It's about time...

[HiEquity]

That someone started talking some sense on Climate Change policy...

http://www.abc.net.au/unleashed/45244.html

And to think it would have come from our Prime Minister!

I'm beginning to actually hope that she may well be able to get this done. She is right that history judges harshly those caught on the wrong side of the facts... not to mention those with blatantly illogical policies such as the Coalition's Climate Change policy right now.

It seems that for meaningful reform to occur we may require a minority government, as nothing much has actually happened in the way of real reform in the ten years since the GST, from both sides enjoying majority government. Got too comfortable - they only start taking worthwhile risks when they're forced to live on the edge...

This has just made my day!

 

[Dazz]

.....perhaps it best, before you go too far down this track, to declare a little self-interest....

 

[dan c]

... not to mention those with blatantly illogical policies such as the Coalition's Climate Change policy right now.

Don't worry, Mr Abbott will change his mind again in the next day or so...

 

[HiEquity]

.....perhaps it best, before you go too far down this track, to declare a little self-interest....

On the contrary Dazz, I don't have any self interest in this debate. Most of my work is for the renewable energy industry, which actually has nothing to gain from carbon pricing below about $50/tonne (nowhere near the numbers being bandied about ATM). For us, a price on carbon merely acts to reduce the price of renewable energy certificates under the Renewable Energy Target (RET). The RET still sets the volume of renewable energy deployment across Australia.

In the electricity sector a carbon price of the order being talked about acts to:
- shift generation from coal to gas; and
- reduce demand
...neither of which I have any self interest in. There are of course a couple of other things but in the interests of brevity...

It is however interesting to note that in the current WA electricity market for example, a carbon price around $20/tonne increases electricity prices to residential customers by less than the GST currently imposes. I don't remember the sky falling in when the GST was introduced...

Which probably means not a lot will happen on the reduction of residential demand - industry will be more sensitive but they also have far more options to do something about their level of demand, through a myriad of energy efficiency options.

 

[Witzl]

if you have actaully been to China, then you would know that this exerpt is a load of rubbish and political hot-air

China is closing environmentally-damaging, unsafe and economically inefficient small coal-fired generators at the rate of one every one or two weeks and replacing them with larger plants that are economically and environmentally much more efficient. They are putting up wind turbines at the rate of one every hour. China has also set its own ambitious target of reducing carbon pollution by 40 to 45 per cent per unit of GDP by 2020.

Here's why:

• small size coal power stations are now unable to keep up with the extremely high growth in power demands in China. Hence they are closing them down and replacing them with significantly larger coal fired power stations. It's not a case of closing down 4 small power stations and replacing them with 1 equivalently sized large station which is more efficient, they are closing down those 4 and replacing them with 4 much larger power stations!! All you have to do is look at China's coal mining industry and import volumes to see the truth - they are burning coal at an ever increasing rate.
• Stating that a coal fired power station is more "environmentally efficient" is like saying that aids is heathier than bowel cancer. They both are horribly nasty, one is just a little nastier than the other
• Yes, China is putting up wind turbines at 1 every hour.... but they are just those "token" ~300Watt wind turbines for street lights.... and trust me, after 3 months in the chinese atomsphere, they dont work any more. I've seen this first hand. Furthermore, in the locations they install them, there is buggerall wind.
• Yes, the target of reducing carbon emissions by 40-45% per unit of GDP is quite ambitious.... but lets look at those numbers! China's current rate of GPD growth is around 8-9%pa, so if that growth continues, in 9 years from now GDP will be ~217% of what it is today.... so to reduce by 40% per unit of GDP would actually represent a 30% INCREASE on carbon emissions from today. Clever maths huh?? For a relatively stagnant population, that is a massive increase in emissions per capita!!

As for the rest of the article... yeah ok she is making good argument for her case, but i feel that some of her conclusions are wrong, and i would like some more details on a few things.

Such as:

• what is a clean energy economy? How does she hope to achieve this whilst something like ~70% of our energy is sourced from burning coal (quite possible the "dirtiest" method to generate energy)?
• How does a carbon tax, or an emissions trading scheme, really serve to reduce carbon emissions, when such carbon emissions are produced on the back of such basic necessities as agriculture, electricity and transportation? Do we need to eat less, use less electricity and transport ourselves less?

If Gillard were SERIOUS about reducing carbon emissions, and did want to introduce a carbon tax.... she would be far wiser and truer to her word if she simultaneously annouced radical changes to the method of energy production in Australia.

When >70% of our C02 emissions are coming from electricity generation, why would you simply increase the cost of electricity to the end user (the humble consumer), without offering a VIABLE alternative?

Queue pro-nuclear argument.

 

[Aaron Sice]

i'm worried about two things.

1) the derivatives market making an equity out of carbon
2) the increased cost of personal movement.

 

[handyandy]

Good place to insert a link to the 'no carbon tax rally site'

http://www.nocarbontaxrally.com/no_carbon_tax_rally.html

Its good to see that HiEquity hasn't changed his tune, like the Prime Minister.

Cheers

 

[HiEquity]

Sigh...

if you have actaully been to China, then you would know that this exerpt is a load of rubbish and political hot-air

I have spent a fair bit of time around Chinese wind farms and would disagree with that statement.

[*]small size coal power stations are now unable to keep up with the extremely high growth in power demands in China. Hence they are closing them down and replacing them with significantly larger coal fired power stations.

This makes no sense. If they were struggling to keep up with demand they would be keeping all their existing power stations as well as building new and bigger ones. They are decommissioning small, inefficient power stations because they need to use the thermal coal they have far more efficiently than they have in the past as they realise it's a finite resource and getting more expensive to extract and transport. They want to avoid importing thermal coal for as long as possible, so using coal more efficiently is the fundamental aim.

It's not a case of closing down 4 small power stations and replacing them with 1 equivalently sized large station which is more efficient, they are closing down those 4 and replacing them with 4 much larger power stations!!

Agreed that the Chinese are building far more capacity than they are decommissioning but the new plant is usually at least twice as efficient as the old stuff, for a number of reasons I won't bore everyone with here...

All you have to do is look at China's coal mining industry and import volumes to see the truth - they are burning coal at an ever increasing rate.

Agreed, demand growing faster than efficiency is improving = burn more coal.

[*]Stating that a coal fired power station is more "environmentally efficient" is like saying that aids is heathier than bowel cancer. They both are horribly nasty, one is just a little nastier than the other

True but at least they are doing something right - our incredibly inefficient old power stations in the Latrobe valley just keep chugging along instead. Perhaps we should focus on what we can do rather than expecting the country trying to pick it's population out of abject poverty to do everything?

[*]Yes, China is putting up wind turbines at 1 every hour.... but they are just those "token" ~300Watt wind turbines for street lights.... and trust me, after 3 months in the chinese atomsphere, they dont work any more. I've seen this first hand. Furthermore, in the locations they install them, there is buggerall wind.

Rubbish. Julia's statement hangs together with my own knowledge of the Chinese large scale wind turbine market (>1.5MW), where around 15-20GW of turbines got installed last year. Capex of that magnitude gets looked after - the turbines work and last. The wind resource isn't as good as our own (some of the world's best) but to me that's more a reflection on us than on their sterling efforts.

[*]Yes, the target of reducing carbon emissions by 40-45% per unit of GDP is quite ambitious.... but lets look at those numbers! China's current rate of GPD growth is around 8-9%pa, so if that growth continues, in 9 years from now GDP will be ~217% of what it is today.... so to reduce by 40% per unit of GDP would actually represent a 30% INCREASE on carbon emissions from today. Clever maths huh?? For a relatively stagnant population, that is a massive increase in emissions per capita!!

To still get nowhere near our own emissions per capita??? Perhaps we should be focussing on our own mess?

[*]what is a clean energy economy? How does she hope to achieve this whilst something like ~70% of our energy is sourced from burning coal (quite possible the "dirtiest" method to generate energy)?

A carbon price provides the mechanism for the power industry to switch from coal to gas. And 70% is too high a number for coal right now.

Do we need to eat less, use less electricity and transport ourselves less?

Yes - a carbon price works by switching fuels to less carbon intensive ones, reducing demand for carbon intensive goods and services, which are incredibly cheap at the moment. There is nothing wrong with doing less unnecessary stuff, although the impost on personal movement is likely to be pretty negligible at the numbers being talked about.

If Gillard were SERIOUS about reducing carbon emissions, and did want to introduce a carbon tax.... she would be far wiser and truer to her word if she simultaneously annouced radical changes to the method of energy production in Australia.

How best to make those changes when a competitive market, not governments, provides us with power? You guessed it - provide a carbon price signal to the market so they can work out the best way of reducing emissions. This is exactly what a carbon price does - it changes the methods of energy production in Australia.

When >70% of our C02 emissions are coming from electricity generation, why would you simply increase the cost of electricity to the end user (the humble consumer), without offering a VIABLE alternative?

It's not 70% - stationary energy is 50% of our emissions. The viable alternatives include using gas instead of coal, installing insulation, switching things off at the wall etc etc. We just want to reduce our emissions - the policy aim isn't to stop emissions altogether as that would be too expensive (as in the example of nuclear).

 

[Witzl]

totally agree that we should all be doing our part to reduce energy consumption - myself i've already managed to reduce my household average power consumption from 13kWh/day to around 10-11kWh/day, simply by identifying appliances with large standby consumption and switching them off, replacing halogen downlights in frequently illuminated areas with LED downlights (living room, hallways, etc), and turning off the beer fridge in the garage (only using it when i have a party now).
I also only use aircon when i REALLY need it - otherwise a fan, open doors and windows and feel the breeze.

Im sure that there are soooo many other households that could save even more elecricity with such simple methods as i have done.

As they say - the greenest watt is the one you dont have to generate.

How best to make those changes when a competitive market, not governments, provides us with power? You guessed it - provide a carbon price signal to the market so they can work out the best way of reducing emissions. This is exactly what a carbon price does - it changes the methods of energy production in Australia.

Yes, it does.... but if the govt were truly serious about this, they would open up the other option - nuclear.

Gas is better than coal, yes, but its still pretty bad on the CO2 emissions. Eventually, carbon tax would rise, and even gas would be uneconomical.

Yes - a carbon price works by switching fuels to less carbon intensive ones, reducing demand for carbon intensive goods and services, which are incredibly cheap at the moment. There is nothing wrong with doing less unnecessary stuff, although the impost on personal movement is likely to be pretty negligible at the numbers being talked about.

OK cool, in theory I agree that it does work.... but what are the alternative less carbon intensive solutions for food and agriculture? Breed cows that dont emit methane (seriously, i dont know the answer)?

What about transport - cant really do too much there for logistical transport i would think, as there arent that many lower carbon emitting options. Biofuels still emit CO2, and at the same time rob us of land to grow food for consumption. Yes i agree with fuel efficiency requirements for cars to be improved, but how much effect does that really have? Public transport would be awesome... but we all know how well thats going in sydney!!

As for electricity generation.... yes, the theory goes that by increasing the cost of high carbon emission generation it will force the switch to lower emission options..... but as the end user of electricity, i will be the one paying for it - and how do i get a say in how my electricity is generated??

That is the choice that the electricity generators get to make - and at the moment their choices are:
- coal (high Co2)
- gas (slightly less, but still a lot of CO2)
- wind (requires too much land to be a majority generation method, but still a good ancilliary method IMO)
- solar (expensive)
- hydro (we dont have enough water as it is)

To me the big one missing there is Nuclear. Instead of building a gas turbine, or a new coal station... build nuclear. Fuel prices are stable, and generation costs are pretty stable. Carbon emissions are near zero. Australia is a geologically VERY stable country, and we have a lot of the necessary fuel.... so why dont we honestly look at this option?


Just cos some people are scared of the nuclear boogeyman.



P.S. sorry i havent responded to your other points.... only limited time to post and not enough time to respond in full.

 

[HiEquity]

OK cool, in theory I agree that it does work.... but what are the alternative less carbon intensive solutions for food and agriculture? Breed cows that dont emit methane (seriously, i dont know the answer)?

Agriculture is likely to be excluded again because of this. If it weren't, we could probably use an economic incentive to eat less meat, going by the nation's waistlines...

What about transport - cant really do too much there for logistical transport i would think, as there arent that many lower carbon emitting options. Biofuels still emit CO2, and at the same time rob us of land to grow food for consumption. Yes i agree with fuel efficiency requirements for cars to be improved, but how much effect does that really have? Public transport would be awesome... but we all know how well thats going in sydney!!

Again, a reduction in trips and increase in efficiency of vehicles is all that's being called for out of this measure, which is a pretty good start. Apart from that, public transport is required in a more serious way but the Commonwealth has no jurisdiction over it. The States have to get their own acts together.

And yes it would be nice if govts invested in public transport in places other than WA...

As for electricity generation.... yes, the theory goes that by increasing the cost of high carbon emission generation it will force the switch to lower emission options..... but as the end user of electricity, i will be the one paying for it - and how do i get a say in how my electricity is generated??

Well, you can buy whatever % you like of renewable electricity now, or buy carbon neutral electricity if you so desire. Apart from that, if you just want the black stuff then you will have just as much say as you have now = zero. It's a competitive electricity market out there and only the cheapest producers survive. You can't expect to have any influence on what the cheapest options actually are if you're not prepared to pay for the premium to pick and choose.

That is the choice that the electricity generators get to make - and at the moment their choices are:
- coal (high Co2)
- gas (slightly less, but still a lot of CO2)
- wind (requires too much land to be a majority generation method, but still a good ancilliary method IMO)
- solar (expensive)
- hydro (we dont have enough water as it is)

Well wind supplies over 50% of the stationary energy requirements of many islanded towns in WA at the moment, for example so it can be a "majority generation method" if planned for. It's main problem is cost although the premium isn't particularly large - without the Renewable Energy Target it wouldn't exist in Australia.

BTW, a combined cycle gas turbine power station has less than one third of the emissions of a Latrobe Valley coal generator - it's a lot more of a difference in emissions than just "slightly less". It actually goes an awful long way towards solving the problem at low cost...

To me the big one missing there is Nuclear. Instead of building a gas turbine, or a new coal station... build nuclear. Fuel prices are stable, and generation costs are pretty stable. Carbon emissions are near zero. Australia is a geologically VERY stable country, and we have a lot of the necessary fuel.... so why dont we honestly look at this option?

Agreed - generation costs for nuclear are stable at the "extreme" end of the range for us - much higher than a modern wind farm in an Australian wind resource for example. In countries paying 2-3 times the price for electricity than we are, with no alternatives, it becomes competitive but for us it just doesn't make any commercial sense whatsoever.

I don't know where you get the information from that we haven't honestly looked at nuclear. People in my industry keep up to date with it all the time. One problem is that no-one has ever built a privately financed nuclear power station anywhere in the world - there has always been a govt guarantee sitting behind them somewhere to take all the actual risk.

In a capital intensive technology such as nuclear, a govt guarantee artificially drops the cost of capital and therefore the cost of generation significantly. The introduction of realistic interest rates on nuclear power station capital costs just blows generation costs out of the water. It makes a $60 per tonne price on carbon look like chicken feed. That's why no-one in the power industry is suggesting nuclear...

Your comment about the political debate though is correct - more focussed on shallow symbolism than rational argument. The ironic thing is that people are hungry for this type of information but companies in the power industry can't say anything for fear of appearing to be acting politically. But you would have noticed the distinct lack of power companies actually asking for the ability to build a nuclear power station in Australia - everyone knows that debate is a bum steer.

 

[Ausprop]

I can cut carbon emissions without any immediate cost to the end user - close the coal mines.

can labor do anything without creating some inefficient industry around it? stumulous plans, carbon taxes, insulation rebates - I feel sick

Australia is a tiny cog in the world machine. Thumping our economy on the head will make no difference to global warming, be it real or not. We CAN control the respurces other countries consume from us, so it woul dbe logical to suicide our gas and coal industries. but that is not palatable. so they chose a softer option. It's all about gutless politics pandering to minority interests and once again we will all pay. The Chinese must be either laughing or very confused.

 

[lizzie]

i was disgusted to hear the latest carrot being dangled by the government, to make the carbon tax more palatable to the masses ... the extra tax raised would allow them to reduce income tax!!

wtf? if they are taxing for the sake of climate change, then use the damned money in research or investment in sustainable energy!

they lost any credibility as to their motives at that moment.

 

[weg]

i was disgusted to hear the latest carrot being dangled by the government, to make the carbon tax more palatable to the masses ... the extra tax raised would allow them to reduce income tax!!

wtf? if they are taxing for the sake of climate change, then use the damned money in research or investment in sustainable energy!

they lost any credibility as to their motives at that moment.

Agree, and even IF Julia was right, with her (and her and Rudds) track record of one disaster after the other, what are the chances of her getting it only half right?

 

[Aaron Sice]

i like how this thread glosses over my points just like QandA, Insight, 7:30 report, Bob Brown, Rob Oakeshott, Sunrise and Julia Gillard have.

seems all too much to take in, really. ah well. time to drag out my eSignal subscription.

 

[Ausprop]

i'm worried about two things.

1) the derivatives market making an equity out of carbon
2) the increased cost of personal movement.

Here you go BC, I'll acknowledge your post. I share your worries and more,

3) declining standard of living
4) less competitiviness
5) exportation of dirty industries to less stricter countries
6) misallocation of resources
7) trust in Gillard after breakign a key election promise
8) labor's track record for stuffing these programs up
9) impact on our exchange rate
10) more mortgage stress thru increased house prices

that rounds it to 10, I could probably make a list of 50?

 

[BayView]

That someone started talking some sense on Climate Change policy...

http://www.abc.net.au/unleashed/45244.html

And to think it would have come from our Prime Minister!

I'm beginning to actually hope that she may well be able to get this done. She is right that history judges harshly those caught on the wrong side of the facts... not to mention those with blatantly illogical policies such as the Coalition's Climate Change policy right now.

It seems that for meaningful reform to occur we may require a minority government, as nothing much has actually happened in the way of real reform in the ten years since the GST, from both sides enjoying majority government. Got too comfortable - they only start taking worthwhile risks when they're forced to live on the edge...

This has just made my day!

Here's my uneducated take on us humans causing anything ( except for maybe emptying the sea of fish);

I went to the Grand Canyon whilst living in the USA.

It is the biggest goddamn thing you have ever seen. I looked through my video camera viewfinder at a track about halfway down to the bottom.

I then zoomed in on that track, and saw a few humans on donkeys! I couldn't believe it - they were invisible to the naked eye - let's remember they were only HALFWAY DOWN to the bottom.

Fast forward to the flight back to L.A.

We flew over the G.C at an altitude of 30,000 feet.

It looked like a piece of cotton on the ground.

So, if something THAT big is merely a little crack in the earth from up above, then we humans are but myopic microbs on a dog's @rse, and have no sway in what the Earth has in store for the future.

We need to get over ourselves as an importance.

 

[HiEquity]

I can cut carbon emissions without any immediate cost to the end user - close the coal mines.

If the government owned them that might be realistic. However, given that they're privately owned, there may be a number of coal mine owners a tad upset by that strategy. Sovereign risk anyone? Not a realistic option for govts IMO - they would justifiably be blasted. Compulsory acquisition would have to be the path but that would cost an awful lot of $$$$s in compensation... ripped straight out of the budget to line the pockets of coal mine owners. That may not be a good look...

i was disgusted to hear the latest carrot being dangled by the government, to make the carbon tax more palatable to the masses ... the extra tax raised would allow them to reduce income tax!!

Hi lizzie, the idea is quite simple - instead of taxing "goods" like personal income (which we all want more of, right?), we should be taxing "bads" like damage to the environment.

That way we give people more incentive to earn more via working hard and more incentive to pollute less, all at the same time. Pretty sensible and credible in my view.

i like how this thread glosses over my points just like QandA, Insight, 7:30 report, Bob Brown, Rob Oakeshott, Sunrise and Julia Gillard have.

seems all too much to take in, really. ah well. time to drag out my eSignal subscription.

These points?

i'm worried about two things.

1) the derivatives market making an equity out of carbon
2) the increased cost of personal movement.

1) This is why I prefer a carbon tax to an ETS but ultimately both are still preferable to no price on carbon. Derivatives apply to everything else after all so why not carbon? They don't seem to impact much on the price of oil, copper, steel, gold, equities etc etc etc after all.
2) If you use public transport - negligible. If you drive cars, then you should pay a bit more for your fuel but it's not that much as petrol and gas just aren't that carbon intensive. Transport emissions are only around 20% of total emissions anyway, so there just isn't that much to take from that part of the pie. Most of that will be taken from "non personal" transport anyway. Increasing logistics transport costs should help us reduce our tendency to ship the latest junk from China all over the country. Airfare costs will go up but nowhere near to the extent that they have come down over the last decade. Did I miss anything? The cost of riding my bike to work in the morning won't change...

 

[HiEquity]

We need to get over ourselves as an importance.

Fair enough. The steady rise in atmospherice CO2 concentrations since the industrial revolution must be just a coincidence I guess...

We'll do nothing then - just in case every credible science organisation in the world is wrong.

 

[Ausprop]

If the government owned them that might be realistic. However, given that they're privately owned, there may be a number of coal mine owners a tad upset by that strategy. Sovereign risk anyone? Not a realistic option for govts IMO - they would justifiably be blasted. Compulsory acquisition would have to be the path but that would cost an awful lot of $$$$s in compensation... ripped straight out of the budget to line the pockets of coal mine owners. That may not be a good look...

just put a horrendous tax on coal exports. no sovereign risk. The Chinese can pay, gillard has both hands and more in my pockets already. seriously enough is enough, there is only so much money to address her xmas wish list with

 

[Ausprop]

Fair enough. The steady rise in atmospherice CO2 concentrations since the industrial revolution must be just a coincidence I guess...

We'll do nothing then - just in case every credible science organisation in the world is wrong.

they were re the coming ice age? populism is a dangerous animal. mind you there are many that believe (and again it is gaining more traction) that the earth is cooling