The International Energy Agency, once known for an anti-renewables bias, now says a more ambitious transition will lower prices
Just as the Liberal party walked away from a firm net zero emissions target, a new International Energy Agency report told the world that a more ambitious clean energy transition means lower household power bills.
The timing is exquisite.
The conservative side of politics has settled on a catchcry against “net zero at any cost”.
As Alex Hawke, the shadow industry minister, said this week: “I think we’re all on a unity ticket that when the Labor government says we’ll get net zero at any cost to the public, the economy – we’re all against that process.
“It won’t work and it’s going to cost a fortune. It’s going to drive a lot of people out of business and cause living standards to decline, so there’s a lot of consensus there.”
Unfortunately that consensus – that the drive to renewable energy leads to lower living standards and high energy bills – instantly collapses the moment it makes contact with, well, the real world.
The IEA’s latest 500-plus-page report is the latest example of this, although there are plenty of others.
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The Paris-based organisation’s outlook considers three scenarios which ascend in order of emissions reduction ambition.
The first is the “current policies scenario”, or CPS, which includes “a snapshot of policies and regulations that are already in place and offers a cautious perspective on the speed at which new energy technologies are deployed and integrated into the energy system”.
The second is the “stated policies scenario” (STEPS), which considers a broader range of steps that policymakers have flagged but not yet implemented.
The last takes a different approach.
The “net zero emissions by 2050 scenario” (NZE) describes a pathway to reducing global energy-related emissions to net zero by mid-century.
By the logic of the Coalition and their fellow travellers, the more ambitious we are in pursuing electrification and net zero, the higher household energy bills should be.
The opposite is true, the IEA says.
Under the NZE scenario, total energy bills in advanced countries, including spending on petrol and gas, are about 75% cheaper by the middle of the century than under the CPS scenario.
“In the NZE scenario, faster efficiency gains and a more rapid shift away from fossil fuels – through heat pumps and EVs – more than compensate for higher electricity spending, even when the effects of phasing out inefficient fossil fuel subsidies are taken into account.
“Although this scenario requires higher upfront spending on new equipment and efficiency improvements, it leads to a clear decline in total household energy bills in advanced economies.”
To be clear, the IEA is not a clean energy lobby group.
In fact, until relatively recently, the organisation has historically been known for its anti-renewables bias.
The bottom line is that instead of a principled stand for good economics, the Liberals are engaging in virtue signalling to a shrinking tribe of hold-outs.
Setting themselves against the tide of history, the Liberals cannot articulate alternative policies even as they seek to undermine the tens of billions of private investment pouring into clean technology in this country.
So much for being the “party of responsible economic management”.