The year is winding down and for some Australians that means thinking about Christmas or the beach. For others, it will mean considering how they will cope with the next heatwave or bushfire. Already, two states have been burning.
The least bold prediction for the summer is that temperature records will tumble. It’s what happens when temperatures are on average 1.5C hotter than a little over a century ago.
If logic ruled, it might sharpen focus for the Australian political class going into 2026 on prioritising how to tackle the country’s addiction to the main driver of this change: the production of fossil fuels.
It’s been two years since the climate change minister, Chris Bowen, declared “the age of fossil fuels will end” after nearly 200 countries agreed that the world should transition away from use of coal, oil and gas. That position was reinforced at the recent Cop30 summit in Brazil, when Australia signed up to what activists described as its strongest declaration yet that countries should act rapidly on fossil fuels to try to limit global heating to roughly where it is now.
What does that mean the country should do at home? So far, on its world-leading coal and gas export industries, the message from the government is: not much different.
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Change is happening in the country’s main power grid, where renewable energy contributed nearly 50% of electricity over the past week, surpassing coal-fired generation. That trajectory is increasingly clear, though the pace is uncertain and the transition faces resistance.
The response to a recent report by the Australian Energy Market Operator was a snapshot of how the climate challenge is often framed. The report warned the investment needed in system security measures to keep the power grid functional as ageing coal plants closed was not happening fast enough. It raised the possibility that the Eraring coal station, the oldest in the country, may have its life extended if enough synchronous generators – spinning machines that provide the inertia that the system needs – were not connected in time.
Some news media translated this into headlines warning of blackouts if Eraring shut in 2027. The message to a casual reader or listener was reduced to a caution not to shut down fossil fuels.
The report had a different emphasis. Its central point was that investment in grid security needed to accelerate, and that a short extension of the life of a coal plant could be necessary if that didn’t happen in time.
Put bluntly: change is coming, we better get moving.
That message should be familiar. It echoes the advice from scientists, global investors, plenty of industry, most of civil society and the leading international agencies. But, as the treatment of the Aemo report showed, it often receives only lip service in an environment that struggles to imagine a world beyond reliance on fossil fuels.
This is most obviously the case with Australia’s biggest contribution to the climate crisis – its world-leading coal and liquefied natural gas (LNG) exports.
Australia is second only to Indonesia in shipping thermal coal, which is burned to create electricity. It rivals the US and Qatar as the biggest seller of LNG. It is easily the biggest exporter of metallurgical coal, which is used in steelmaking.
The country has not reduced this footprint since the then Coalition government signed up to the landmark Paris climate agreement in 2015. Instead, it has sprinted in the opposite direction.
A recent report by Oil Change International found Australia led the world in expanding its oil and gas industries between 2015 and 2024, increasing production by 77%.
On coal, Australia is shipping more of the thermal stuff than it was a decade ago. And the Albanese government has approved at least 32 fossil fuel developments and expansions since its election in 2022, overwhelmingly for export.
Some in the government appear to believe these exports can continue indefinitely. Dan Repacholi, the Labor MP for Hunter in the New South Wales coal belt, last month told parliament it was “rubbish” to suggest the government’s commitment to reaching net zero emissions by 2050 meant coalmines would have to shut because “net zero is about one thing: offsets”.
Under this thinking, pollution can continue at existing or greater levels indefinitely. Nothing to worry about.
But the scientific advice plainly says the opposite – that reaching net zero emissions will require deep cuts in emissions and limiting the use of offsets to cases where there are not viable alternatives.
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In reality, if the world is to successfully deal with climate change the techniques used to create offsets – mainly related to planting or protecting trees and other vegetation – will mostly be needed to suck historic carbon dioxide from the atmosphere as part of a “negative emissions” program. The world will fail if they are deployed to justify burning dirty fuels when there are alternatives.
That’s the science. If you believe Australia has an ethical responsibility to act on climate, that should be enough.
But the more potent political argument that Australia needs to do much more to prepare for an end to its fossil fuel exports is likely to be based on economics.
When demand for coal does fall, China and India are likely to cut imports first
Treasury modelling in September found the value of coal and exports could crash by 50% in the next five years, regardless of how fast Australia cuts emissions domestically. It forecast that the volume of coal exported would drop by between 42% and 51% over the next decade. LNG exports would fall by about a quarter.
Why? Because despite the best efforts of the leaders of the US, Saudi Arabia and Russia, most countries are preparing for a world less reliant on fossil fuels.
A new report by the advisory firm Climate Resource argues that if countries act to meet their targets the decline of the coal export industry could come even faster than Treasury suggests. It found demand for Australia’s thermal coal – mostly from NSW – could fall 64% or more over the next decade. The Queensland-based metallurgical coal industry could reduce output by at least 28%.
It indicates when demand for coal does fall, China and India are likely to cut imports first, allowing their domestic thermal coal industries a more gradual decline.
South Korea, Australia’s fourth-biggest market for thermal coal, has already signalled it is headed for the exit, last month joining 60 other nations in the “Powering Past Coal Alliance” and pledging to shut all its coal plants by 2040.
Climate Resource’s Dr Anita Talberg says the message for Australia is that it should be doing more to manage economic risks. That includes helping fossil fuel communities through what is coming and expanding its commitment to foster the green industries it wants to build.
Her warning is the same as that from scientists after the bushfires that this week destroyed parts of NSW and Tasmania: “The worst thing we can do is not prepare.”
Expect to hear that a lot more next year.
Adam Morton is Guardian Australia’s climate and environment editor and writes the Clear Air newsletter
