Australian business leaders are only now summoning the courage to speak out against Labor’s ambitious renewable energy targets, which they describe as “impossible,” according to Nick Cater.
For a long time, many in the business community were silent, referring to Labor’s 2030 emissions reduction goals as “challenging” and the prospects of meeting them as “doubtful.” But as the realization grows that relying solely on intermittent renewable energy is not feasible, these leaders are increasingly questioning the government’s assertions that energy costs will fall under its plan.
David Alexander of the Australian Chamber of Commerce and Industry recently noted that while some may hope renewables will become cheaper, the reality is that energy prices are rising, creating substantial challenges for businesses. The idea of replacing coal’s reliable baseload with intermittent wind and solar energy, especially without the necessary infrastructure, is widely seen as technically and economically unworkable.
Most countries have not tried to run their energy systems solely on variable renewable sources, recognizing the risks involved. Yet many Australian business organizations went along with the government’s plan, even as it diverted billions of dollars into renewable energy projects that could have been more effectively used elsewhere. Small and medium-sized businesses have been hit hard, with energy prices pushing some to close their doors, while manufacturing jobs have been moved overseas.
These leaders were not silent in the past. In fact, many were standing alongside Prime Minister Albanese when he and Energy Minister Chris Bowen signed the document committing to the “impossible” energy transition on June 16, 2022. Back then, the Business Council of Australia even expressed that Labor’s target was too modest and pushed for more ambitious reductions.
The business community’s compliance with this strategy raises important questions: How did these leaders convince themselves that the government’s renewable energy targets were achievable? Were they not skeptical about the feasibility of such an aggressive timeline for expanding wind and solar energy generation?
For instance, Chris Bowen’s target of installing a 7 MW wind turbine every 18 hours or 22,000 solar panels daily until 2030 seems, at best, unrealistic. Yet at the AFR Energy & Climate Summit in October 2022, no one reportedly challenged Bowen’s projections, despite the improbability of such goals.
A potential explanation for the business community’s compliance may lie in financial incentives. Investors in wind and solar projects are primarily interested in financial returns, not necessarily in ensuring a reliable and efficient energy supply. This raises concerns about whether financial motivations have driven corporate support for policies that may not be viable in the long term.
Another factor to consider is the phenomenon of groupthink, where individuals conform to collective ideas and avoid voicing dissent due to fear of reputational damage or ostracism. Social psychologists suggest that this can result in disastrous consequences, as demonstrated by the 2003 Space Shuttle Columbia disaster, where engineers knew of risks but failed to speak up due to a fear of disrupting consensus.
In Labor’s case, the government has often dismissed dissenting opinions, branding anyone who questions its plans as a climate change denier or an ally of the fossil fuel industry. This culture of silencing opposing views has prevented the country from having a meaningful debate about the potential consequences of the renewable energy push.
It is only now, as the Albanese government nears the end of its term, that some business leaders are speaking out. They are beginning to admit that meeting the 82 percent renewable energy target by the end of the decade is unrealistic, and that the plan must be reconsidered.
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