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The Forum > Article Comments > Carbon taxes: an expensive solution for Australia > Comments

Carbon taxes: an expensive solution for Australia : Comments

By Alan Moran, published 11/11/2005

Alan Moran argues coal is Australia’s cheapest energy source.

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Alan, I suppose if you look at it from a short term, negative, right wing economic elitist perspective, then you would be right, But if you look at it from a long term, positive, economic, environmental perspective, then you would have to say that you live in ga ga land.

Your assumptions lack the necessary information, to make a judgment that is so narrow and vested as the one you put forward. The only way to provide cheaper energy, is to make as many people self sufficient in energy as possible and decentralise energy generation. With your approach, we are going down hill rapidly with one result in sight. Environmental, economic, infrastructure meltdown, as is happening now. So why more of the same as an answer.

Giving rural populations combined solar, wind and biofuel backup generation for households, as well as solar furnaces for larger populations, within 5 years would turn around our energy problems. Solar sunballs, cells and modern small wind generators are economically viable and over a lifetime, saves lots of money. By connecting to the current grid, excess can be then supplied for manufacturing, paying of the system. This would create lots of jobs, business and industry, reducing costs firstly to rural sectors, then cities.

The current approach is designed to keep as much as the resources as possible in the hands of a few. This will lead to where it's currently going, down the tube.
Posted by The alchemist, Friday, 11 November 2005 12:22:57 PM
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The discussion omits the costs of not reducing emissions and some indirect benefits of alternative energy, both of which are hard to quantify. If climate disasters continue the rest of the world could retaliate against Australia's unrestricted burning and export of coal. Meanwhile alternatives to oil must be found and countries such as China will surge ahead with nuclear power. Therefore it might be prudent to bite the bullet now and learn to live with carbon constraints. Nations that don't will lose not only moral authority but technical know-how.
Posted by Taswegian, Friday, 11 November 2005 12:27:09 PM
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Our standards of living depend on trade - exporting those goods and services we produce competitively and importing those where overseas suppliers are more efficient. Many of Australia's most competitve export industries are energy-intensive. Alan points out that carbon-saving measures, both proposed and in place, could double the cost of power. Without comparable cost increases for overseas competitors, this would make those export industries uncompetitive. The economic costs would be severe. In practice, the greenhouse gas savings from shutting down those industries would be negligible, as coal would be diverted to export markets such as China and metal ores would be exported for processing in Asia. Such an "all pain, no gain" policy does not have much to commend it. (Even leaving aside uncertainties on the complexities and timing of climate change, the prospective rate of which has been exaggerated by flawed IPCC modelling.)
Posted by Faustino, Friday, 11 November 2005 7:22:27 PM
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In touting the costs of reducing emissions, this article makes several assumptions and omissions to exaggerate the case for the status quo being the least cost (best) option.

There is also no mention of the advantages born from taking a strategic lead in 21st century development.

The assertion that Australian carbon trading costs would be $41 begs explanation. Based on a similar scheme in operation in the EU? How do you arrive at $41?

In 2002, the Bush Administration said it would take carbon trading at about $150 CO2t in order for the US to meet its Kyoto target. Such an “insidious economic burden” turns out to be less than the difference that US motorists have paid at the pump between petrol 12 months ago and today. And gee, petrol consumption in the US increased last year, matching national economic growth.

The full cost of nuclear power in Australia should ALSO include the cost of Importing the technology, expertise, contractors, fuel and generally subsidizing the industry. And exactly which Nuclear power station has been decommissioned and had all its waste safely disposed of for only 10 - 15% of its total cost? The real costs of nuclear power in a country without any nuclear power infrastructure, like Australia, from scratch to electricity, would be nearer $200 per kilowatt hour.

The cost of renewables like wind is continually decreasing whereas the cost of coal energy, particularly in a carbon constrained world, is increasing. The significant but narrowing difference also reflects the fact that coal has greater economies of scale and far greater historical investment. The real question is which mix of energy provision is better for Australia in the long term? In what should we invest our efforts today?

Today, alternative fuels are more expensive than coal but will this always be the case? Australia’s interest lay in being able to minimize the cost of energy and maximize the consequences of our energy production over the long term.

IPA can do better than this Anti Climate Change Fear Mongering for Dummies.
Posted by martin callinan, Saturday, 12 November 2005 8:47:46 AM
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Temperature rises have been a little higher than the IPCC 'B' scenario but there has been some retraction on expected sea level rise. Firstly events such as Katrina have been indelibly linked to global warming in the public's mind. Secondly having a polluter-pays regime in place is good insurance in case urgent action is needed later on. Therefore we should implement modest carbon taxes or permits and strongly increase renewables quotas. The coal industry can live with this particularly if other countries follow suit. If down the track wind energy (for example) appears to hit a plateau despite carbon tax exemption at least we will have tried. The thing is to get serious now. Ex-BHP chief Paul Anderson has called for carbon taxes so even some businesses see it as the way to go.
Posted by Taswegian, Saturday, 12 November 2005 1:32:37 PM
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To dismiss renewables such as wind or solar is very shortsighted - we really need to be putting alot more money, effort and research into these forms of energy.

Consider the following:

"If you install enough wind or solar power stations you can easily compete with nuclear, but what you have is a difference of scale - wind and solar are generally smaller, but you can have more of them. Nuclear costs more because it is a very complicated and dangerous technology.

Coal is also a dangerous technology, but it's not complicated. With nuclear, you've got all the mining and related hazards and then you've got the radioactivity that has to be contained - it's 2 to 3 times more expensive then coal. Nuclear will probably never really be cheap, simply because of the safety costs.

However, adding in the cost of greenhouse gas production, changes everything. There's been studies done in the EU on the external costs of burning fossil fuels - there are some substantial health and environmental costs - and when you take that into account, you double or triple the cost of fossil fuel production.

But I'd rather use that as an argument for using renewable energy sources, such as wind or bio-fuel. Wind is expensive because it's a technology that is undergoing rapid development, it's already competitive with coal in some parts of the world (where the coal has to be imported) but in Australia it's probably 20 years before wind will be able to compete with coal.

In the interim the industry needs some government assistance. Also, once we increase the scale of production and the size of the market, wind power will get cheaper. The tragedy in Australia is that the government is not giving enough support to the renewable energy industry and it will probably stop growing next year. There are huge subsidies to the nuclear industry, in the UK and US and these subsidies continue. Renewables don't receive this.

Dr Mark Diesendorf, Institute of Environmental studies"

Coal is finite, nuclear inefficient, renewables? There could be a future.
Posted by Scout, Sunday, 13 November 2005 1:40:13 PM
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