2 cheers (1 blood oath) for climate law
It was a couple of years later than it needed be, and about an hour later than the organisers hoped, but the passing of the Clean Energy Future package by the Senate on Tuesday could hardly have been better timed for the 850 or so delegates to the Carbon Expo forum in Melbourne.
Some 20 years after climate change first became a serious public policy issue, after some 35 different policy reviews, several aborted attempts, a trail of political victims and some harsh words both in and out of parliament, the Senate gave its approval to a carbon price by a handful of votes.
There were cheers in the Senate, but a muted reception at the expo, possibly because most had left the giant screen relaying the proceedings of the Senate to tuck in to lunch. “I can’t quite believe it has actually happened,” said one lawyer who had been working on legislative drafts for the best part of a decade. But, as one banker lamented, some uncertainty has simply been replaced by more uncertainty: the question posed by his customers, which up to now has been “will the legislation be passed?” will simply be replaced with “will the legislation be repealed?”
The passage of the legislation does have one important political dynamic: the onus of the government to justify and explain its legislation is now passed to the Opposition, which has been campaigning on a platform of “no, no, no,” underlined by Abbott's extraordinary blood oath to repeal it. It was quickly the focus of the leading business types invited to speak at the expo.
Michael Fraser, the CEO of AGL Energy, described the “Abbott factor” as “very unfortunate”. For AGL it meant that any decisions made on certain investments, such as the baseload gas generation that most say is crucial to transition one of the world’s dirtiest economies to a cleaner future, will be deferred. “We will proceed with caution,” Fraser told the audience. “We want to see bipartisan agreement.”
And, he warned, energy prices would not fall as the Opposition claimed they would, should the carbon price be repealed. In that situation, they would likely go even higher. “When I look at the fundamentals, energy prices are going to rise.”
Steve Sargent, the CEO of GE Australia, the local branch of the world’s biggest industrial conglomerate, said the political situation was “disappointing,” particularly when both sides of parliament had identical climate policies, at least as far as the crucial emissions reduction target was concerned. “We should have been debating what we were going to do and how we going to get there,” he said.
The federal government insists that Tony Abbott’s threat to repeal the legislation is simply hot air. It’s not that it can’t be done, at least in theory, said Mark Dreyfus, the parliamentary secretary for climate change, it’s that it won’t be, for political reasons. “This legislation will not be repealed. It’s a hollow promise,” he told the audience.
In the meantime, big business seemed mostly happy and enthusiastic about the arrival of a carbon price. “There are a whole lot of business that don’t exist today that are going to emerge,” Fraser said. “We certainly see lots of opportunities.” GE, which has been pricing carbon on its own internal models for nearly a decade, also saw lots of opportunities. And Sargent noted, citing new engine models GE had delivered for the Qantas fleet: new technologies could deliver both lower operating costs and lower emissions. “It’s very doable,” he said.
One of the areas of concern was about the price of carbon, not so much that it was set so high in comparison to the current European price (it is currently about double) – as both AGL and Delta pointed out, to achieve transition to gas in short term will need a price far higher than $23 a tonne - but that it was set at all. “The quicker the transition to a market price, the better, said Santos CEO David Knox. “We already take on oil price risk, gas price risk. Now we will have carbon price risk. We will just model this into our business plans.”
Knox said Australia now had a fantastic opportunity to drive down emissions, with a “clever” combination of gas and renewables, that could reduce Australia’s emissions intensity by more than half to 0.4t/MWh, and make local industry competitive and the economy an attractive place to invest.
But Steve Everett from Delta was still hopeful for a role for coal, saying “remnants” of the industry would be needed to provide centralised power stations. He even expected coal-fired power stations to be built in various “pockets” such as in Western Australia, and possibly even along the east coast if carbon capture and storage could prove its worth.
Knox said that would be possible, but not easy. The huge transport costs of CO2 to be sequestered meant that CCS was “very unlikely to solve the problem,” unless the coal-fired plant and the tanks to sequester the emissions were close together. Coal seam gas, which Santos exploits, still has its own issues. Knox said concerns about entry to the farm gate and its impact on aquifers needed to be addressed properly. Indeed, he said, the industry needed to aim to “jump high” on these issues, rather than engage in limbo dancing.
Most people would be hoping for some of the same from the Opposition on climate policy. But it may take a while.
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The federal government
The federal government insists that Tony Abbott’s threat to repeal the legislation is simply hot air. It’s not that it can’t be done, at least in theory, said Mark Dreyfus, the parliamentary secretary for climate change, it’s that it won’t be, for political reasons. “This legislation will not be repealed. It’s a hollow promise,” he told the audience. used disk space
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It was a couple of years
It was a couple of years later than it needed be, and about an hour later than the organisers hoped, but the passing of the Clean Energy Future package by the Senate on Tuesday could hardly have been better timed for the 850 or so delegates to the Carbon Expo forum in Melbourne. Part Time Jobs in Ohio
The only catch is "recirculation into clean technologies etc"
The vast majority of the money collected either by the 3 year carbon tax or the ETS component is going nowehere near clean technologies. The vast majority of it is going into either industry or household compensation. These are long term compensation costs. Even the shutting down of brown coal generation in Victoria will mean giving the generator money to shut down not to build a new generation resource.
Economists' supported ETS is flawed
Companies are allowed to acquired 50% of permits from dubious traders abroad, meaning that those funds are passed on to retail consumers but do absolutely nothing to enhance clean technologies
Worry about the actions of the Current govt
Not afraid of promises .. we know what they are worth. Just afraid of what is now in legislation and what the track record of the current team actually is.
We know that the big expenditure in electricity will be on distribution in the next decade not so much on generation.
Just can't wear the pink batt colourde glasses that you obviously do.
Carbon tax vs ETS
To be fair, there are two generally accepted theories about how best to put a price on carbon and recirculate the money into clean technologies and carbon capture. One is a fixed tax on emissions, the funds from which are then spent on clean energy and carbon capture etc. The other is a cap and trade or ETS, where permits to pollute are auctioned and can be traded. The latter has more support from economists as the most efficient mechanism, and support from environmentalists because it includes a cap, which a pure emissions tax does not. While technically an ETS is a tax, the two mechanisms of pricing pollution are different enough that it is fair for a politician to distinguish between which they support.
Fair enough, I shan't.
Stick to fairy tales.but the passage of time will tell.
What nonsense - the best lies start with a revision of history
In response to Vasso Massonic:
I didn't say she was lazy, I said her remark was lazy simply because it isn't a price on carbon, it is a price on injecting CO2 into the atmosphere.
The Greens blocked the ETS that was agreed between Labor and the Turnbull led Opposition.
Rudd never abandoned an ETS, he just said that it couldn't be implemented until 2012 or 2013. He said that with it being only a year until the next election, he would not call a double dissolution. After the next election, the process would have to start again.
Because he was so honest, he allowed the media and the Opposition to take control of the debate. He (and we) would have been better off, if he hadn't mentioned the new timetable, despite it being obvious. He should have just said that we'll have to wait until the next election, and that the delay was the result of both Abott's and Brown's intransigence.
Rudd was upset by the legislation being blocked, and let this emotion spoil the message. He handled the super profits tax abysmally as well. The electorate turned on him.
Gillard stated that she would introduce an ETS if elected.
Because the media had swallowed the "an ETS is not a tax" line, allowed her to play the same stupid game.
With a hung parliament she was forced into this "fixed price for a few years" compromise.
Never second my views please - they'll never be the same as yours.
Vasso Massonic - at it again, Responding
Julia Gillard is not lazy, she's the most calculating lady I came across and her every move is that of an accomplished chess player.
She talked Rudd into abandoning the ETS prior to Copenhagen then, insinuating he lost his way, took the helm.
Sensed that the ETS / Carbon Tax melange was taboo with the electorate during the hustings, uttered "there will be no carbon tax in a government I lead - and she meant it.
Sadly for her, she did not make the grade. Bob Brown was happy to oblige and she went along with being a PM of straw and will be haunted by Milne's agenda of turning our back an fossil fuel and $23 per tonne is only the begining.
I second your view that two years from now the situation will be very much worse given the half baked trifecta- NBN, Carbon Tax & Boat Souls in dissaray.
All this sounds like a fairy tale, but it's a precis on Australia today.
Vasso Massonic - at it again
In rsponse to vasso Massonic:
Stamp duties, customs duties, leases, rents, licences, royalties, an ETS, and the levies imposed under this bill are all taxes.
We get it Vasso.
The man you admire so much, Tony Abbot, has never stated that an ETS is not a tax. If he did, I somehow missed it.
Nonetheless he supported an ETS when in the Howard cabinet prior to the 2007 election.
Apparently that "tax" is somehow so different from the one just passed, that Tony can get all fired up with self-righteous rage over it. The man is a liar - and not even a good one.
It is nonsense of course; other than having a fixed price for a couple of years, there is little difference.
For Julia Gillard to state that we are putting a price on carbon is, at worst, lazy. She means that injecting CO2 into the atmosphere now has a price, for 500 Austalian companies. Before it was free.
Well Vasso, you'll have your man in the Prime Ministership in two years from now. Lets hope he is less destructive for the country in government, as he is in opposition; unfortunately I fear he'll be much worse.
Matt Robinson, I call you prudent not naive.
It is a tax by any stretch of the imagination. Albeit, Julia changed tack and now calls it a price but displays naivety by saying the carbon price would have only a third of the price impact of the GST which is a Goods and Sevices Tax that, clearly, will disadvantage Australian industry.
The Coming Referendum
Roll on the next election - the Carbon Tax is only a temporary setback for Australia.
Pink Batts
In response to Rod Hall:
The changes that will occur initially will be by the generators.
Using brown coal will become more expensive, gas less expensive. Upgrading plants to use a larger temperature cycle to increase their Carnot efficiency becomes relatively less expensive. Building a wind farm, already not very expensive, becomes relatively cheaper.
Given that our electricity prices are currently dominated by the capital costs of upgrading our distribution networks, means that we as consumers will not see much impact from the decisions being made by the generators.
In later years, as the true "cost" of fuel increases, the consumers in Sydney may find, for example, that bananas grown in Coffs Harbour are cheaper than those from Nth Queensland. Maybe the Coffs region may become a major banana producer again?
If you're frightened by the waste of tax dollars by the Clean Energy Fund, why do you not mention the enormous amounts of money that the Coalition intends to hand out to generators and farmers et al, to implement its 5% reduction plan. Can you imagine how many public servants will be needed to assess each CO2 saving project; each farmer's claims about how many trees they've planted. And each project to be directly funded by tax dollars.
The fact that you ignore this shows your true colours Rod.
By all means vote for the Coalition if you are more comfortable with doing so, but repeating bits of their spin, as though it reflects your own thoughts, is fraudulent.
Carbon price voted in: What's next
I am so glad this is through the senate. It is long overdue. I am a convert and was never really interested in the climate debete. However I have voted labor all my life and I have kept the faith. we will see some great changes for the better in the future due to this bill.
why unfair, why a stunt?
In response to Matt Robinson:
You are entitled to your opinions Matt, I just dont understand the premises.
You say it is a tax, not a "price". Of course you are right - but so is an ETS, its just that in the latter the price is arrived at from an auction. What I dont understand is how the Coalition has managed to palm off the latter, which they did support as "not a tax". That has taken a lot of help from the media.
Why is it unfair? Unfair to whom? Surely if companies welcome it, then it means it is fair. Personally I think it is unfair simply because it isn't taxing all injection of CO2 into the atmosphere.
Governments sell licences to commercial interests who wish to broadcast TV and radio signals. EM bandwidth is a scarce resource, and it does have a value. Licences are auctioned, and sold to the highest bidder. This is like an ETS. What we have are fixed price licences for the first couple of years, which will phase into an auction system later. What is unfair about that?
There seems little difference between what has been passed and an ETS, and in a couple of years, it will be an ETS. So why is it a "stunt"? It is about as close to what both Howard and Rudd were offering in the lead up to the 2007 election as one could get, given this tied parliament.
Methinks thou doth protest too much.
Three Cheers For .. ?
The "wealthy" will just wear the tax or rearrange their trusts/tax shelters/impuaution credits etc.
The "poor" will be compensated so little motivation to change consumption .. and anywat they are not the people buying a Prius of European small engine diesel. Whoops .. petrol isn't in anyway so scratch that.
If we are to believe the treasurer the impact on prices will be miniscule. So we are not going to notice it at a household level anyway.
The brown coal generators will be rewarded. The black coal generators will pass on 70% of the carbon tax to users as price increases. So impact on their businesses will be about reducing costs ... staff reductions maybe?
Sequestration is out ... so all of those big emitters will just be pumping into the atmosphere.
Gas is the most economical solution .. less emissions but still lots of emissions.
A few thousand new bureaucrats in the ACT (assume that really puts up emissions). Plus a few thousand traders in finance to produce a really clever derivatives package involving carbon trading futures. Free market at work!
So what is going to change in 3 or 5 years with the current scheme?
The Clean energy fund will enable some economically irrational energy projects to get up. But really we might throw all of this at 5KW PV systems for a million households.
This really would be a "stimulus plan" with a triple bottom line.
Waiting for the usual "unintended consequences" of yet another major environmental initiative. Can anyone else smell pink batts burning?
Thorium
Matt Robinson, don't expect any money for LFTR from this country. You have to head for India for that. They have a strong vested interest in energy security - as well as reducing emissions.
http://www.thehindu.com/opinion/op-ed/article2601471.ece
But you are spot on. We are not going to reach our 80% reduction in GHGs by 2050 domestically without nuclear power. That's the next battle front in this country that the Greens seem unable to understand.
I still don't see the benefit
I am strongly against this carbon tax (yes I see it as a tax, not a price, because it is government-imposed). I don't see it as fair, and I see it as a complicated political stunt to appease the Greens.
Call me naive, but I am hugely sceptical of any tax welcomed by the very corporations it's targeted against. These companies don't have any solutions to climate change or global warming, and never intend to have any. It is all basically B.S. No one has proved to my satisfaction that anything good will come of this.
Finally, no green energy policy is complete without including nuclear power in the mix. Especially as there is at least one perfectly safe alternative - the Liquid Fluoride Thorium Reactor (LFTR). It needs funding for commercialization just as much as the other green energies, but is a REAL solution that will provide base-load power with no emissions. If I see equal funding for this technology coming out this carbon tax, then I see some benefit.
Right now, it's just a way for energy companies to screw more money out of the Australian tax payer to fund their own agendas - which are more about making money than green energy.
Not so fast, Richard
Al Gore's right-hand man has hailed Labor's carbon tax victory in the Australian parliament. Pity, though that the US is a decade away from carbon action which lumbers Australia with the hard yards to carbon neutrality,
In the current economic climate, we are more likely to run out of funds before we make a serious dent in global emissions - Hold the champers.
where's the blood pledge?
Giles, please ask Mr No when we can see the blood pledge. He has said we can only trust him on policy when it's written down. Or has he already given the original to Mephistopheles? He's the only entity I know who demands contracts in blood. As a trainee Catholic priest, Action Man Tony must have come across him at some point.
Beat, I'm astonished by your vitriol given your 'green' credentials on LinkedIn etc. Is this a case of the great (as you see yourself) being the enemy of the good?
Alistair Clark, "politics is the art of the possible" is the quote you're after. We've got a carbon price, not a tax. It will change, just like the excise on my beer and cigarettes has gone up every year since Moses was a pup.
Peter Baker, I agree with one thing you've said. This is not the most rational way to price carbon. Price the coal at the mine-head, not the power station, that way we'll earn an extra shekel for our (non-renewable) rocks. Our super-efficient minerals sector is killing the rest of the economy through Dutch disease - e.g. driving up the dollar and distorting wages, which makes relatively sustainable sectors like tourism and education uncompetitive, not to mention retail.
Martin Nicholson, you're quite right, we've already passed the 2 degree mark.
About time
Hip hip hooray!!!
Federal governments aren't state governments
In response to David Vaughan:
The Ballieu government in Victoria will do everything it can to frustrate any conversion of its electricity generation to cleaner technologies.
Their motives would appear to be ideological given the clever way that they have made building new windmills in the state almost impossible. A great lesson on how to impose a ban, without actually stating it.
I'm not sure what the Federal government can do about that, but the blame for inaction must lie with that State government, not Federal parliament.