Saturday, April 02, 2011

The green energy economy reconsidered

"Green" energy such as wind, solar and biomass presently constitute only 3.6% of fuel used to generate electricity in the U.S. But if another "I Have a Dream" speech were given at the base of the Lincoln Memorial, it would undoubtedly urge us on to a promised land where renewable energy completely replaced fossil fuels and nuclear power.

How much will this particular dream cost? Energy expert Vaclav Smil calculates that achieving that goal in a decade — former Vice President Al Gore's proposal — would incur building costs and write-downs on the order of $4 trillion. Taking a bit more time to reach this promised land would help reduce that price tag a bit, but simply building the requisite generators would cost $2.5 trillion alone.

Let's assume, however, that we could afford that. Have we ever seen such a "green economy"? Yes we have; in the 13th century.

Renewable energy is quite literally the energy of yesterday. Few seem to realize that we abandoned "green" energy centuries ago for five very good reasons.

First, green energy is diffuse, and it takes a tremendous amount of land and material to harness even a little bit of energy. Jesse Ausubel, director of the Program for the Human Environment and senior research associate at Rockefeller University, calculates, for instance, that the entire state of Connecticut (that is, if Connecticut were as windy as the southeastern Colorado plains) would need to be devoted to wind turbines to power the city of New York.

Second, it is extremely costly. In 2016 President Obama's own Energy Information Administration estimates that onshore wind (the least expensive of these green energies) will be 80% more expensive than combined cycle, gas-fired electricity. And that doesn't account for the costs associated with the hundreds of billions of dollars worth of new transmission systems that would be necessary to get wind and solar energy — which is generally produced far from where consumers happen to live — to ratepayers.

Third, it is unreliable. The wind doesn't always blow and the sun doesn't always shine when the energy is needed. We account for that today by having a lot of coal and natural gas generation on "standby" to fire-up when renewables can't produce. Incidentally, the cost of maintaining this backup generation is likewise never fully accounted for in the cost estimates associated with green energy. But in a world where fossil fuels are a thing of the past, we would be forced — like the peasants of the Dark Age — to rely upon the vagaries of the weather.

Fourth, it is scarce. While wind and sunlight are obviously not scarce, the real estate where those energies are reliably continuous and in economic proximity to ratepayers is scarce.

Finally, once the electricity is produced by the sun or wind, it cannot be stored because battery technology is not currently up to the task. Hence, we must immediately "use it or lose it."

Fossil fuels are everything that green energy is not. Approximately 1,000 cubic feet of natural gas (which cost approximately $4.00) can generate the same amount of electricity as running an average rooftop solar system for 131 days. It is comparatively cheap. It is reliable; it will burn and produce energy whenever you want it. It is plentiful (we use only a tiny bit of oil in the electricity sector). And you can store fossil fuels until you need them.

Proponents of green energy argue that if the government can put a man on the moon, it can certainly make green energy economically attractive. Well, notice that government was not trying to get a man to the moon profitably, which is more akin to the challenge here. Even before the Obama presidency began, about half the production costs of wind and solar energy were underwritten by the taxpayer to no commercial avail. There's little reason to think that a more sustained, multi-decade commitment to subsidy would play out any differently. After all, the federal government once promised that nuclear energy was on the cusp of being "too cheap to meter." That was in the 1950s. Sixty-one billion dollars of subsidies and impossible-to-price regulatory preferences later, it's still the most expensive source of conventional energy on the grid.

The fundamental question that green energy proponents must answer is this: if green energy is so inevitable and such a great investment, why do we need to subsidize it? If and when renewable energy makes economic sense, profit-hungry investors will build all that we need for us without government needing to lift a finger. But if it doesn't make economic sense, all of the subsidies in the world won't change that fact.


Will a UCLA Prof Lose His Job For Sticking to Science Over Politics?

Dwayne Whitney owns a trucking business. He started it decades with only one truck. Since then, his company has grown. Now he has 18 trucks and 20 employees. But that growth may soon be stunted by the state of California. “The State of California says my trucks are killing people,” Whitney told ReasonTV. “What do you say to that?”

The California Air Resources Board (CARB) said this: that the pollution emitted from buses and trucks contributes to 2,000 deaths a year in California.

Rubbish! says UCLA’s Dr. James Enstrom. That number is probably closer to zero, he says. While CARB wants to render Whitney’s trucks illegal, Enstrom has research that could keep Whitney’s fleet on the road.

Enstrom was a member of UCLA’s Department of Environmental Health Sciences and he authored a 2005 study–the largest, most detailed study on the matter to date–on the relationship between diesel particulates and premature deaths. Diesel particulates are a type of pollutant emitted from trucks. The study found no relationship at all between those pollutants and premature deaths.

Was Enstrom rewarded for his groundbreaking research? No. CARB ignored his report and UCLA told him that after 34 years at the school, he was out of a job. So much for academic freedom. “I have felt very intimidated by this process,” Enstrom says.

Adam Kissel of the Foundation for Individual Rights in Education (FIRE) observes that ”The environmental regulation machine in powerful in California….When Dr. Enstrom went up against that machine he was retaliated against.”

Twelve members of California‘s state legislature caught wind of Enstrom’s story and have come to his defense as well. The twelve legislators may “promptly hold a hearing in Sacramento on this matter,“ arguing that ”the integrity of the University of California requires that faculty have the freedom to publish research findings, without fear of potential retribution from those in higher positions.”

Kissel explains over at FIRE’s website:
Twelve members of the California State Legislature have written UCLA Chancellor Gene D. Block and Provost Scott Waugh a letter decrying UCLA’s treatment of longtime Department of Environmental Health Sciences faculty member James E. Enstrom. Professor Enstrom was let go from UCLA after some 34 years under circumstances detailed by FIRE and described in a video released yesterday from

Led by Chief Republican Whip Dan Logue, Assemblymember, Third District, the legislators write that they “remain deeply troubled by the University’s inability to provide credible cause for Dr. Enstrom’s dismissal, and the appearance of political interference in the University’s academic discourse.”

They also raise concerns “as to the integrity of this process,” since UCLA‘s allegation that Enstrom failed to meet his department’s “minimum requirements” appears to have been based on a document dating back to 1995 that Enstrom had never seen and which might not be at all applicable to Enstrom’s position. (I wrote about this document a couple of weeks ago.) The legislators write that “this policy of minimum requirements has neither been enforced with the Department, nor has the document been provided to Dr. Enstrom despite his specific request. This seems arbitrary and capricious and undermines the legitimacy of the Department’s reasons for dismissal.”

Kissel says, “If Dr. Enstrom loses his job because he expressed his academic freedom, then it‘s a message to other researchers that you’d better not rock the boat because you might be next.”


Beware the Plastic Apocalypse!!!

Greenies see Armageddon In Every Plastic Bag

We are told the oceans are covered with floating plastic debris, clogging the ocean food chains and destroying free-swimming wildlife. But solid evidence of this eco-catastrophe is quite thin. And ever since a Canadian high-schooler (and another in Taiwan) in 2009 discovered species of microbes that thrive on eating plastic, most informed observers have been somewhat less concerned.

Since then, scientists in Ireland have begun to put microbes to work digesting waste plastics, and UK scientists have discovered plastic-eating microbes in ocean waters.

The latest story in the long-running ocean apocalypse saga, involves scientists from the Woods Hole Oceanographic Institute in Massachusetts. Woods Hole scientists explored the Sargasso Sea, in search of plastic-eating bacteria.
Mincer and his colleagues examined bits of fishing line, a plastic bag and a plastic nurdle (a pre-production plastic pellet) fished out of the Sargasso Sea, an area of the North Atlantic where currents cause debris to accumulate. The region as a whole contains more than 1,100 tonnes of plastic1.

...Plastic-eating bacteria might help explain why the amount of debris in the ocean has levelled off, despite continued pollution. But researchers don't yet know whether the digestion produces harmless by-products, or whether it might introduce toxins into the food chain.

...Genetic analysis shows that the bacteria on the plastic differ from those in the surrounding seawater or on nearby seaweed, says microbiologist Linda Amaral-Zettler of the Marine Biological Laboratory, Woods Hole. So far, the DNA sequences obtained by her lab show that almost 25% of the bacteria on one polyethylene surface were vibrios, bacteria from the same group as the cholera bacterium.

...Amaral-Zettler and Mincer also found genetic and microscope evidence of eukaryotes — organisms with more complicated cells than bacteria — on the plastic. What she calls the "plastisphere" might contain complex living communities. "It may be a little world that we've created, for better or worse."

It is fascinating that particular ocean bacteria have adapted to using plastics as a food source. This is all quite reminiscent of the bacteria that have adapted to eating crude oil and methane gas around oil spills and and natural hydrocarbon seeps in the ocean floor.

To the bacteria, our discarded plastics are a feast and a windfall, allowing them to feed and reproduce to their microbial hearts' content. Of course the same phenomena occurs on land, except with a much wider range of microbes -- both prokaryotic and eukaryotic -- partaking of the cornucopian repast.

Environmentalists are concerned that the microbes may be releasing toxins into the seawater which will pollute larger sea creatures and perhaps get into the human food chain. A plastic apocalypse on the prowl, don't you see? And yet, in the middle of the ocean, nothing is wasted. If something can be seen as food, it will be used as food by something. That includes anything which humans may perceive as toxic.

Here is the amusing thing in all this: Waste plastics are increasingly being seen as valuable feedstocks in the production of synthetic fuels, chemicals, and other high-value substances. Gasification of solid wastes for production of power, process heat, and chemical/fuel feedstock is just getting started in the developed world. In the future, the only plastic wastes the oceans will see will be coming from places too primitive to know how to unlock their intrinsic value.

And no doubt there will be plenty of plastic-eating ocean microbes to take care of those remnants. Otherwise we will need to raise our seawalls quite high, to avoid the ocean plastic tsunamis that may come from Neptune, with a crashing vengeance.

Beware the plastic apocalypse.


Chevy Volt Sales Slump badly, GM Asks for Government Handout

Recent reports find that General Motors (GM) is lobbying for the passage of legislation by Michigan Senator Debbie Stabenow that would turn a $7,500 electric vehicle tax credit into a rebate that will be available to all consumers at the point of sale. It’s been dubbed “Cash for Clunkers II”.

Right now, the $7,500 tax credit can only be redeemed at the end of the year when taxes are filed, and are applicable to purchases of the Chevrolet Volt. Apparently, Chevy is not pleased with its sales — 321 units sold in January and 281 in February — out of 30,000 cars made for 2011, and a planned 45,000 to be made in 2012.

At that rate, just 3,600 of the cars will be sold this year, 12 percent of the supply. Will the additional 45,000 even run off the assembly line?

The asking price of $41,000 for the Volt, or $33,500 even with the tax credit is the likely culprit for the poor sales. Plus the fact that the car can only go 100 miles before needing to be recharged hardly makes it an attractive investment. Put simply, consumers are being asked to pay more for something that is of less quality.

That alone might explain why GM thinks the current tax credit is insufficient. But it’s only half the story.

Since GM’s initial public offering in November, the government sponsored automaker has been desperate to boost overall sales on a monthly basis. As such, GM boosted buyer incentives for the past four months. GM’s incentive spending averaged about $3,663 per vehicle in January, and $3,732 in February, more than $1,100 over the industry average.

According to the, “That’s increased GM’s market share — albeit at the expense of image, resale value, and even company profits — oddly, at a time when most other automakers have admitted that such a strategy doesn’t make long-term business sense.”

So, in March the additional spending incentives came to an end, with GM announcing that it would be returning buyer incentives to the industry average. Unfortunately, according to MSNBC’s Dan Carney, “the word in the industry is that sales slumped in March once the incentives expired.”

That does not bode well for GM. Apparently, the only thing keeping sales figures up has been massive buyer incentives — which, considering the U.S. Treasury’s 33 percent stake in the company, are effectively another form of government subsidy.

So, they can’t keep giving the incentives out because they are destroying what it left of the GM brands and it is becoming increasingly hard to hide the fact that they are losing on each car because they are, in effect, rebating back their profits to consumers in order to move the metal.

So, they have had to cut the incentives, tank the sales and now are throwing the ball back into Barack Obama and Congress’ court with Cash for Clunkers II to boost sales of the Volt. They are hoping that Uncle Sam cutting a $7,500 check at the point of sale will make a difference.

Whether it would or not, this just another bailout for GM — better known as Government Motors — and the UAW that helped to bring the company to its knees in the first place. If the Chevy Volt cannot be sold on its own in a profitable manner in the marketplace, then taxpayers should be under no obligation to give GM corporate subsidies for an inferior vehicle.


Fast train to nowhere

Experts agree that the most successful rail corridors in Europe and Japan are those linking major cities 100 miles to 400 miles apart. What many studies neglect to mention, however, is that those cities are highly concentrated, with major fractions of their jobs in a traditional "central business district," unlike the large majority of decentralized U.S. metro areas. So most people there do want to go downtown-to-downtown, whereas most Americans need to travel suburb-to-suburb.

Countries such as France, Italy, Spain and Japan are also more attractive for high-speed rail because the cost of driving there is so much higher. Not only are gas taxes three to five times higher, but most of their intercity highways are toll roads. In addition, America has the world's most competitive airline markets, so our cost of flying is also lower.

Measured against international criteria, only a handful of U.S. corridors — Boston-NYC-Washington and maybe Los Angeles-San Francisco — are potentially good candidates for high-speed rail. But even here we must question the value proposition.

Amtrak estimates it would cost $117 billion to build true high-speed rail in the Northeast Corridor. Yet its own numbers show an annual operating loss of more than $350 per passenger if annualized capital costs are included.

The California project is now estimated to cost $66 billion — about twice what Warren Buffett paid for the (profitable) Burlington Northern Santa Fe railroad. Reviews of projected ridership in California suggest the project would not even cover its operating costs, let alone the enormous construction cost.

But shouldn't the federal government do for high-speed rail what it previously did for highways, airports and seaports — i.e., pay for and build the infrastructure and let private parties operate it? Those making this argument forget that our intercity highways, airports and seaports are self-funded. User taxes and user fees (tolls) cover both the capital and operating costs of these major transportation infrastructures.

By contrast, high-speed rail is like urban rail projects in which general taxpayers, not users, are asked to cough up the hundreds of billions in capital costs needed to make these uneconomic "investments."

At a time when federal and state governments are living beyond our means, they should not be pouring taxpayer money into high-speed rail.



Four articles below:

Carbon pricing could add $860 to annual household bills, Treasury documents show

THE carbon tax Prime Minister Julia Gillard promised never to introduce will cost average families $860 a year, Federal Government modelling has revealed.

Based on a carbon price of $30 a tonne, families would pay up to $218 more for electricity, $114 for gas, $187 for petrol and $88 for food, The Daily Telegraph reported.

Treasury documents, released under FOI, revealed households would pay the fixed price for between three and five years (before moving to an emissions trading scheme), leaving families with a bill between $2589 and $4315 over that time.Heavily censored documents claim price rises would "drive household behaviour change, with households substituting to less carbon intensive goods over time".

But it was acknowledged in a Treasury executive minute last October that low-income families would suffer the most because they spend more on things like electricity and are least able to afford low emissions technology.Treasury also raised fears the tax would reduce people's wealth.

"A carbon price will also affect wealth as the change in prices flows through to the value of financial assets, including shares, and reduces the real value of savings," the minute states.

It also shows the Carbon Pollution Reduction Scheme proposed in 2009 by former PM Kevin Rudd would have raised electricity prices by a maximum $120 a year and gas by $52 - half the cost of the Treasury estimates now.

"This just demonstrates that the Government has known all along that its carbon tax won't clean up the environment but it will clean out your wallet," Opposition Leader Tony Abbott said.

Treasurer Wayne Swan hit back yesterday, claiming the figures were preliminary numbers and he said he could not nominate how much assistance families would be given by way of compensation.

"Until the final design and modelling have been settled, anyone who uses these figures to scare families about prices is engaging in a scare campaign," he said.

The Government is reportedly considering tax and welfare breaks of between $600 and $1500 a year.

It comes as an exclusive survey by The Daily Telegraph reveals why voters are so angry about the proposal. A quarter of the 2500 households surveyed said they were already struggling to make ends meet and almost 9 per cent said they didn't have enough money to pay bills.

"I think it might be an unnecessary tax, I could probably do better with the money in my pocket and make a concerted effort to reduce my carbon emissions, rather than be taxed," Greg Hudson, 32, from Neutral Bay, said yesterday.


Labor at war with climate adviser Ross Garnaut

ENERGY Minister Martin Ferguson has slapped down the government's chief climate change adviser, Ross Garnaut, flatly rejecting calls for more regulation on electricity markets and warning that mandatory renewable energy targets are pushing up power prices.

Mr Ferguson rejected Professor Garnaut's claims that electricity price rises were a result of "gouging" by electricity generators.

The senior cabinet minister said electricity prices had risen because of costs in replacing ageing plants and he warned that prices would rise by 30per cent in the next three years because of investment costs, a carbon price and the mandatory target for renewable energy generation.

Mr Ferguson and the Australian Energy Market Commission both warned that the government's compulsory target of 20 per cent electricity generation from renewable sources by 2020 was coming at a "cost to the community" and could "challenge" the national electricity grid.

Professor Garnaut this week recommended coal-fired power electricity generators not be compensated for a carbon tax and that a new energy regulator be formed.

At an energy conference in Melbourne yesterday, Mr Ferguson said Professor Garnaut had a role in advising the multi-party climate change committee, which includes the Greens, but he "does not speak for the government, nor for the Ministerial Council on Energy", which represents every government.

Mr Ferguson's comments come as the Labor government fights with the Greens over "extreme" policies.

It has also indicated that compensation for industries for a carbon tax will be the same as that offered in 2009, a policy the Greens voted against on the grounds it was too generous.

Mr Ferguson said: "The regulatory framework for Australia's energy sector is leading edge, and as such the Ministerial Council on Energy and the energy market bodies often review different aspects of our regulatory environment to ensure it delivers optimal outcomes for the community.

"Residential electricity prices have increased by about 40 per cent over the last three years and are forecast to increase in the order of 30 per cent in the three years to June 2013. As those who study these issues will know, there is no quick fix to rising prices.

"Prices reflect the cost of investment to maintain and replace ageing assets to ensure the community gets the reliability it has come to expect. We must ensure investment occurs to reduce emissions and meet demand, while importantly, maintaining sufficient competition and avoiding concentration in the sector."

Professor Garnaut this week released his final report on climate change for the government and said the owners of the transmission and distribution networks were overinvesting in their assets to increase their returns.

Calling for an urgent inquiry into power sector regulatory arrangements, Professor Garnaut said the current arrangements had allowed too high a rate of return for power companies, which "increases electricity prices that (are) just passed right on to the consumer".

He put the cost of a carbon tax on electricity prices at $4 to $5 a week for the average household and called for an urgent inquiry into what he believes is a "prima facie" case of excessive increases caused by electricity regulation in Australia.

Professor Garnaut conceded there might have to be commonwealth loan guarantees to keep high carbon emitting generators operating if they failed financially under the proposed carbon tax from July 1 next year.

Mr Ferguson said the nation's energy ministers tried to keep "away from the spotlight of the daily media cycle". "It is not in the public interest to trivialise these matters in a high level public debate over the network regulatory regime," the Energy Minister said.

"The market bodies and institutions already exist and have responsibility for finding the appropriate balance between reliability and value to the community.

"Trying to suppress prices ultimately leads to pain in the future when catch-up is required, as some jurisdictions are now finding."

Mr Ferguson said that, as Australia moved towards a price on carbon, "we have to be very mindful" of damaging asset values of power generators because these financial considerations can have "real energy security and market stability implications". "I am also conscious of the imminent refinancing requirements of the generation sector, with an estimated $6.4bn needed to be refinanced prior to the end of 2012.

"The expanded Renewable Energy Target, through supporting wind capacity, has delivered significant new investment over the last 15 months.

"The expanded Renewable Energy Target is effective in displacing generation investment that would otherwise come from non-renewable technologies; however, it is doing this at a cost to the community," Mr Ferguson warned.

"The fact remains that if we are hoping to achieve abatement from the electricity sector we will need to see significant investment in new generation capacity in the years ahead. At some point in the future we will need additional investment in baseload capacity."


Background on an Australian "Green" senator

Being Green is the way to get on in politics for a far Leftist. She's a Trot so the fact that she disowns Stalinism means nothing. The Trots and Stalin never did get on. Before Stalin rose to power, however, Trotsky led the Red army and murdered hundreds of thousands

AS the child of Australian communists and a former member of the Socialist Party, Greens senator-elect Lee Rhiannon insists she's been unfairly tagged as a hardline left-winger or "watermelon" -- green on the outside but red inside.

She says her parents were among many Australians who became disillusioned with Moscow after Soviet tanks crushed Czechoslovakia's move towards "socialism with a human face" in 1968.

That was when the Communist Party of Australia formally split from the Russian communists.

Ms Rhiannon is the daughter of women's rights activist Freda Yetta Brown and Bill Brown, who were both CPA members.

She has insisted that her parents joined the CPA because of their deep commitment to social justice and equal rights and not for any subversive reason.

But the association was enough to have her feature in an ASIO file when she was just seven years old.

During last year's election campaign, Ms Rhiannon insisted that she would support Bob Brown's pragmatic approach to politics, and said she had no wish to lead the party.

"I am not a communist," Ms Rhiannon told The Weekend Australian in August. "I and Greens members condemn the crimes committed under Stalin."

She strongly denied then that she wanted to steer the Greens towards a more radical agenda and said dealing with climate change was her priority.

Ms Rhiannon, 59, was elected last year to one of the six NSW seats and will join the Senate in July. She joined the Greens in 1991 and was elected to the NSW Upper House in 1999.

Among her priorities in the Legislative Council were better public transport and a ban on the building of any new motorways.

In the 1970s she was arrested during anti-apartheid protests and in the 1980s she helped organise the peace camp outside the joint US-Australian intelligence facility at Pine Gap in central Australia.


Eight myths of a carbon tax

Even a Warmist (below) can see that the arguments for an Australian carbon tax don't stack up

1. The greatest myth is that if we lead the world in carbon pricing the rest of the world will follow. We produce 1.5 per cent of the world's CO2; China and America account for 40 per cent. A 5 per cent reduction in Australia's emissions would be cancelled out by as little as a 0.3 per cent increase in China's emissions.

2. Another myth is that we have to lead the world because we are a carbon-based economy and will be more affected when and if the world introduces carbon pricing. Our carbon-based economy is one of our main competitive advantages. To lead on a carbon tax puts our industry at a serious disadvantage against our competitors.

Eighty per cent of power is generated from coal. This low-cost power has underpinned our standard of living by encouraging manufacture and giving low-cost electricity to consumers.

A carbon tax on imports from countries without CO2 pricing is unworkable. We would need to significantly increase the Customs Department and we would still be at risk. Such a move would undo the hard won reforms of the 1990s.

3. Another myth says if we introduce the tax now it will give industry time to adapt. Industry needs years to make the investment to meet the new environment. Planning approval alone can take four or more years. The logic of starting a carbon tax in barely 12 months' time has not been thought through; five years would barely be enough.

It would be better to advise industry that CO2 will be taxed at about $50/$60 a tonne in 10 years' time when our trading partners also start to price carbon and industry should start to adjust its long term capital plans and debt financing accordingly.

The rise in the cost of fossil fuels is already affecting local prices. We must be careful not to hit the domestic and business consumer with a double whammy. If the domestic price for gas continues to rise the price for CO2 will have to rise further to force the change from coal to gas generation.

4. Another myth is that Big Business should have known a carbon tax was coming and should have been prepared. Most of our coal-fired power stations were built and owned by state governments. The taxpayer is the largest single owner with 36 per cent capacity overall, 54 per cent in NSW and 67 per cent in Queensland.

The recent sale in NSW was at a deep discount to the replacement value because of the threat of carbon pricing; NSW taxpayers virtually lost their equity on the threat of a tax.

In Victoria power stations were sold at huge prices largely to foreign investors expecting a proper electricity market that never eventuated. The owners invested in good faith with the reasonable expectation that if a price were put on CO2 they would be given adequate notice and compensation.

Indeed, CO2 trading in Europe, the obvious precedent scheme, was accompanied by the issue of close to 100 per cent free permits to the power generators for the first decade. If we can purchase permits globally as planned why not adopt common measures with the EU?

To say to government and private investors that the federal government will wipe out your equity without compensation is patently unfair. It will introduce a dangerous level of sovereign risk for long-term investment in Australia.

5. Then there is the myth that we are morally obliged to lead the way because we generate a larger proportion of carbon dioxide a head of population. Yes we do, but there are good reasons for this. We are rich in resources such as coal, iron ore, bauxite and uranium. It gives us one of our few competitive advantages.

We also have a significant agricultural sector and are a large exporter of beef and lamb, which are high CO2 emitters. Given the size of the country, our transport consumption is higher than more densely settled economies.

Exports contribute to more than 30 per cent of Australia's carbon emissions. If we want to cut emissions sharply, should we just stop exporting?

6. Closer to home is the myth that the carbon tax will hit the so called 1000 big polluters and consumers will be protected. In the end the consumer, whether local or overseas, will always pay. If the cost is not passed on, trade exposed industry in particular will either fail to survive (and jobs will be lost), or move elsewhere (loss of jobs again).

The other illogicality in this myth is that the consumer should be protected. If the government wishes to discourage the production of CO2 then the end consumer must be sent a price signal.

The concept of charging the big emitters and passing the proceeds back to the consumer is fatally flawed. The big emitters will reduce emissions or be forced out of the economy. Then there will be no money for compensation and the shock will be large.

7. Then there is the myth that renewable energy can replace coal and gas-fired energy production without a substantial cost to the consumer or business.

Putting aside the serious issues of reliability, availability and transmission, the cost of all of the available renewables, such as wind, is far higher than coal.

8. And then there is the myth that a carbon tax or ETS will force the same big polluters to invest in alternative technologies that will create jobs. The expectation that investors who have seen their investment seriously impaired by a carbon tax will race to invest in new high-cost technologies is illogical. Banks won't lend to the impaired incumbents.

Where is the plan for what Australia will look like in 2020 or 2030? Will we still have an aluminium or steel industry or any form of processing requiring energy such as food or an agricultural sector?

California legislated to introduce a cap and trade scheme in 2006, with effect from 2012. There has been no explosion in green jobs there and unemployment stands at 12.5 per cent. Jobs have simply moved across state borders.

Global emissions are a global problem. A global solution is the only answer. If we reduce our carbon emissions unilaterally there will be no benefit to the global environment.

What is the negotiation benefit of giving away our hand now, when we should be seeking to agree an emissions trajectory for Australia as part of a global deal?

This is a momentous decision and we appear to be relying on a business and investment community that we are proposing to punish. A cross your fingers approach is just not good enough when we are considering the very basis of our economic future.



For more postings from me, see DISSECTING LEFTISM, TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, POLITICAL CORRECTNESS WATCH, FOOD & HEALTH SKEPTIC, GUN WATCH, AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL and EYE ON BRITAIN. My Home Pages are here or here or here. Email me (John Ray) here. For readers in China or for times when is playing up, there are mirrors of this site here and here


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