The fact that fossil fuels particularly oil will escalate in price means that carbon pricing should be flexible not fixed. It is still necessary to prevent horrors like coal-to-liquids and wean us off carbon before the long term crunch. If liquid fuels are exempted from the carbon tax it defeats the point. Another crossover from stationary power stations to the transport sector is the likely uptake of compressed natural gas CNG by 00,000's of trucks and buses. This will happen as diesel gets over $2/L particularly if the diesel rebate scheme is dropped. It could happen with cars as well with the Honda Civic NGV being rated greener in the US than petrol electric hybrids. 400km range on a tank of CNG beats any affordable battery car. Many outer suburb commuters and night shift workers simply don't have the public transport option.

A really informative article thanks. What we HAVE to do is get the climate change and peak oil people talking to one another so that, as Taswegian said, we can avoid such climate horrors as coal-to-liquids. And we also need to stop growing. Any further population growth will only exacerbate these twin problems of climate change and peak oil.

Ben, why must you repeat the lies of our worst PM, until Gilliar:” Carbon pollution is the greatest threat human civilization has ever faced and road vehicles are a major source of this pollution”

Carbon is not pollution, it is the basis of all life on Earth. Carbon dioxide is a clear colourless odourless gas, beneficial to life, the benefits of which are seen in plant life, including the crops which feed us, and in the greening of millions of acres of desert. What was previously sand is now productive land. In addition to stimulating growth the increased CO2 reduces the water required for growth.

Peak oil is another myth. You may not have noticed, but the technology in oil extraction is continually improving, to the point where old fields, from which oil was extracted under old technology are now being reworked.

Green activists have been effective in closing off access to huge amounts of oil, so the sustenance of our oil supplies is dependant on counteracting the pernicious watermelons in our own community. The US would not be dependent on Arab oil if the industry had access to the vast reserves locked up on “environmental” grounds in the US..

Electric cars are the cars of the future, and always will be. Initially the electric car was so enthusiastically sold that in 1910, 90% of New York taxis were electric, and 10% were petrol. A few years later, when it was realised that the petrol engines were superior in every respect, particularly economy, the percentages were reversed, and ultimately there were no more electric cabs.

You are a dreamer, Ben. If we took notice of people like you, our lives would become a nightmare

As the world economy recovers from the depredations of the US inspired global financial crisis (it is now doing so) demand for oil-based fuels will increase, particularly by developing countries and most notably by India and China. This may well result in pump-prices reaching $2/l. by the end of 2011 and $3/l. by 2012 – and that is without any increase in excise or the effects of a carbon tax.

LNG, even for a country with plentiful supplies of it, such as Australia, is only an interim vehicle fuel and in the not too distant future will have to be replaced by electric vehicles.

Environmentally, it makes sense to encourage EV development and use since by 2020, 20% of our energy needs will come from renewable sources and by 2050 this will increase to over 50%. Public policy is already changing to focus on achieving these targets and encouraging development of technology to make EV’s more efficient and reliable.

A common perception is that EV’s will be exactly the same as present day fossil;-fuelled vehicles but propelled by electricity produced by an on-board generator and/or stored in batteries. That may well be – at the outset – but there are some interesting alternatives which have the potential to provide safe, speedy, computer-controlled transport which needs no roads and travels on a frictionless magnetic field.

For those interested in such concepts, I would suggest reading/listening to the Science Show interview with Trond Andresen at:
http://www.abc.net.au/rn/scienceshow/stories/2011/3164301.htm or tapping into the wealth of information available by Googling ‘maglev-based personal rapid transit’.

Dear Leo Lane

About the only thing you got right was that there will be a move back to electric cars. But why do you think that when you reject the evidence on peak oil? You can't have it both ways.

I don't want to be unkind, but your comments on carbon are just plain ignorant. You have to understand that we humans have upset the balance of various planetary cycles, not least nitrogen and carbon, and that is resulting in various problems such as eutrophication of our waterways (nitrogen) and climate disruption (carbon). As for peak oil, look at the production graphs - please. We are on a bumpy plateau at the moment where unconventional sources of oil (deepwater, tar sands etc) are just compensating for the shortfall in conventional oil supplies. But they can only ever produce about 5mbd out of the 85mbd we currently produce. Once conventional supplies decline past a certain point, oil prices will rise and continue to rise. The bottom line is, we have only ever had about 2.1 trillion barrels of oil and we have used up half that. But as demand increases through economic and population growth, demand will exceed supply and that will hasten the decline. If you know about bell curves, we are about to get on the slippery down slope on the right hand side.

Ben -
this statement "Governments' policies have reduced fuel taxes far below real costs."

Bbbbwwwwhahahahahahah!

You do realise that about half the price we see at the petrol pumps is tax of one sort or another, most notably the petroleum resources rent tax which has been there all along? The road user levy you cite is little more than a bite on top of all that. In the US taxes are way less, and in Europe a lot more. I sort of see where you're coming from but if you want to be effective, then it would be a good idea to reword your article.

Peak oil. Ben, you really want to google the terms "fracking" and shale and start reading. Gas reserves in particular have gone through the roof in the past couple of years - the gas industry has been completely revolutionised - but there does seem to a spill over (so to speak) into oil.

In any case, please note, none of the original, modern peak oil estimates ever suggested that peak meant the end of the oil as such. All that Campbell et all suggested back in the 1980s was that the switch between easy-lift oil and unconventional oil (oil sands in Canada for example) may result in disruption. A further problem is that the peak oil estimates mostly date from before the pre-salt layer discoveries in the Gulf of Mexico, and off Brazil.

There may well be temporary disruptions. There have been strong suggestions that OPEC has not invested nearly as much as it should have in production facilities to keep pace with demand, but if anyone tries to tell you they know what will happen to the price of oil in the near future ignore them.