when I was
talking know, lawmakers in Canberra, this seems to be —


Miriam Lyons


Everybody loves manufacturing —


David Roberts


Everybody's on board with this.


Miriam Lyons


People love making something that hurts when you drop it on your
foot. But one thing that is incredibly important to remember when
we're talking about all of this is that we are a colonized
country without a national treaty. And all of this land is First
Nations land, which obviously creates a clear moral obligation
for anybody doing any of these developments to seek the free,
prior and informed consent of the First Nations owners of the
land where these projects are happening. There are also
inadequate but real hard legal obligations for any company in
most of the places where you'd be looking at these kinds of
developments.


So if people are looking at Australia externally and going, "This
is a massive opportunity," do make sure that you're doing your
homework and figuring out when you're asking about any specific
project, whether the company and the developer involved has
actually negotiated in good faith with First Nations people. And
there are some good examples starting to pop up of First Nations
communities instigating large scale renewable projects
themselves.


David Roberts


Potentially a huge opportunity for those communities.


Miriam Lyons


Exactly. It really depends on the community, whether that is part
of the vision for their own self-determination. Right. But in
some cases, you've got these projects getting instigated where
First Nations people are actually getting equity in some of these
big projects. And that is, of course, what you would be wanting
to see.


David Roberts


Right. And tell me about the phrase "hydrogen superpower,"
because I hear it over and over and over again. Tell me what role
that's playing. What is that vision, and do you buy it?


Miriam Lyons


I think that because of the Dutch disease of the mind that we
talked about earlier, where it's really hard for Australia to
imagine anything that doesn't look like what we've already done.
The hydrogen hype was very effective in breaking the back of the
idea that Australia could never export anything that wasn't
fossil fuels.


David Roberts


Right. It's just a different gas.


Miriam Lyons


Yeah. But what is actually exciting is that while we only want to
use hydrogen for the things that we definitely need it for
because it's a lot less energy efficient than electrification or
efficiency for that matter, we do need it for some things, and we
do need it for things like green iron. And so where we do need
it, there is this enormous potential and a clear competitive
advantage for Australia economically in using the renewable
hydrogen where we make it so that we're essentially exporting
embodied decarbonization.


David Roberts


Okay, well, this is a lot to take in and this is a huge question
to wrap up on, but I would like to hear two things from you. One
is, as we said, Labor is at once suffering from a little PTSD
from its previous backlashes and failures on climate and is a
little leery about spending too big or going too big. But on the
other hand, there's this enormous momentum from the climate
movement, there's this enormous momentum from the public. There's
this huge resource available. There's this pathway now via
critical minerals and iron ore and hydrogen for Australia to
pivot and become a productive force for good in the climate world
rather than just a source of emissions.


So if you were predicting or guessing, where do you think all
this going to shake out? What do you think Labor might do? What
do you think it might actually take on and try to do? And then
following up on that, what would you like to see it do that's
within the realm of plausibility?


Miriam Lyons


Well, I mean, if we were starting from what I'd like to see them
do, let's start with what has to happen and work backwards from
there. So I'd love to see us actually embrace the fact that we're
going to have to fully decarbonize our domestic and export
economies and work backwards from there with a strategic plan to
transform the economy and a plan to look after workers and
communities along the way. That's what I'd love to see, and that
is what the science tells us that we need to see. What I would
love is actually to see them stop thinking incrementally and
start thinking transformatively.


David Roberts


It seems like IRA, the Inflation Reduction Act, has at least sort
of like introduced that glimmer of possibility. The fact that the
US sort of went big at least has put going big on the table for
Australia, it seems like.


Miriam Lyons


Yeah, absolutely. Yeah. I mean, basically right now they're doing
a bunch of modest and incremental sensible things when it comes
to decarbonizing the domestic energy sector and then kind of
putting their hand over their eyes when thinking about the damage
that our coal and gas exports are doing to the world. And modest
and incremental is better than Tony Abbott grade wrecking, but it
really doesn't cut it in a world where the IPCC is saying we have
to be net zero by 2040 and the International Energy Agency is
saying we need no new coal and gas starting now.


So modest doesn't match the scale of the problem, but it also
doesn't match the scale of the opportunity. And Bowen, our Energy
Minister, loves to say that the world's climate emergency is
Australia's job's opportunity and it is true. I will believe that
we are embracing that opportunity at the scale that it warrants
when I start seeing announcements that are closer to the scale of
investing in a bunch of silly submarines, in a bunch of terrible
defense policy at the cost of hundreds of billions of dollars.


David Roberts


We don't have time to go down that rabbit hole. But for some
reason Australia is buying nuclear submarines. That's broken my
brain when I found out about it.


Miriam Lyons


Yeah. So basically it's a question of scale and speed. So they
need to be both embracing the scale of the jobs opportunity when
it comes to actually ensuring that we get the firmed renewables
to the industrial hubs that will be doing this decarbonization of
our exports for the benefit of us, for the benefit of the world.
Like when we're actually seeing the renewables being delivered at
scale and the investment in that at scale that will start getting
to the point where we're really matching the scale of the
opportunity. Also when we're actually recognizing that the job's
not finished when it comes to clean energy justice at a household
level.


And that the way that you deal with the volatile prices that we
have been seeing because essentially our coal and gas industries
are quite greedy, is to actually enable every household to access
the benefits of energy efficiency, of rooftop solar, particularly
the renters who have really been locked out until now.


David Roberts


What would that look like, though? Will this be one big policy
package, do you think? Do you want to see a renewable energy
trading scheme or big subsidies and investments like IRA?


Miriam Lyons


I want standards and investment and justice, David!


David Roberts


Awhee!


Miriam Lyons


Yeah, I think we need a great big package that delivers the clean
jobs to the regions and the clean energy savings to households.
Some of that would involve some standards at a national level.
Some of it would involve some payments to the States in order to
enable them to expand household clean energy access, because the
Feds have most of the money and the States do most of the service
delivery in this country. Very familiar picture, I'm sure. So,
yeah, if we were to see something like that at scale, then we'd
be getting there.


David Roberts


All right. Fingers crossed. Well, Miriam Lyons, thanks so much
for coming in and chatting and explaining Australia to us.


Miriam Lyons


Thank you.


David Roberts


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