Jul 12, 2010

No carbon price? You’re being conned

If you can put aside the high and rising costs of failing to commence Australia's transition from one of the world's biggest carbon addicts to a low-carbon economy aside, our handling of climate policy has been the stuff of priceless comedy.

Bernard Keane — Politics editor

Bernard Keane

Politics editor

Ross Garnaut called climate change a "diabolical policy problem" but of course it's turned out to be a diabolical political problem as well. It killed off two Opposition leaders and gave Kevin Rudd a healthy shove. And it certainly didn't help John Howard's desperate attempts to retain power. If you can put aside the high and rising costs of failing to commence Australia's transition from one of the world's biggest carbon addicts to a low-carbon economy aside, our handling of climate policy has been the stuff of priceless comedy. Particularly when you recall both sides of politics went to the 2007 election committed to introducing an emissions trading scheme, and both have wimped it. Labor, having devoted considerable bureaucratic resources and political capital to fulfilling its promise to introduce an emissions trading scheme only to junk it on, apparently, little more than a whim, is now desperately trying to craft a jury-rigged agenda of climate-related initiatives. Depending on which newspaper you read, it will involve spending on renewables, regulation, or some hold out faint hope, even a carbon price. And, by the way, there is support within the Government and within Cabinet for a carbon price, however much some unidentified senior ministers rule it out as impractical. Meantime the Opposition is trying to add some bits and bobs to its own witless "climate action" policy which will mainly involve hoping farmers are innumerate enough to undertake "soil carbon" initiatives that cost far more than the $8-10 per tonne subsidy on which the entire policy is based. Greg Hunt, who abandoned his decades-long support for an emissions trading scheme to keep his shadow ministry job following the right-wing putsch last year, is revealing more than  he perhaps thinks now that he's spruiking nuclear power, at least to Coalition attack grub Glenn Milne in today's Australian. The Coalition's "direct action" guff is supposed to enable Australia to easily meet the bipartisan commitment to reduce emissions by 5% by 2020, notionally making nuclear power irrelevant. The Coalition is dead keen on nuclear but won't ever move without Labor giving them cover. But as Crikey showed in November last year, nuclear power is ludicrously expensive and needs massive taxpayer support, otherwise it costs a lot more to build and more to operate than renewables. And that's before you figure out where to park the waste for a few hundreds of thousands of years or decommission reactors. Maybe if you call it "Green Waste" it'd be easier to deal with. More to the point, as Greg Hunt appears to have forgotten, along with everyone else in this place where the Perpetual Present reigns supreme, John Howard asked Ziggy Switkowski in 2006 to look at nuclear power, and Switkowski told him it couldn't happen without a carbon price. So, no nuclear power without a "great big new tax". The debate over climate policy in Australia is equal parts hypocrisy from business (who now apparently want the "certainty" of a carbon price, having idly sat by while Malcolm Turnbull lost his leadership), rentseeking by polluters and arse-covering by our major party politicians. The last aren't so much scared to show leadership -- and what sort of leadership is needed when polls consistently demonstrate a majority of voters want action on climate change anyway? -- as simply implement the policies they committed to at the previous election. So here's a handy rule-of-thumb for the debate. If someone doesn't want a carbon price -- an actual price that makes some things more expensive for consumers and businesses compared to others -- then they're not serious about starting the transition to a low carbon economy. Or if they are serious, they want you to think there's no cost in using taxpayers' largesse, or regulation, to do it. Avoiding a carbon price does reduce one particular cost of addressing climate change -- the political cost. It does it the usual way you address the political cost of reform, by shifting the economic cost from one group of voters onto the taxpayer, or by making the cost invisible by moving it into transactions and administrative efficiency. But we still pay for those costs, whether we can see them or not. Those costs are higher than if they were directly and transparently priced onto goods and services. Worse, the longer we delay a carbon price, the greater those costs will be. So any politician or commentator who tries to sell you measures other than a carbon price -- by imposing standards on power stations, or spending more money on renewables, or handing out solar panels, or talking glibly about a "Green Army" -- is in effect telling you they think you're either too stupid to notice you're being conned, or they don't care if you do notice. Australians tend to judge their politicians harshly, often without good reason. But when it comes to climate policy, our leaders are every bit as bad as voters suspect.

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168 thoughts on “No carbon price? You’re being conned

  1. Andos

    I’m not sure that your characterisation of the Government ‘junking the CPRS on a whim’ is entirely accurate, Bernard. They tried very hard to make it law, and were only prevented by a last minute change in the Liberal Party leadership and the predictable cooperation of the Greens with the Coalition in the Senate.

    The Government only shelved the CPRS once it was clear that there was no way to physically pass any kind of emissions trading legislation through the Senate this year.

    Maybe you mean that Kevin Rudd should have called a double dissolution to pass the CPRS? I doubt very much whether the decision not to call a DD was made ‘on a whim’.

  2. John Bennetts

    Bernard, you are hopelessly out of date. Nuclear is neither as dangerous and expensive as you state, neither are the alternatives free from major problems – especially pollution problems.

    As stated in the comments to your previous piece, November of last year, gas is mainly methane, Ch4. Now, this gas has about 25 times the greenhouse potential of CO2, so any leaks are pretty severe. Add to this the inconvenient fact that at the wellhead or processing plant, very large volumes of CO2 are recovered from the natural gas and simply dumped into our atmosphere, yet nowhere do I see this accounted for in the GHG analyses of gas turbines.

    Regarding wind, I have seen many videos of actual fires, including grass fires, due to fires burning in the nacelle and showering the surrounding fields with incendiary plastic, metal, fibreglass and rubber stuff. The nacelles have to be permitted to burn themselves out and fire brigades (including perhaps my own self) are unable to approach and are simply forced to chase the resulting grass fires. Imaging a farmer in an Australian summer standing by as his field, fences and those of his neighbours are demoloished due to a fault in a single 2MW appliance. Not nice.

    Barry Brook’s booklet “Why Vs Why”, which he shares with the anti-nuke Ian Lowe, is as good a place as any to get a feel for the true strengths of the arguments pro and agin nuclear. I side with Barry, but you are entitled to your own stance.

    No, it is not. The real tax at foot here is the way that carbon based energy effectively taxes the air we breathe and on which the world’s ecosystems depend. To balance the scales, a carbon tax equal to the current commercial cost to remove permanently from the atmosphere each tonne of CO2 produced would be many, many times the recommended $10 (recently flagged) or the IPCC3 suggestion of circa $30 to $65US per tonne of CO2.

    Remember, each tonne of (say) 20% ash coal produces 3 tonnes of CO2. In other words, the coal producers have been devaluing our planet by somewhere between $30 and $200 for each tonne of coal burned, yet to try to address this imbalance is somehow called a Great Big New Tax. It should be thought of as a Tiny Little Waste Dumping Disincentive.

    And, in case the coal industry are not happy enough yet, consider that the CO2 and methane liberated from their mines, both open cut and underground, add substantially to the waste.

    I have taken enough space for a single comment. I suggest that interested people check out several web sites and keep an open mind. Perhaps start at Barry Brook’s site, bravenewclimate.com .

    like Barry, I have somewhat reluctantly come to the realisation that the only current technology with any hope of providing the necessary supply, security and reliability of electrical energy for tomorrow’s world is Type 3+ nuclear, transitioning to Type 4 during the next three or four decades.

    Oh, and if anybody thinks that Chernobil was the end of the world as we know it, it was not nice but it has had an insignificant effect on the biosphere, certainly less fatalities than, say, swimming in the ocean or fishing from the rocks.

  3. ShowsOn

    [otherwise it (nuclear) costs a lot more to build and more to operate than renewables]
    This is just wrong, you are completely under estimating the amount of electricity one nuclear reactor can generate. You only need to build 1 nuclear reactor for every ~1000 wind turbines operating at full capacity (which they never do), or 3000 wind turbines operating at average capacity, or 20 really big solar plants operating at their average capacity, which is about 30% at absolute best.

    Remember, we need something like 100 GW of electricity generation by 2050, which is a big less than double what we use now. If renewables are going to be our saviour, where will we put all these renewable plants. Do you really think people will accept building 150,000 wind turbines? Remember, you need to put them near where people live, else you will you will need to spend hundreds of millions on new transmission lines, and you will reduce the efficiency of the network.

    Plus, when you consider all the steel required to build wind turbines, it turns out that they are a more carbon polluting form of electricity generation than nuclear and photovoltaic.

    Also, you can’t count on wind power to produce its capacity because the wind may change. So that means you will need other forms of generation on stand by, such as gas, to pick up the slack. So massive wind farms would also mean requiring massive investment in gas power stations. If you are burning gas, you are putting carbon in the air so that isn’t a long term solution to climate change.

    The capacity factor of nuclear at best practice is 90 – 95% of rated capacity. Recently a reactor in the U.S. operated at full 1 GW capacity for nearly 2 years before needing to be shut down for refueling and maintenance.

    I am excluding consideration of clean coal, because that is pie in the sky, with the first full scale plant not expected to be operating until 2035 – 2040. And the cost will probably end up being the same as nuclear.We could have a tried and tested nuclear reactor working by 2020 if we wanted it. I mean, to put this in perspective. If we shut down the 2 most polluting coal power stations in Australia, and replaced them with 4 nuclear reactors, we would cut carbon emissions by about 12%:

    The issue of nuclear waste is serious, but most waste is stored in cooling pools then in dry cask containers at the reactor sites. What we currently call “nuclear waste” can be reprocessed into mixed oxide fuel that can be put straight back into reactors to produce more electricity. Of course, Australia with its huge geography and stable geology could safely store nuclear waste, most likely up in the Pilbara when all the iron ore is gone (which is the time scale we really need to think about, we won’t produce a significant amount of nuclear waste for decades).

    I agree that a good rule of thumb is that if someone doesn’t think a carbon price is necessary then they aren’t taking climate change seriously. Another good rule of thumb is that if someone doesn’t think that nuclear energy is PART of the climate change solution, then they aren’t taking climate change seriously either.

  4. Mark Duffett

    But as Crikey showed in November last year…

    Er, no, Crikey has done no such thing. When you fail to respond to a comprehensive rebuttal of your points such as appeared in the comments to those articles, the upshot is that you haven’t shown anything at all, except the poverty of your argument.

    As John Bennetts suggests, spend some time at bravenewclimate.com if you’re interested in why Bernard is wrong about nuclear (and, as implied, renewable) energy.

  5. Michael Wilbur-Ham (MWH)

    Whether or not nuclear should be part of the mix, nuclear is only a long term option.

    If we are serious about taking action on climate change then we first need to take lots of short and medium term actions. Things that will start to reduce emissions quickly. Until we have got the short and medium term right, discussing long term options is just a distraction or, in some cases, a deliberate ploy to enable business as usual for now.

    What is clear from the Labor supporters on the Poll Bludger blog is that Labor has failed to get across to even it’s own hard-core supporters the magnitude of the change needed to prevent climate change.

    Apart from The Greens, no party is proposing anywhere near what the science says is necessary to make a difference.

    In 50 or 100 years time there is only one type of action which will have made a difference – that is action which makes the huge reductions needed to prevent warming of over 2 degrees.

    But to Labor and Liberal “action” is just putting in place some policy that makes such insignificant changes to our emissions that it will only slightly delay and not prevent warming far in excess of 2 degrees.

    Even worse, actions such as the roof insulation scheme and the greens loan scheme are regarded as making a difference. Yet if an ETS is put in place (and the target is not adjusted to take into account all such schemes), neither scheme will result in any changes to our emissions. If the ETS is a 5% reduction, then our reduction is 5% with or without these schemes being put in place.

    You can’t play politics with nature. Either we quickly start to take real action, or it is all just political spin.

  6. Liz45

    @JOHN BENNETTS – “Oh, and if anybody thinks that Chernobil was the end of the world as we know it, it was not nice but it has had an insignificant effect on the biosphere, certainly less fatalities than, say, swimming in the ocean or fishing from the rocks.”

    How do you know? With certainty? You don’t! Nor does anyone! Why has the incidents of cancer grown by such huge numbers since the arrival of nuclear power? What is causing it? If cancers had a ‘little tag’ on them that told the story of their beginnings, we’d probably all be quite shocked, and in fact, there’d probably be a world wide revolt! Those who are pushing nuclear don’t tell the whole truth for many reasons, mostly money! Too much to be made from the whole dirty cycle. I’m in favour of renewable energy, particular solar and perhaps wind and thermal.

    The CFMEU has declared the whole nuclear fuel cycle as a no go for its members. It considers it as the new ‘asbestos’ of the future. I support them in this!

    Australia doesn’t ‘need’ nuclear power. It’s too costly in many avenues, but health and safety is a good place to start. Ziggy is like many who push nuclear power – self interest, and also he won’t be around after about 40 yrs – he has a damned cheek to foist this on my grandkids – and everyone else’s as well. I’ve lost too many people from cancer, and nobody seems to give a damn about cause – the push is for the cure, as it would have a financial component – make some people rich. Why don’t people show more concern about what causes it? Pollution, fertilizers etc?

  7. Fran Barlow

    With the exception of your comments on nuclear power, well said Bernard.

    It certainly is the case that any near zero CO2-emissions industrial-scale energy system will demand the internalisation of the costs to the commons of dumping industrial effluent freely into the biosphere.

    What would be interesting is if the ALP junked its policy of opposing nuclear power development and simply declared itself in favour of the immediate imposition of an initially low but escalating carbon price, removed all MRETs and RECs and other subsidies for FF or renewables or any other energy source and then said that it would leave it up to the market to decide how to respond.

    The Coalition would be wedged and The Greens would have no place to go. Most of them would give their effective preference to the ALP. We would also have opened the way to the lowest cost industrial-scale near zero emissions energy system ubiquitously available. If geothermal or any other system proved competitive with coal for base-load, it could be taken up and displace it. If nuclear really was uncompetitive, then the arguments about its merits would be moot. One suspects we would initially have a lot of gas replacing coal, but in the long run, that isn’t sustainable or even adequate in emissions terms. It’s like two-finger typing. You can clearly write a letter this way more quickly than if you learn to touch type first, but in the long run, if you want to type long passages quickly you must learn touch typing.

    Re your reference to your article about nuclear power last November at the link above.

    I note this here:

    Wind and solar power have the advantage of […] no decommissioning costs.

    Come again? You’re going to leave sites that are selected as viable for wind and solar occupied indefinitely with obsolete wind and solar dishes? That sounds sensible. Oddly, at least in terms of wind, that policy is not being followed. In fact, wind turbines with much higher ratings which require new and larger concrete footings are being built.

    The other point which ought to be made here is that, considering Australia, apart from geothermal — which might well compete here with the most expensive nuclear power, there is no renewable source capable of doing for Australia what coal does now at a comparable cost with nuclear. In order to provide power with the same load curves as the coal and gas we have now, one would need either massive overbuild of wind or solar or massive storage or a significant increase in redundant dispatchable fossil or nuclear energy. Any way you slice it, the cost per tonne of CO2 avoided goes way up using renewables and the amount you can afford to avoid declines. In practice, the best fit for renewables without nuclear entails using lots of gas to ensure that coal plants are replaced. But if you’re going to do that, why not straight swap for gas and forget wind and solar? You could replace a lot more coal that way for each dollar spent.

    The main reason that wind and solar can appear cheap is because the calculations take no account of the practical context in which these technologies would function. It really doesn’t matter how much a given windfarm or solar dish array might produce on any given day. What matters is is its capacity credit — what it can predictably produce on demand. A corner shop might well have your breakfast cereal in the volume you want it cheap, but most people prefer the supermarket because they can count on it being there in the volume they want cheap. Similarly, what an energy market needs is the ability to guarantee supply no matter whether the wind is blowing or the sun shining. Some people say that scattering wind farms over a wide area can compensate for capacity factors of 30%. Clearly this might work, but it can’t be guaranteed. Between 17-21 May this year in South Australia their 972MW of notional capacity was supplying less than 2% of its output, despite covering an area of 1100km. Nearly as bad, if you are going to reticulate energy over large distances, you have to install the transmission capacity to carry it and the equipment to ensure stable current and so forth. This adds to cost. These costs have to be factored in.

    In practice, in SA, the capacity credit for wind is about 8% — meaning that only about 70MW of that 972 is really relied upon. In Victoria, it is 3% and in both that is based on gas stepping up when and if wind cannot. Consider a single project aimed at retiring a single coal plant. Hazelwood in Victoria supplies about 27% of the state’s load. It is the world’s dirtiest coal plant — not merely on Co2 but in other pollutants as well. Meeting its notional 1600MW would imply building about 33 times that rated capacity in wind at the capacity credit used by Victoria (perhaps $120 billion for the wind and gas not counting transmission) — and then covering that with gas. Or you could just replace it with a Brayton cycle gas plant at a tiny fraction of the installed wind + gas cover cost. What to do?

    At the moment, in China, you can get nuclear for about $1.5 billion per GW — more than coal to be sure — but at least an order of magnitude less than wind or solar and cheaper than gas. Even if we accept the latest contract price for the UAE of about $3.6Billion per GW we are way ahead. Unlike renewables, nuclear can be built in the ideal place to serve load. If you replaced Hazelwood tomorrow with 1.6GW of nuclear, Victoria would be immediately producing the cleanest aluminium in the world and the air quality downwind would radically improve. Australia’s total emissions would fall by 5% — the very figure Rudd was targeting by … 2033.

    It bears considering.

    I’d recommend people interested in such matters take a look at the TCASE (thinking critically about sustainable energy) series at Professor Barry Brook’s Brave New Climate blog. It really is foundational for anyone wanting to get a handle on these matters.

  8. Roger Clifton

    Thank you for the link, but no, you didnt show that “nuclear power is ludicrously expensive”. Far from needing “massive taxpayer support”, nuclear needs a hefty carbon tax – as Ziggy showed (*).

    What d’you mean, “it costs a lot more to operate than renewables”? It doesnt take much imagination to see the army of workers needed to maintain 1 GW of wind turbines or solar PV – plus the necessary ~2 GW-days of energy storage to convert it to baseload. Fifty years later, which system is still providing cheap elctricity?

    Forgot to say, energy storage? So far, storage for renewables is underfunded, experimental engineering, thus inevitably heavily manpowered.

    Where we going to park a tonne of fission products? Underground. Now, where are you going to park the equivalent million tonnes of CO2? We know which question is more important.

    And those long-lived products? Burn them, that’s what reactors are for.

    Decommissioned reactor sites are earmarked for the next power stations, of course. An exception is the containment building for Calder Hall in UK, which now houses a museum for the public to visit.

    Really Bernard, do you think we are a stampeding mob, prefering slogans to facts ?

    (*) UMPNER.

  9. Hazel Davidson

    I think Penny Wong did a good job of working through the practical problems of setting up a comprehensive version of ETS. What she demonstrated very clearly is that it is a lot more complex than a simple statement of how ETS works. She also found that CPRS is so complex that it becomes difficult to explain and difficult to sell when opposed by someone like Tony Abbot. Carbon taxes avoid the variation of the carbon price but they will still need most of the complexities of CPRS if unproductive price increases are to be avoided.
    We could reduce power generation related emissions by leaving the price of dirty power unchanged, setting up contracts for the supply of cleaner electricity and regulating to ensure that priority is given to the use of the cleaner electricity. Under this system the average price of electricity will ramp up slowly as the proportion of clean electricity increases. Under ETS or carbon taxes the price of electricity has to be artificially increased to the point where cleaner alternatives become competitive BEFORE NEW INVESTMENT IS JUSTIFIED.
    Cleaning up electricity on its own would reduce our total emissions by close to 50%. We certainly don’t have to put an artificial price on carbon to keep our emission reduction program on track for many years to come.

  10. Tamo

    “… only to junk it on, apparently, little more than a whim”.

    Obviously a typo.

    Bernard surely ment to type “… only to junk it on, apparently, little more than a whim of the Opposition.”

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