Green Wombat

Australian voters on Saturday tossed out the decade-old government
of conservative Prime Minster John Howard, installing Labor Party
leader Kevin Rudd (left) as the new PM. Howard was a staunch ally of
the Bush administration on climate change, joining it in refusing to
ratify the Kyoto Accord despite — or because of — Australia’s status
as the planet’s biggest per-capita emitter of greenhouse gases.

Australia is a proverbial canary in the coal mine when it comes to
suffering the consequences of climate change, and Saturday’s election
may foreshadow how environmental issues will play out elsewhere in the
coming years. With the country
in the grip of the worst drought on record, global warming — and the
Howard government’s emu-in-the-sand stance that prompted corporate
Australia to push its own climate change agenda — became a hot
campaign topic. The Australian Labor Party’s environment spokesman,
former Midnight Oil front man Peter Garret (right) — a
rock-star-environmentalist-turned-politico — hammered the government
at every turn. Meanwhile, Rudd promised to sign Kyoto, up investment in
green technology and establish a nationwide carbon trading market to
help achieve a 60 percent reduction in greenhouse gas emissions by
2050. Labor also set a target of obtaining 20 percent of this
coal-dependent nation’s electricity from renewable sources by 2020.

Just how much Labor’s climate change policies contributed to its
landslide victory is up for debate, though such was the voters’ wrath
that it appears that even Howard will lose his seat in Parliament, the
first sitting prime minister to do so since 1929. But here’s one
indicator: The Greens scored 20 percent of the votes in some
electorates and will take as many as six seats in the Senate, possibly
giving the environmental party the balance of power in the upper house.
The Greens also contributed to the Labor landslide because under
Australia’s preferential voting system, ballots cast for unsuccessful
Green candidates were re-directed to the ALP.

So with a charismatic greenie like Garrett as Australia’s
presumptive new environment minister, Australia is about to become the
Scandinavia of the South Pacific, right? Not quite. Australia’s current
prosperity owes much to the resource boom under way as China buys up
just about any mineral that can be dug out of the ground. (See my
Fortune colleague Brian O’Keefe’s excellent story on the ire ore gold rush in Western Australia.)

Green
Wombat got a first-hand look at the pressures Rudd will face during a
visit last month to Queensland, the new PM’s home state. Driving
through central Queensland’s coal belt, a never-ending procession of
trains piled high with coal flanked the two-lane highway, running 24/7
between the mines and the port, where China-bound coal ships are
stacked up by the dozens off shore. Bulldozers scaled mountains of coal
piled on the side of the road, scooping the sooty stuff up to be put on
a conveyor belt that straddled the highway to connect to a train depot.
At the Dingo roadhouse, a big color-coded wall map charts central
Queensland’s major coal seams and Shift Miner Magazine is on sale,
chronicling the explosion in coal mining that has turned places like
Rockhampton into boom towns. Riding in from the Rockhampton airport, a
former coal miner-turned-taxi driver
tells me she rues passing up the chance a couple years’ back to buy a
house for $A10,000 in a nearby mining town; such homes now go for
$A300,000. Out on a cattle ranch about 500 kilometers from Rockhampton,
a mining company is drilling for gold but rancher John Dennis tells me
he hopes they find something else. "Black gold," he says. "Coal." (The
biggest corporate takeover attempt now under way Down Under is Aussie
mining giant BHP Billiton (BHP)’s $150 billion offer for rival Rio
Tinto (RTP).)

So no surprise that Rudd wants to spend $A500 million on so-called
clean coal technology to capture and store greenhouse gas emissions
from coal-fired power plants. While sun-drenched Australia has some of
the world’s best solar resource it currently gets about 86 percent of
its electricity from coal-fired power plants. In fact, in recent years,
Australian solar energy companies like Ausra
have relocated to California, frustrated by the government’s lack of
support for renewable energy. But with the new Labor government
pledging to fund a $A150 million Energy Innovation Fund to stop the
brain drain as well as increase the mandatory renewable energy targets,
Australia may be the next frontier for green business.