An interesting analysis, Mark. While agreeing with your data on the causes of recent power cost increases, I think that you miss one interesting point and muddle your prognosis with your reflexive anti-Labor stance.

The interesting point is that the idea of a carbon tax (by any name) is supposed to provide a market signal, triggering alternative purchasing preferences, such as energy efficient devices, reduction through organisational change, alternative sources etc. It appears that the implied $30/tonne "tax" from increases imposed by the industry itself has had little effect on demand- at least to date. Maybe it is smart of the Federal government to let these price increases run their course- the increases are the same, no matter who imposes them- and the Government doesn't have to take all the heat- rather like the banks and interest rates. Perhaps more analysis of the effects these increases is needed, although I think that they will find that the demand is fairly inelastic in the short term- all the elasticity seems to be exercised in blaiming governments.

The idea- which seems to be widespread- that the taxes should be returned to the consumers seems economically self-defeating. Certainly, our welfare policies need to be continued in this area- mitigating the problems of the less fortunate, but returning funds to the middle class and industry will only serve to reduce the intended market signal.

I think that Mark is not entirely correct with his comments on China. I have seen what they are doing and it is big. Certainly, they are prioritising economic growth, but working on many fronts to reduce their "average energy intensity", by all the methods referred to above. And building some new industries as they go, too.

Mark also raises, once more, the issue of Australia's size and therefore (in)significance, in this issue. As Garnaut pointed out in his Report, this is a classic "free-rider" problem. We could equally well argue that we shouldn't be in Afghanistan, contribute foreign aid or conduct scientific research. We do it because we are global citizens and good citizens don't free-ride.

Mark Lawson here

Jedimaster - I don't say anything about politics one way or another. What I do say is that the Labor government risks political disaster in imposing a carbon tax, particuarly given what's already happened. If you object to somehow returning most of the money to the consumers, which is just a suggestion I repeated, then effectively you are closing off any hope of a carbon tax.

Faced with an additional tax, which they can identify as a tax imposed by the govenrment, consumers will suddenly become a lot more right wing, and never mind what you suppose my politics to be.

As for China, sorry but you are deluded. They have agreed to increases in energy efficiency, but it is impossible to check whether any of those targets are being met. In any case, the vague promises made do not add up to a reduction in emissions. You are reacting to carefully controlled news releases.

I agree with Mark, as soon as it becomes a difficult policy to implement, i.e. their voters don't like it, it will be committeed and reviewed to death as is happening with the Murray basin recommendations.

As for the free rider analogy, I agree that we should not be free riders, however, going it alone, as a tiny nation, will get us no kudos and only the right to feel smug. The cost to the economy would vastly dwarf any foreign aide or assistance.

Mark, as long as you have no interest in real policies to reduce emissions - you've consistently made it clear you don't think there is a climate problem - I can't take your critiques of climate policy seriously. It's the success of those like yourself who disbelieve the problem - in promoting delay and watering down policy - that we've gotten and continue to get policy that is inadequate and ineffectual. Using that as some kind of evidence that all policy is inadequate and ineffectual and even worse 'mad green' policies are waiting in the wings isn't unexpected from someone with your views.

Looming problems of climate change, sustainability and environmental degradation are all too real and the worst policy is to pretend they don't exist and oppose all serious efforts to address them. The rise of the Greens is a response to the utter failure of mainstream politics to deal with them effectively. I doubt if I'm alone in wanting to see genuine action rather than watered down greenwash from mainstream politics.

The truly mad schemes are ones that presume that all the scientific advice from every leading institution that studies climate is wrong, bet our nation's and planets future on that being the case and promote the view that it's in our long term interests to do nothing about emissions

Pity we don't have you as World Dictator, Ken. Think how much better off the world would be with your religious wisdom at the helm.

First, I generally agree with Ken Fabos' comments.

Now Mark: There are a number of intertwined issues here- let me try to unpick them. First, there is the crude political issue. I probably agree with you, in that it is now so fashionable to bash governments, that applying (watch my language- not "imposing") a new tax could be fatal- particularly if the commentariat insist that it is so, and indulge in pop-poll analysis rather than proper policy analysis.

Secondly, if people and companies know that they are going to get their taxes back, they won't change their preferences. However, if the taxes are used to invest in genuinely (carbon) energy conserving technologies, then there is a double gain- the immediate price signal is up, while the long term issue is addressed. Emphasis on "genuine", as not all technologies are going to be effective. Even better in the short term is for the Government to pull the tax money out of the system- the reverse of "quantitative easing". Money is a proxy for energy, no matter who spends it. Even if the energy conserving measures are genuine, they will take money/energy in the short term. Therein is a problem that has not been addressed.

Thirdly, China- I've been there, I've been involved with renewable energy for 40 years and I can believe my eyes. For example, China has more solar water heaters per capita than Australia (and Australian designs at that). Solar water heaters make good sense now, even if solar cells are still about a decade from grid parity. China knows that energy waste is bad economics- but as I said, they are trying to balance priorities- including screwing the USA. And I did say "average energy intensity"- which is what the Chinese say they are aiming at- that is not the same as absolute reductions in the short to mid term.

While the NeoCons can successfully turn every prospective investment in nation-building into "another great big new (socialist) tax" bogeyman, then we will continue to languish as the once "poor far-east" becomes the "rich near-north".

Mark Lawson here

Ken Fabos - I didn't say a single word about the science in this article. Nor did I say anything about whether cutting carbon emissions is a good idea. I merely pointed to the practical difficulties of this policy which are huge. Its no good moaning that because my previous article didn't say the right things, as far as you were concerned, then this article must somehow be wrong.
Attempts to cut carbon world wide are just never going to work - at the very most reduce the rate of growth in emissions - and the article points to just one part of this inescapable conclusion.

The sooner activists grasp this basic, obvious point the better off we will all be. However, they can take comfort from the fact that the IPCC's emissions projections are almost certainly wrong in the first place - the methane projections are already completely wrong - and a closer look at the accepted wisdom on how long carbon hangs around in the atmosphere yields some uncomfortable truths. But that's for another article.

The goal of a carbon tax -- apart from raising obscene amounts of money -- is to encourage people to 'own' the struggle against 'global warming' by sacrificing some of their income to it. It is the same reasoning which led the British government to ask its citizens to donate their iron railings and metal cookware to the war effort during WWII. These were then shifted to huge dumps out of sight and used for nothing whatsoever: but people felt warm and committed because they had had a chance to 'do their bit'.

So 'do your bit' for climate science, and encourage the government to impose more futile and meaningless sacrifices upon us all in the name of 'sustainability'. Try and forget that your stake in the world of 2200 or so is negligible, and be prepared to trade your present quality of life for an incalculably small chance that your great-great-great-great grandchildren might be four-tenths of a degree cooler than they would be otherwise.

Mark Lawson here.
Jon J - good point about the ironware.

Jedimaster - sorry but you are hopelessly deluded. I don't know where you got the figure of more solar water heaters per capita than Aus but, in any case, the stat is meaningless. Australia's solar water heating capacty barely registers. The problem is that the Chinese are building immense numbers of coal fired plants. In fact, more than the total capacity of the Aus network in a single year.

You managed to focus on the water heaters and forget entirely about the coal fired plants. Endearing but not impressive.

As for the business about spending the money raised from the tax on carbon saving initiatives that just makes the tax politcally harder to sell. You have to remember you are not dealing with activists but with ordinary voters who see money going out of their back pocket to fund wild schemes.

Ken, since you raised the question of the science, you may have the science which shows that human emissions have any measureable effect on global warming.

Even the IPCC does not have any such proof, or they would not stick to the pathetic refrain of "very likely" that human emissions cause global warming.

Why are we discussing a tax on carbon dioxide, which has no scientific justification, if it is meant to counter global warming?

It might as well be a tax on breathing. It would be just as dishonest.

Leo

It is not difficult to find these figures - just google "human CO2 emissions. The following quote is from http://www.gcrio.org/doctorgc/index.php/drweblog/C53/

"Humans exhale about 1 kg of carbon dioxide per day (http://cdiac.esd.ornl.gov/pns/faq.html). The exact amount depends on age, sex, size, and most importantly activity level. Multiply that by a world population of six billion and you get a very large number.

However, human exhalation of carbon dioxide is part of a closed system. There can be no net addition of carbon dioxide to the atmosphere because the amount of carbon dioxide we exhale can’t be greater than the carbon we put into our bodies by eating plants, or eating animals that eat plants. The plants got the carbon from the atmosphere via photosynthesis.

This closed system is true for any animal, not just humans. It is also true for a growing population. You simply can’t have more animals than there are plants to support those animals."

The point that I make here is that most of these discussions go on as "data-free discourse". My shearer-father used another expression.

Similarly, Mark. I was at the world solar congress in Beijing in 2007, where I first heard that China had about 100 million square metres of solar water heaters. Wikpedia has similar figures and they seemed credible, as one can see them on many rooftops in Shanghai, Xian and Beijing. As the CEO of Suntech, an Australian-trained PhD is one of China's richest men, one might ask where he gets his money, if not selling solar water heaters and PV panels.

Water heating in Australia is about 10% of all final use energy demand, and half of that comes from electricity. Primary energy demand would therefore be about 15-20%. This is not trivial.

As well, China is presently installing about 100GW of wind power- about twice all of Australia's electricity production.

Of course China is gobbling energy and is polluted- on some days you can't even see across the streets, let alone along them. That does not contradict the fact that they are making huge strides towards improved energy intensity.

What is lost in this debate is the effectiveness of a carbon price to reduce emissions in the electricity sector – which, everyone seems to accept, is one of the major target industries. I, and some colleagues, have recently produced a paper looking at how carbon pricing changes the relative competitiveness of low-carbon generating technologies. The paper will be published shortly.

The general expectation is that with a carbon price, the electricity utilities will switch from coal to lower-carbon fuels. In our paper, we targeted baseload technologies as they produce about 75% of Australia’s electricity (similar around the world).

The results were that below US$30, the utilities will do nothing and just pass the cost on to the consumer so the Greens A$20 will do nothing to reduce GHG emissions from the coal power plants. We would need a price over US$40 before considering building new coal plants with carbon capture and storage. To switch to baseload concentrated solar power would need a price over US$150. Needless to say the least cost solution was nuclear but we are not allowed to seriously consider that in Australia.

Jedimaster - I'm glad you were at the world solar congress in Beijing in 2007, where you heard the China solar water figure which Wikipedia also quotes - very likely from the same source.

But I'm not doubting it (although I could) because it reinforces the very point I've been making. Despite trying to pout a positive spin on the Chinese efforts activists still come a long way short of explaining away the vast increase in conventional coal powered plants.

But in any case, this is wild-eyed delusion. Solar water heaters haven't made any real difference in Western economies, let alone in China. Germany has gone through a craze for PV panels and out the other side, without making a dint in its power supply.

Even the power generated from dams (of which China has a zillion) hasn't made a difference - and that would add up to far more than anything from alternate sources. take a look at the Aus experience on www.abare.gov.au ,the energy report mentioned in the story, and the next time you're in Beijing skip the congresses and take in the sights..

Leave it with you

Thanks, Martin N, for getting the conversation back on track. I look forward to reading your paper- I hope that it is publicly available.

The basic concern that I have is that, while a carbon tax will shift preferences in energy supplies, it may not decrease carbon use. To restate the basic premise: The increased price means that alternative forms of energy, which were previously too expensive, become competitive because they use less carbon in the operational phase of their life cycle and thus are subject to less carbon tax. So far, so good?

The "alternatives" were not competitive before the tax because their total life costings were higher than the present systems due to higher up-front (capital/construction) costs. Are we still in agreement?

But the carbon implications of these capital/construction costs are not taken into account, as the carbon might be used elsewhere (take, as an extreme example, a skid-mounted gas turbine that is imported from China- no apparent local carbon in its construction, except for the truck that brought it from the wharf).

However, the carbon is still spent, and to extend the extreme example above, the gas turbine was manufactured mainly using present high-carbon energy sources- and more of them than would be used making one more high-carbon generators before the tax. Are you still with me?

I keep returning to the "net energy analysis" issue, because it hasn't been resolved. Carbon taxes might help shift generators onto a better learning/cost curve, but in themselves, they are only sweeping the problem under the carpet- or back along the life cycle. For example, when PVs (yes- I know- they won't solve all the problem) achieve grid parity (without subsidies) they will use about as much carbon in their life cycle as the present grid. Subsidising them will increase demand and thus help drive the price down. Unless the subsidy does that, then we are simply using the carbon elsewhere.

Mark- are you still with me?

Mark/Curmudgeon

I don't think that we are as far apart as your rhetorical style is trying to force us.

There is no doubt that China is going gangbusters with high-carbon generators, which make a mess. But they are also working on a lot of other energy fronts that are serving to reduce their "average energy intensity"- ie energy per money unit. They have been upfront that they are not going to reduce their total energy output a la Kyoto etc- they have said many times that this would force them to remain third world. I agree with their analysis, but it doesn't relieve the problem in the short term.

As to water heaters- ask Israel what they think of them- they have a chronic energy problem that they addressed and I think that you find their exported water heaters in Bunnings- cheaper than the Aussie ones. As I said, domestic water heating is a big contributor to energy demand. Solar could do more if they could be purchased at the same interst rates as power authorities can borrow for carbon generators.

PVs at present are a piddling proportion of the total- lost in the rise and fall of demand. But, the long-term learning curve analysis has them at grid parity at a cumulative production of about 100 GW- which at present production rates is at about 2015. That is still less than 5% of total global electricity production. Maybe PVs will not solve base load, but a 20% contribution could be handy.

BTW- Germany is building manufacturing capacity by subsidising PV production in the name of energy alternatives as a way of getting around GATT decrees on subsidising and dumping. If the PVs that we install aren't made in China, they'll be made in Germany.

And I did visit the Great Wall- the last 20 km of road was lit by PVs on every post- great way of boosting an industry eh?

Jedimaster, assuming I have understood your point, you are correct that the carbon price will only apply to "stack" emissions - emissions created while generating electricity. All the other emissions created in manufacturing and constructing the plant and operating the plant are technically not included.

The only way they can be included is with a global carbon price on everything and then they are captured at the point of creation (making the cement and steel etc) and get passed on in increased prices to the generators (a bit like the GST).

In our paper (which will be public when published) you will see that we have used the LCA emissions which is the only proxy we have to address this issue. In the short-term the generators will only pay for the stack emissions. In the long-term planning they should factor in the LCA emissions which they will eventually pay for and impacts every technology.

I hope this answers your question.

Thank you, Martin N.

You are clearly are on top of this issue.

I also agree with your analysis that without a global ETS then the impact will be limited, but possibly useful.

My concern is that we will be deluded by the lack of local emissions, when we have outsourced them all to China. I was impressed a couple of months ago when I was in New York as to how clear the skies were. On a boat trip around Manhattan Island, it was obvious that all the industry that had been there has gone- mainly to China.

Maybe that's a good thing. We can all beat up on a country we love to hate, while enjoying the inexpensive, high quality fruits of their in-sourced carbon burning industriousness.

Not what I asked Jedimaster. Whatever question you answered it was not mine, which I will set out clearly for you, again.

Where is the scientific evidence that human emissions have anything but a negligible effect on global warming?

The effect is so small, if in fact there is any effect, that it is not measureable.

Remember when the IPCC put forward their pathetic opinion that it was "very likely", and the satellite data would show a "hot spot" in the troposphere, which would be the "signature" for AGW?

There was some speculation that there may be a problem with the satellite instruments, when this did not occur, but it is crystal clear that the IPCC's expectations were based on inflated estimates.

Human activity has both warming and cooling effects, both very small. The possibility is that they balance each other out.

The effects are local and there has not been shown to be any global effect.

Be careful with your answer, if you try again, as your last attempt could have had a misleading effect, without my clarification.

Martin N, should we not consider on what basis this iniquitous tax on the emission of a benevolent, life giving gas can be justified, before looking at the mechanics of perpetrating it?