Malcolm Turnbull either doesn’t understand how global commodity markets work or he is betting that most Australians don’t. Either way, the PM’s #coalisamazing moment yesterday was not a great way to start a new conversation about the reality of the Australian economy and the choices we face.

The Prime Minister dismissed calls for a global moratorium on new coal mines from the likes of Sir Nicholas Stern and former Reserve Bank boss Bernie Fraser by saying a moratorium was “not sensible from an economic point of view”. Let’s be clear, Nicholas Stern and Bernie Fraser are economists; the Prime Minister is not.

The Prime Minister was completely and utterly wrong when he argued that “if Australia were to stop all of its coal exports it would not reduce global emissions one iota. In fact, arguably it would increase them because our coal, by and large, is cleaner than the coal in many other countries.”

Echoing the lines of the Minerals Council of Australia and his Resources Minister Josh Frydenberg, Mr Turnbull also went on to argue that exporting coal was ‘an absolutely critical ingredient’ in alleviating hunger and world poverty.

The Prime Minister’s debating skills are widely renowned, but while clever arguments might win court cases they don’t solve real world problems like climate change. Sadly for those hoping that our public debate might have turned a corner under our new PM, if we break his arguments down we see that not only are they flawed, they aren’t even that clever.

First, there is a fundamental contradiction in the PM’s argument. On the one hand he argues that exporting more coal will help reduce “energy poverty”, and on the other he argues that our coal exports can do nothing to help or harm global emissions. Logic tells us that at least one of those arguments is complete bollocks, and empirical evidence suggests that both are. If the 2 billion tonnes of coal that will come from the 40 km long coal pits of the Adani/Carmichael mine are to provide electricity to those who currently have none, by definition, the extra coal will lead to an increase in emissions. So which is it? Will the enormous new coal mines help provide energy to the poor or will it displace the coal sold by other countries? It can’t do both.

Second, economics 101 tells us that when you increase the supply of something it pushes the price of that something down. Doubling our iron ore production pushed the price of iron ore down. More houses up for auction pushes real estate prices down and, of course, the taxi industry is always trying to prevent new entrants (an increase in supply) precisely because cabbies know that an increase in supply will lead to a reduction in price.

World demand for coal is flatlining at the moment, which means that every new mine that opens pushes the price of coal down. But you don’t have to take my word for it — the global head of Glencore, the world’s largest coal trader, has repeatedly called for coal mining companies to cut supply in order to stop prices falling further.

Then there is the claim that burning Australian coal somehow reduces greenhouse gas emissions because it’s “cleaner”. It isn’t — not the coal from new proposed mines, anyway. As any resource economist will tell you, you dig up the high-quality, easy-to-get stuff first. That’s why we’ve had coal mines in the Hunter for a century, digging up “Newcastle Benchmark” coal. The huge new coal proposals, like Adani’s Carmichael mine, will produce coal that has energy content far below this benchmark. So while Australia has some high-quality coal in general, that is not what the new mines would be producing.

“Clean coal” in general has been trotted out, in desperation, over the years — always with iron-clad promises that a breakthrough was just around the corner (the head of the Australian Coal Association back in 2009 assured us that we’d have carbon capture in 2015). We’re still waiting.

Struggling debaters often lurch for a “call to authority”. Unfortunately for Turnbull, he clutched for the International Energy Agency to back up his belief that the world will need to burn a lot more coal while it is tackling climate change. Leaving aside the fact that the IEA projections for coal consumption have been spectacularly wrong in the past five years, not even the IEA calls its guesses “forecasts” about world demand for coal in coming decades. Rather, the IEA makes ‘scenarios’ based on a wide range of assumptions.

For all of Malcolm Turnbull’s talk about the need to tackle climate change, his desire to build enormous new coal mines can be seen as his bet that other countries will not make significant cuts to coal consumption in the coming decades. There is simply no plausible scenario in which Australia succeeds in doubling its coal exports and the world succeeds in reducing greenhouse gas emissions.

The simple fact is that a world that is rapidly tackling climate change us a world that will need less coal mines, not more. Our prime minister’s ‘faith’ in coal’s future speaks volumes about what kind of world he is actually planning for.

The Prime Minister’s penultimate debating trick is the false dichotomy, otherwise known as the cheap shot. In suggesting that those who want to double Australia’s coal exports are motivated by helping the world’s poor, he is suggesting that those who oppose the expansion of coal exports do not care about the world’s poor. I think that a government that drastically cut our aid budget lecturing those who are concerned with climate change about the “moral obligation” to help the poor is obscene.

Scientists estimate that the particulate air pollution caused by burning coal kills 460,000 people per year, most of them in low-income countries. Scientists tell us that the impacts of climate change will be most severe in those same countries. The professors of health and the Nobel Prize-winning scientist among the 61 people calling for the moratorium on coal certainly don’t think exporting climate change and coal dust is a good way to help the poor.

Malcolm Turnbull is a good debater, and in a democracy words and arguments matter. But sophistry cannot conceal the simple mathematics of climate change. We need to burn less fossil fuels, and no rhetoric can conceal the simple economics that you don’t need more mines to make less coal.

It is a pity that the announcement of our new chief scientist, Dr Alan Finkel, was accompanied by such an impressive destruction of the role of science in our democracy by a man widely regarded as one of the best debaters of his time. Even more so when you realise the debating points weren’t even that good.

Peter Fray

Save 50% on a year of Crikey and The Atlantic.

The US election is in a little over a month. It seems that there’s a ridiculous twist in the story, almost every day.

Luckily for new Crikey subscribers, we’ve teamed up with one of America’s best publications, The Atlantic for the election race. Subscribe now to make sense of it all, and you’ll get a year of Crikey (usually $199) and a year’s digital subscription to The Atlantic (usually $70AUD), BOTH for just $129.

Peter Fray
Editor-in-chief of Crikey

JOIN NOW