Some of you may have seen the television program Afternmath: The World Without Oil which provides a glimpse of what life on Earth (and our standard of living) would be like if all of our oil was to suddenly disappear. (You can see the program in 3 parts on YouTube.)

Now Climate Spectator takes us into a world without coal.  Or at least what it will look like through the eyes of Indian coal mining firm Gujarat NRE Coke if Australia goes through with its planned carbon tax next year.

A schooner of beer that costs $60? A loaf of bread for $20. A shirt that costs $350? There have been some wild claims on both sides of the climate change and carbon tax debates, but nothing quite matches the investor update presented last week by the Indian-owned and Wollongong-based coal miner Gujarat NRE.

Gujarat NRE warns that a carbon tax will cause stratospheric price rises… and would render thousands jobless, plunge the economy into “de-growth,” create instability and penalise the entire community.

The firm argues that coal was responsible for the transformation of the planet caused by the Industrial Revolution. Without coal, Gujarat says, civilisation would not have developed as it has.  Without coal forests would be denuded, unemployment would rise to “humongous” proportions, and worse, “mankind would be stumbling in the quagmire of lost opportunities”.  A carbon tax will kill the goose that laid the golden egg.

And there are no alternatives to coal says this firm.  Nuclear is unsafe (look at Japan), natural gas is costly and will be even more so if it has to replace coal, and renewables will never be able to produce the amount of energy that coal does.

According to BP’s Statistical Review of World Energy 2011, coal accounts for 30% of world energy consumption versus 2% for renewables. China consumes almost half of the world’s coal and Australia is a major supplier of coal to China.

Coal also is the largest source for the global production of electricity as the graph below shows. (Note that “renewables” is almost entirely hydropower.)

 

Austraila is particularly dependent on coal which produces almost 80% of that country’s electricity.

Based on these factors, the Climate Spectator gives us some helpful financial advice:

The lesson from all this? Best to go long six-packs. Big time. Particularly if the carbon price legislation is passed. If Gujarat is right, the value of beer will soar. Bread too, but it might not last as well. And if Tony Abbott wins (the Australian election) and the carbon price is repealed, then you’ll just have to drink them.

 

 

Tags: , , , , , ,