Posted by spoonman Friday 18 July, 2008 07:42 PM
Spoony tries to clear up all the odds and ends in the Governments new emissions trading scheme
The Rudd Government released its options paper on an emissions trading scheme this week, ultimately designed to reduce our greenhouse gas emissions.
The idea is for the government to issue a fixed number of Œcarbon permits¹ at a cost to the emitters. As businesses reduce their emissions through efficiencies or new technologies they can flog off the permits they no longer need via a permit trading market.
Gradually the number of permits issued each year will drop which is how we get the overall emissions reduction of 50-60% by 2050. That's the plan anyway.
The scheme will commence in July, 2010 and includes emissions from transport, heavy industry, coal, oil and gas.
Petrol has been included but there will be a cut in the fuel excise to keep the pump price relatively stable at least until 2013.
But obviously the price of things like electricity and gas will rise significantly and low income families and welfare recipients will compensated for the extra cost.
The agriculture sector has been left out of the scheme until 2015 and land clearing has not been included at all. But you can gain credits or permits by planting trees. Go figure. There is no incentive under this plan to stop the culling of our remaining forests.
It¹s worth pointing out that the only reason we have met our Kyoto target is through reduced land clearing.
We have not done much to improve efficiencies in other areas. In fact, usage of all forms of energy is rising every year, as do our emissions.
The scheme has been described as a softly-softly approach and as I read it, it is so softly-softly you wonder whether it will have much effect.
The paper suggests that if carbon is priced at $20 a tonne the cost of living will rise by a little less than 1% - a one-off rise.
But there are more than a few experts suggesting carbon should be more like $40 a tonne which would double that cost of living rise to 2%.
Astonishingly, the government will provide an undisclosed amount of financial assistance, either through free permits or up-front cash, to the coal-fired electricity generators. The amount of that help being thrown around at the moment is in the order of $5 billion.
If that is the case its pretty obvious we will be using coal-fired electricity for decades to come. Hardly a good outcome.
And as yet the so-called carbon capture and storage schemes are 'pie-in-the-sky' and even if they do work they will not capture much more than 30% of CO2 emissions from power stations. Hopeless.
The NSW government argued heavily for this 'compensation' for purely economic reasons. The state is trying to flog its electricity generation sector and was terrified the value of the assets would plummet under the scheme.
So it is business-as-usual over the environment for NSW.
And of course, Victoria and Queensland are set to build new coal-fired power stations. Business as usual.
The biggest missed opportunity was to deliberately inflate the cost coal-fired electricity which would have had the parallel effect of making investment in renewables far more attractive.
Economies of scale then kick in and things like solar and wind generation come down in cost.
It would also make nuclear generation a real economic and environmental option we are mad to ignore.
It just depends how fair dinkum we are.
The Coalition is saying the plan will punish the economy.
The Greens say it doesn't go far enough to reduce emissions.
Around 15 years ago 1500 of the world's most eminent scientists (half of whom were Nobel Laureates) urged the world to take rapid climate change seriously and start to take steps to reduce emissions.
They were ignored by all but the science community. Even the Greens didn't take them seriously, too busy hanging off US nuclear warships than worry about greenhouse gas emissions. Now they hang off power stations and coal loaders instead. Welcome to the real game, finally.
Subsequently the first serious climate modelling was released, along with a bunch of future scenarios. It wasn't pleasant reading.
In the decade since the first serious predictions were made virtually all of them have come to pass, albeit much earlier than was anticipated.
The worst case scenarios are now the real ones, and it's a no-brainer that the cost of doing nothing will be far greater than taking action now.
There is also more than enough evidence to suggest that whatever negative economic impacts there will be on current energy production sectors, there are ample opportunities to ramp-up economic growth as we shift to new sources and technologies. Swings and roundabouts.
Back in the early days of the industrial revolution blacksmiths were spewing because they lost their horse-shoeing business to the new-fangled car.
Imagine if the governments of the time gave buckets of money to keep horses on the road and the blacksmiths happy. We would say - with the benefit of hindsight - that it would be mad.
But that's what is happening with the oil and coal sectors right now.
We give them our taxpayer cash to keep the new guys out of the game, their profits up and shareholders happy. Crazy.
So here is the moral dilemma of our time....
How much are we prepared to pay to halt rapid, human-induced climate change?
And how much are we prepared to fob-off onto our kids and grandkids?
Because whatever we do to slow climate change now, it will have no effect for at least 30 years.
And the remedies will never be cheaper than they are now.
Over to you......
