“Throw Away” Conventional Economics to Become a Renewable Superpower – Watts Up With That?

Essay by Eric Worrall

“… productivity … has deluded far too many of the economics profession’s conventional thinkers.”

Ross Garnaut: Prophet with a sunny vision of our glorious future

Ross Gittins
Economics Editor 
May 12, 2025 — 12.15am

Economist Paul Krugman’s endlessly repeated maxim that “productivity isn’t everything but, in the long run, it’s almost everything” has deluded far too many of the economics profession’s conventional thinkers.

It’s a throwaway line that should be thrown away.

…

Fortunately, among the profession’s abundance of unproductive thinkers is a lone prophetic, and so productive, thinker, Professor Ross Garnaut, who sees not only how we can minimise the economic cost of the transition to clean energy, but also what we can do for an encore. What we can do to fill the vacuum left by the looming collapse of our fossil fuel export business (which, by chance, happens to be our highest-productivity industry).

…

It was Garnaut who first had the vision of transforming Australia into a “Superpower” in a world of ubiquitous renewable energy. And it was he who uncovered the facts that made this goal plausible.

…

This would “generate export income for Australians vastly in excess of that provided by the gas and coal industries that will decline as the world moves to net zero emissions over the next few decades”.

Garnaut concludes: “The new industries are large enough to drive restoration of growth in Australian productivity and living standards after the dozen years of stagnation that began in 2013.”

…

Read more: https://www.smh.com.au/business/the-economy/ross-garnaut-prophet-with-a-sunny-vision-of-our-glorious-future-20250511-p5ly7n.html

Funny how renewables, the allegedly cheapest form of energy, always seems to require accepting a lower standard of living during the transition.

The reality is expensive green products produced by renewables are never going to “generate export income for Australians vastly in excess of that provided by the gas and coal industries“, nor will they “drive restoration of growth in Australian productivity and living standards“.

The reason is, unlike Australia, the rest of the world accepts nuclear power as a zero carbon energy source.

Even renewable obsessed nations like Germany are happy to receive nuclear power from France when their fake German renewable energy system stops producing.

Given this acceptance of nuclear, goods which are more expensive than what can be produced by French zero carbon nuclear power, which in France sells wholesale for between €0.07 – €0.11 / kWH, simply won’t be competitive – especially when you add the cost of shipping goods all the way from Australia to the sale price. 

Hydrogen fuel, if it ever becomes a serious option, will never be economical to export from Australia. It will always be cheaper to manufacture hydrogen using nuclear powered hydrolysis in-situ in the Northern Hemisphere, than producing hydrogen using Australian solar energy then transporting the hydrogen to Europe.

Even farfetched plans to run an undersea electricity cable from Australian solar plants to Singapore are dubious. Why would Singaporeans bother to buy intermittent Australian solar energy supplied via a 2300 mile undersea cable, when they can purchase endless 24 hour reliable zero carbon nuclear power from next door in Indonesia?

Singapore is a truly 24 hour city, they use a lot of energy at night, because many people run Aircon 24 hours, and it is too hot in daytime to do a lot of important economic activities.

Given the evidence renewables are a flat bust in terms of export and domestic manufacturing potential for Australia, in my opinion claims that renewables could form the basis of a future made in Australia manufacturing renaissance are nothing more than a cruel political fantasy.

Related