Consistency, persistence and stubbornness. They can be tremendous virtues, so long as you are sure you are right.

And, if you’re not, then as economist John Maynard Keynes is said to have stated: “When the facts change, I change my mind. What do you do?”

National Party leader Barnaby Joyce and his key lieutenants may finally have capitulated after months of internal bickering over whether to endorse a carbon emissions reduction target at the upcoming climate summit in Glasgow.

The last-minute deal was short on detail, with vague mentions of regional jobs and uranium but nothing on renewables.

In the process, the party has left itself exposed, with climate and energy policies increasingly at odds with those who live, operate and invest outside the capitals, including its rural constituents and, in particular, the world’s biggest miners.

Just compare these two announcements from last Thursday.

The Nationals needed several days of meetings before reaching a consensus.(AAP: Mick Tsikas)

“We have not said we are doing this,” Mr Joyce told reporters in Canberra when questioned over whether the party would support Prime Minister Scott Morrison’s proposed net zero target.

“That decision is yet to be made.

“I’m sure everyone understands that it’s not a foregone conclusion that the Nationals agree to this, not by a long shot.”

A few hours earlier, Rio Tinto’s recently minted chief executive, Jakob Stausholm, was saying exactly the opposite. The miner, he announced, would spend $10 billion to treble its 2030 carbon reduction targets from 15 per cent to 50 per cent within the next nine years.

“We have a clear pathway to decarbonise our business and are actively developing technologies that will enable our customers and our customers’ customers to decarbonise,” he said.

Rio Tinto is Australia’s biggest iron ore exporter and one of the world’s largest aluminium producers. The decisions made in its boardroom, along with BHP and Fortescue Metals — both of which also have jumped headlong into a low emissions future — have rendered the petty bickering and posturing from Canberra irrelevant.

The decisions of companies like Rio Tinto are more powerful than government policy.(Supplied: Rio Tinto)

Between them, they allocate vast amounts of capital, multiple billions of dollars each year, that determine regional employment opportunities and export income. The real decisions on climate, energy and emissions already have been made.

They’ve adopted these measures over the past few years partly because of global pressure and partly because of the business opportunities on offer in a decarbonised world, and all in a policy vacuum from Canberra.

Why the sudden backflip?

Our climate and energy policies suddenly appear to be moving into the 21st century, some 21 years after the new millennium began.

Until recently, senior government members openly derided the science of climate change

Energy and environment policies were the weapons adopted to differentiate ideology and divide the electorate and provide the dagger for a passing parade of political leaders.

Former prime minister Tony Abbott axed the carbon tax.

Mr Morrison, as treasurer, famously stood in parliament four years ago with a lump of coal, claiming that the nation’s jobs and energy security depended upon a continuation of coal-fired power generators.


Three years ago, the Business Council of Australia described a 45 per cent emissions reduction target as “economy-wrecking”.

Then suddenly, a few weeks ago, it all changed.

The Prime Minister wants to head to Glasgow next week to sign Australia to a renewable energy world, to pledge to net zero emissions by 2050 at COP26.

The Business Council finally worked out that a low carbon world would boost the economy by just shy of a trillion dollars over the next 50 years, as industry moves to cheap and clean electricity.

Even Rupert Murdoch, whose News Corporation for decades has pilloried anyone proposing a technological advancement on coal-burning steam engines, jumped on board.

European leaders have vowed to take harsh action against countries that fail to achieve climate targets.(AP: Virginia Mayo)

While the speed at which this has taken place appears bewildering, in reality, there was little choice. The European Union and other nations are looking at imposing heavy penalties on countries that do not have carbon emissions reduction programs or carbon pricing in place. 

The world is changing, and we are at grave risk of being left stranded. More than 130 countries either have signed up to net zero emissions by 2050 or actively are considering it.

As the fight within the Coalition heated, Treasurer Josh Frydenberg delivered a blunt warning that the jig was up.

“We cannot run the risk that markets falsely assume that we are not transitioning in line with the rest of the world.

“Were we to find ourselves in that position, it would increase the cost of capital and reduce its availability.”

In plain English: if we don’t change, it will cost us dearly.

Speed is of the essence

The pathway to net zero by 2050 needs the wholehearted support of renewable-energy industries.(Reuters: Giuseppe Piazza)

Reaching net zero by 2050 will be no easy task.

It involves the electrification of everything, and almost all of that electricity generated through renewables

The International Energy Agency has outlined a pathway to achieve this. But it requires significant increases in government and private sector investment in renewables and drastic changes in consumer behaviour.

Investment in renewables will need to double in the five years to 2030 to around $US600 billion per annum, compared with the $US308 billion ($803 billion) in the five years to 2020. That’s the green part of the bars in the graph below.

It also requires a significant downgrade in fossil fuel-generated electricity, indicated by the black and brown segments.

The US, under President Joe Biden, has been driving this accelerated move to lower emissions. It currently produces a large portion of its electricity from coal and under former president Donald Trump, it significantly reduced its coal consumption despite his efforts to the contrary.

Analysis by Morgan Stanley indicates that, for the US to achieve its ambitions, it will need to eliminate coal from electricity generation by 2035, via a massive lift in renewables.

The investment bank estimates renewables will account for more than half its electricity generation within 14 years when coal will be completely phased out. At the moment, renewables, excluding hydro, account for just 11 per cent.

China recently committed to no longer funding coal-fired electricity plants across the globe as it desperately tries to clean up its atmosphere and get in step with the rest of the world on emissions reduction.

But with an energy crisis sweeping the globe, and a massive shortage of coal reserves potentially forcing a 12 per cent shutdown of industry in coming months as blackouts sweep the country, it last week backtracked, dealing a potential blow to the UK’s ambitions to achieve a coal phase-out at next week’s summit.

The slow death of coal

America’s complete exit from coal-fired electricity generation will strike a massive blow to the global trade in coal and thermal coal mining.

It has been in serious decline for more than a decade, as this graph illustrates.

Rio Tinto read the room years ago. It finally offloaded its massive Hunter Valley operations in 2017 and made a complete exit from coal the following year.

BHP now is following suit. It sold its Columbian thermal coal operations in June and six weeks ago, offloaded its Mt Arthur mine in the Hunter Valley, ridding itself of thermal coal.

While the company retains its massive steel-making coal operations in Queensland, it last week announced that it had teamed up with South Korean giant POSCO to search for alternatives to coking coal in the steel-making process.

Although its prices are soaring, coal will have a bleak future if net zero by 2050 is to be achieved.(AP: Charlie Riedel)

UK-listed Glencore, and US coal group Peabody, have taken the gamble, picking up many of the dumped assets. And, with coal prices soaring right now, they are making a fortune. But the future looks bleak for coal.

In an even more radical move, Australia’s other big iron ore producer, Fortescue, has embarked upon an ambitious plan to power the future with green hydrogen fuel, scouring the world for deals on hydroelectricity and renewables to produce the fuel. 

In a domestic blitz a fortnight ago, the founder and major shareholder attempted to sign up green energy deals with state governments of NSW, Tasmania and Queensland.

But the very same week, the normally unflappable Mr Forrest lost his cool with the National Party leadership’s manoeuvring and accused it of ignoring the facts on coal in a bid to chase votes. 

“You might crack a few more votes at the coming election, but after this coming election, you will be seen for what you are: just a fearmonger trying to save your political job, not the jobs of every regional Australian.”

Fighting words.

Posted , updated