Japan is closing its old, dirty power plants – and that’s bad news for Australia’s coal exports

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Llewelyn Hughes, Crawford School of Public Policy, Australian National University

Last month, the Japanese government announced a plan to retire its fleet of old, inefficient coal-fired generation by 2030. And what happens to coal power in Japan matters a lot to Australia.

Australia shipped more than A$9 billion dollars’ worth of thermal coal to Japan in 2019 – about 12% of our total thermal coal exports.

In the short term, several new coal plants are being built in Japan to replace scrapped capacity. But there are signs investors are not flocking to invest in expensive new Japanese coal technology.

And in the long run, the investment environment for new coal technology is worsening. If Japan’s commitment to coal weakens, that will mean less demand for Australia’s exports.

Coal on a ship at the Japanese port of Nakhodka. Japan is phasing out its old coal infrastructure.
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Japan’s changing coal fleet

Almost all Japan’s nuclear power stations remain shuttered ten years after the Fukushima disaster. The Japanese government has positioned coal as a long-term hedge against the possibility the nuclear power restarts will not proceed as hoped.

However, Japan has also been criticised for its lack of ambition on plans to address climate change under the Paris Agreement.

Last month, the government signalled it will decommission about 100 inefficient coal-fired power units. It aims to reduce coal’s share of the power mix to 26% by 2030 – down from 32% in the 2018 financial year.

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The big questions are: what are the prospects for Japan’s coal fleet, and what does this mean for Australia?

The Japanese government is supporting investment in newer plants, including some that use a high-pressure “gasifier” to turn coal into gas. But these types of plants are expensive to build. With a typical coal plant expected to operate for about 40 years, companies are wary of making huge outlays with relatively limited time to recoup the investment.

Reflecting this, last year Osaka Gas withdrew plans to build a 1.2 gigawatt (GW) coal plant in Yamaguchi Prefecture. Tokyo Gas, Kyushu Electric and Idemitsu also abandoned plans to build a 2GW coal plant in Chiba Prefecture near Tokyo. In total, 30% of planned investment in coal power has been scrapped since 2016.

Then prime minister Malcolm Turnbull shakes hands with a Japanese dignitary at Loy Yang A power station in Victoria. Japan’s phase-out of old coal plants raises questions over its demand for Australian coal in the long term.
Julian Smith/AAP

Renewables are also becoming increasingly important. Japan has big plans for offshore wind power, and renewable electricity is falling in price.

In Europe and elsewhere, such changing economics have helped drive falls in the number of hours that coal plants operate. Globally, final investment decisions for new coal plants fell from more than 100GW in 2010 to just over 20GW in 2018. Although it might take a little longer in Japan, there is no reason to expect things to be different there.

Crucially, these dynamics are underpinned by shifts in Japan’s electricity market to encourage more competition. Over time, that should mean companies find it increasingly difficult to pass the costs of expensive investments in coal technologies to final customers.

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Australia shipped more than A$9 billion dollars of thermal coal to Japan in 2019.
Dave Hunt/AAP

Dim prospects for coal

Mining company Glencore this month announced a plan to cut production from Australian coal mines, citing weak demand due to COVID-19.

The world will recover from the pandemic. But in the longer term, coal in Japan faces even stiffer headwinds – not least market competition and increasing renewables from offshore wind and other technologies.

This creates real questions about the appetite of Japanese companies to wage the increasingly risky bet that coal-fired power represents. Changes in Japan’s power market show the need for Australia to begin transiting to an economy less reliant on carbon-intensive exports.

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Llewelyn Hughes, Associate Professor of Public Policy, Crawford School of Public Policy, Australian National University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Closing Uluru to climbers is better for tourism in the long run

The Anangu people actually offer visitors a range of eco-cultural tourism activities that focus on sharing Indigenous culture, knowledge and traditions.
Leo Li/Flickr, CC BY-SA

Michelle Whitford, Griffith University and Susanne Becken, Griffith University

Closing Uluru to climbers empowers Indigenous people to teach visitors about their culture on their own terms, which is more sustainable for tourism in the long run.

Uluru is a drawcard for international and domestic tourists, and is visited by over 250,000 people per year. A substantial number of these choose to climb the rock. On busy days, the number can be in the hundreds. This is despite being asked by the traditional owners, the Anangu people, to respect their wishes, culture and law and not climb Uluru.

The Anangu people actually offer visitors a range of eco-cultural tourism activities that focus on sharing Indigenous culture, knowledge and traditions, which don’t involve planting feet on a sacred place. These activities including nature walks, painting workshops, bush yarns and bush food experiences.

This decision to close the rock to climbers comes after many years of conceding rights back to the Anangu, and is possibly one of the few times where Indigenous values have truly been prioritised over other interests.

Giving power back to Uluru’s traditional owners

The Uluru-Kata Tjuta National Park, declared in 1950, was handed back to the Anangu on October 26, 1985. While the agreement required the park to be leased to the Australian Parks and Wildlife Services under a co-management arrangement, the handover was a symbolic high point for land rights.

In practice, however, aspects of the park’s operations were contrary to the traditional owners’ approach to conservation and management. For instance, park management models stated the need to place:

… emphasis on developing acceptable patterns of use of the physical environment and not on recognition of social and spiritual values of land to Indigenous people.

In 2010, the park’s management plan proposed to close the rock if the proportion of visitors who wished to climb Uluru was below 20%. An independent analysis of track counter data and visitor statistics undertaken by the Griffith Institute for Tourism over a four year period revealed that in almost all circumstances (and even with allowance for track counter inaccuracy) the proportion was under 20%.

Finally on November 1, the Uluru-Kata Tjuta National Park Board of Management, consisting of eight traditional owners and four government officials, voted unanimously to close Uluru (Ayers Rock) to climbers. The local tourism industry supported the decision.

Indigenous tourism on the rise

Increasingly, visitors around the world are seeking such opportunities to experience various aspects of Indigenous culture. Not surprisingly, Aboriginal and Torres Strait Islander peoples are realising the sociocultural and economic opportunities of tourism and have now become an integral part of the Australian tourism industry.

But for Aboriginal and Torres Strait Islander peoples, getting involved in the tourism industry comes with its own set of problems. They have been tasked with juggling their heritage, customs, culture and traditions with government initiatives that prioritise economic over socio-cultural development. For example, as Quandamooka Dreaming “targets big dollars from tourism” in SE Queensland, the traditional owners are successfully balancing their socio-economic aspirations with cultural lores by determining that some sacred sites will remain accessible only to elders and initiated Indigenous Quandamooka people. But other sites will be open to eco-tourists.

However, too often, tourism development is associated with issues of commercialisation, lack of authenticity and exploitation of culture.

Empowering Indigenous Australians

Given the considerable pressure tourism places on local resources and places, the involvement of local communities and different groups within them is now considered critical for achieving sustainable tourism.

A recent report concludes that participation and empowerment of local communities are success factors to managing tourism growth. It’s the local community that looks after the destination, and it can make or break a tourist’s experience. The report finds developing tourism without input from the local people has often led to conflict.

Closing Uluru for climbing should be seen as a shining example of sustainable tourism being a vehicle for the preservation, maintenance and ongoing development of culture, traditions and knowledge.

And when reconciliation principles are practised not preached, traditional custodians of the land are afforded due respect. This then leads them to share their 60,000 year old knowledge of the management of the land we are privileged to utilise as tourism destinations.

Michelle Whitford, Associate Professor of Indigenous Tourism, Griffith University and Susanne Becken, Professor of Sustainable Tourism and Director, Griffith Institute for Tourism, Griffith University

This article was originally published on The Conversation. Read the original article.