Monday, July 11, 2011

Sieg Heil, Stephen Chu!

Steven Chu was a co-winner of the Nobel Prize in Physics in 1997. That he developed methods to cool and trap atoms with laser light does not mean he understands economics, consumer choice, or politics. A Nobel Prize does not even guarantee common sense. Often it guarantees the opposite.

In a Friday conference call with reporters, Chu argued against a House bill that would repeal a 2007 federal law outlawing incandescent bulbs. Many Americans object to being told that must buy the fluorescent, halogen, and LED bulbs starting in January of 2012 as dictated by federal law.

Chu argued the more-efficient bulbs mandated by Congress save consumers money over the bulb’s life even though the up-front price is higher. Chu defended Congress’s right to dictate what kind of light bulb Americans buy because:

“We are taking away a choice that continues to let people waste their own money."

There are many things that cost more up front and “pay for themselves” in terms of longer life or lower operating costs. Think of insulation which costs a bundle but lowers utility bills, or electric cars that costs $10,000 more but save on gas. So far, we have allowed the people themselves to decide: More money now, but less later? Or: Less money now and more later? That is my or your decision.

The choice of light bulb is a classic problem of economic choice over time. Consumers, who place a high value on money now, do not buy insulation, electric cars, or fluorescent lights. We have different time preferences. People who pass on insulation, electric cars and fluorescent light bulbs are by no means wasting their money. They are making choices that are perfectly rational for them.

This basic point of economics escapes Nobel laureate Chu.

Which light bulb is better for you is not an easy calculation. The compact fluorescent costs about six times more and contains hazardous mercury, but lasts six times longer and saves energy. There are also matters of taste and aesthetics. Some will find the new light bulb shape ugly. Others will not like the light it emits, but there will no longer be any choice. Just like we lost Freon in 1995, we will lose Edison’s light bulb in 2012.

Chu says the state should make the choice of light bulbs for you, but why should he stop there? Why not insulation or which car to buy?

Welcome to the Nanny state.


Green Projects Are Hogging Resources

The environmental left has been relentless with their efforts to shape public policy and opinion in favor of renewable energy sources while waging all out war on the oil, natural gas, and coal industries. Over the last several decades, the radical left has convinced politicians as well as the voters to support vast amounts of taxpayer funded research, direct subsidies of green technology, and more recently mandated use of green energy sources.

But green projects, proposesd in the name of conserving resources, are really resources hogs.

It seems that whenever the smart guys in government implement policies to save us from ourselves and make the world a better place, we get stuck with the bill as well as a whole new set of problems that they created. As time passes, the body of evidence continues to mount that much of the radical left's claims were overstated, half-truths, and in some cases outright lies.

Just in the last few days, we came across the following four reports that show yet again that all the homage paid to the green gods has not resulted in the benefits promised, and often creates a whole new set of problems.

Outsourcing Carbon Emissions

The global warming alarmists have long promoted government policies designed to reduce a given nation's total greenhouse gas emissions. That was an objective of the Kyoto Accord, and indeed, considerable hoopla surrounded a claim that since 1990 developed nations had reduced emissions by 2 percent. But, as is often the case, there is more to the story.

H. Sterling Burnett of the Heartland Institute reports on the findings of a study conducted by the Centre for International Climate and environmental Research in Oslo, Norway that "emissions from increased production of internationally traded products have more than offset the emissions reductions achieved under Kyoto Protocol."

As developed nations began manufacturing less and importing more of the goods they consumed they were effectively outsourcing emissions to foreign countries; typically nations with environmental standards below the participants in Kyoto. China alone accounts for 75 percent of the world's outsourced emissions and 75 percent of the growth in global emissions during the past decade. With an export-based economy, China produces far more emissions that any other nation.

When the emissions from the manufacture and transport of imported goods are figured into the equation, the study found that total global emissions from the developed nations actually increased as much as 12 percent since 1990, rather than the 2 percent decline often cited. "This shows the difficulty in reducing emissions overall," according to Myron Ebell, director of energy and global warming policy at the Competitive Enterprise Institute. "It's like squeezing a balloon – squeeze on one end, and the other end blows up."

Economic Benefits Outweigh Environmental Impacts of Shale Drilling

The radical environmentalist's favorite new target is the technology called hydraulic fracturing (fracing) that has been around since the 1940s and used on millions of oil and gas wells to unlock trapped energy reserves. Radical leftists claim fracing could pose grave environmental risks, particularly to water. However, several exhaustive studies by the EPA determined that the fracing poses "little or no threat to (underground drinking water)." Further, the EPA could find "no confirmed cases" of water well contamination or underground movement of the fracing fluid. None of that has stopped the lefties who aren't about to let the facts get in their way. Their objective is to shut down the whole fossil fuel industry.

As with virtually any human activity, there is some degree of environmental surface impact and the occasional accident does happen when wells are drilled. Three researchers at the Manhattan Institute in New York decided to analyze the real amount of risk compared to the backend reward for increased domestic production.

The scientists studied the Marcellus shale region in Pennsylvania where fracing has been used extensively for over 60 years. They found that the "typical Marcellus shale well generates about $4 million in economic benefits while generating only $14,000 in economic damages from environmental impacts." That is a ratio of 1:285. Almost anybody would jump at the opportunity for that kind of return on investment. But, then, the anti-oil and gas crowd is also the anti-free market capitalism crowd. They pretty much just dislike everything that makes sense for America.

Renewable Energy Sources Require Vast Amounts of Natural Resources

What's wrong with this picture? Green energy was supposed to purify us of our decadent ways and make us more responsible stewards of our natural resources.

For sure, the two most obvious renewable energy resources available are wind and sunlight, and they are free and continuously replenished. But, the conversion of them into large amounts of energy requires vast amounts of natural resources, most notably land.

In an op-ed for the New York Times, Robert Bryce of the Manhattan Institute analyzed ramifications of California's highly ambitious mandate that will require one-third of all the state's electricity come from renewable sources by 2020. Bryce put a pencil to the challenge.

One third of California's electricity is about 17,000 megawatts. Bryce supposed that California's mandate might be split evenly between solar and wind. That's a bunch. Already under construction in the Mojave Desert is the $2 billion Ivanpah solar plant. It will cover 3,600 acres of land; about 5 ½ square miles. When complete it will provide just 370 megawatts. To meet just half of the mandated requirement of the new legislation – 8500 megawatts – 23 Ivanpahs would have to be built covering 129 square miles, about five times the size of Manhattan.

The enormous land requirements for a renewable energy facility create additional environmental concerns. For example, in April, the Bureau of Land Management ordered a halt to construction at Ivanpah out of concern for the desert tortoise, which is protected by the Endangered Species Act.

If the other half of energy required by California's renewable mandate comes from wind generation, the land requirements are even greater. The Roscoe wind farm in Texas covers 154 square miles and has a capacity of 781.5 megawatts. At that rate, California would need 1,675 square miles covered with wind turbines. That's considerably bigger than the entire state of Rhode Island.

In addition to California, 28 other states (including my Colorado) have adopted mandated requirements for renewable energy sources. "In the rush to do something – anything - to deal with the intractable problem of greenhouse gas emissions, environmental groups and policy makers have determined that renewable energy is the answer," Bryce says. But, he adds, in doing so they have "thrown in the ditch" was the deeply held essence of environmental protection advanced by the economist E. F. Schumacher; "Small is beautiful."

To be true to the stated objective of reducing greenhouse gases and true environmental stewardship, Bryce says policy makers and activists "must exploit low-carbon energy sources" – natural gas and nuclear power. "They have small footprints," he concludes.

Biofuels Responsible for Surge in Food Prices

Food prices are escalating in the U.S. and that's a problem, particularly for the increasing number of families that are cash strapped. However, globally the price escalation of basic commodities has international agencies like the United Nations warning of a food crisis. Analysts are trying to figure out what is behind the rapid surge in prices.

According to Timothy Searchinger, a research scholar at Princeton University, supply isn't the problem. In the July 2011 issue of Scientific American, Searchinger says the spike in prices is almost totally due to demand created by government mandated use of biofuels.

Since 2004 biofuels from crops have almost doubled the rate of growth in global demand for grain and sugar and pushed up the yearly growth in demand for vegetable oil by around 40 percent. When crops like corn and soybeans utilize more acreage, it restricts acres normally dedicated to other crops driving up those prices, too. In the U.S. about 40% of all corn is used for ethanol production.

"Our primary obligation is to feed the hungry. Biofuels are undermining our ability to do so," Searchinger determined. "Governments can stop the recurring pattern of food crises by backing off their demands for ever more biofuels."

We've dedicated numerous columns to the problems and myths surrounding the false promises and unintended consequences of chasing the renewable energy gods and ethanol, in particular. Government mandates have artificially raised the price of food, farm land, and fuel. When the bubble finally bursts, it won't be the politicians and environmentalists who get burned, it will be the innocent families that got stuck with the bill and farmers left holding the bag when the inflated prices collapse.


Stuck On "Stupid Liberal" Mode


My dad builds custom homes in California and the regulators at all levels routinely give him new, maddening impediments to practicality. The example that I remember most had to do with toilets.

In response to the apparent public outcry about excessive tank capacity, sales of toilets that exceed 1.6 gallons per flush have been banned throughout America. United States Senator Rand Paul recently told a senior bureaucrat at a Senate hearing, “Frankly, my toilets don’t work in my house, and I blame you.”

If you are like Senator Rand and don’t think that it makes sense to have to flush twice to make up for a deliberately insufficient vortex, you can buy a Canadian-made 3.5 gallon toilet on the black market. Can you imagine having that crime on your rap sheet?


The government’s Office of Energy Efficiency and Renewable Energy (EERE) at the Energy Department also thought it would be really swell if Americans would use less electricity to match their new toilets. So, they made some suggestions, through nationwide mandates, that we replace our bright, warm, inexpensive light bulbs with compact fluorescent lighting (CFL).

CFLs don’t lend as much ambience, they are vastly more expensive, and they take a while to warm up before they can perform their singular purpose in our lives. But, they do provide an element of mercury for you to deal with when they burn out or break.

The Environmental Protection Agency recommends that, if your CFL light bulb breaks, first get all people and pets out of the room, shut down your air conditioner for several hours (another excellent suggestion for saving energy), and thoroughly collect every bit of glass and powder into a sealed container.

The government’s Energy Star program argues that this mandate actually reduces mercury emissions in American households because CFLs demand less electricity from mercury-generating coal plants that poison the fish we eat.


About a year ago, I called the manufacturer of our dishwasher with a performance complaint. The 10-month-old appliance was simply no longer getting the dishes clean. The repair guy approached the situation like the main character on the TV show House.

His assessment was that all three name-brand detergents we had on hand were too low on phosphates to get the job done. It turns out that ours is one of millions of households victimized by the latest regulation - low detergent phosphates. We now dump in twice the normal amount of detergent and set the cycle to “stupid liberal mode” which runs the dishwasher for nearly three hours, using 50% more water and electricity.


It is hard to believe that these busybody bureaucrats are simply trying to improve the environment. Evidence to the contrary includes the results of an investigation by the Government Accountability Office. They received an Energy Star label for their application of a gas-powered clock radio (really).

With a full staff of uniformed gropers at every airport, Obamacare and government controlled thermostats on the horizon -- I mean, if one were to undertake the goal of listing the most personally intrusive acts that a government could commit against its people, I think this list would just about be it.

With their hands in my pants, my physical health, my home, and even my toilet, I have never felt so uncomfortably close to my government.


British power bills to soar by 30% in 'green’ reforms

Household electricity bills will soar by 30 per cent to pay for “green” measures being announced this week by Chris Huhne, the Energy Secretary, according to experts.

Costly new incentives to encourage energy companies to invest in renewable power sources such as wind farms will put an extra £160 a year on the average household bill over the next 20 years.

The huge rise is on top of drastic increases in bills being faced already by consumers. Last Friday British Gas, which posted profits of £742million last year, announced gas price rises of 18 per cent, which followed Scottish Power saying it would increase rises of 10 to 15 per cent.

Mr Huhne is expected to announce on Tuesday that energy companies, such as Centrica and EDF, will get a fixed price for electricity generated from nuclear power and wind farms, which will be higher than the market price.

The financial incentives will be funded by consumers, who will see their electricity bills rise by 30 per cent over the next 20 years from an average of £493 per year to £655 per year.

Experts predicted that single pensioners will be the hardest hit by the changes, because power bills represent a higher proportion of their income than for any other group.

The price-rise calculation does not include the effect of power companies’ recent charging announcements which have seen electricity bills soar to their highest ever levels for millions of customers.

Dr Michael Pollitt and Laura Platchkov, experts from the University of Cambridge and the Energy Policy Research Group, said in a report: “A 47pc increase in electricity unit costs, envisaged under the electricity market reform, would send UK electricity prices towards being the highest in the European Union.”

Their research for the Consumers’ Association concluded that the worst hit sector of society will be single pensioners.

The costly package due to be outlined in full this week is designed to reassure generation companies that Britain is an attractive place to build nuclear power stations and wind farms.

Mr Huhne admitted in an interview with The Sunday Telegraph last year that there was no money available for direct state subsidies for a new generation of nuclear plants, so this week’s announcement sets out how consumers will shoulder the cost of incentives directly.

The changes to be outlined by Mr Huhne this week will hand billions of pounds in subsidies to the energy companies and kick-start a construction programme creating thousands of jobs.

But combined with further green taxes, such as the European emissions trading scheme, and upgrades to Britain’s national grid the measures could see Britain’s gas and electricity bills rise by 50 per cent - or £500 per average household bill - according to Ofgem, the energy regulator.

It is understood the Government will not set the exact level of the subsidies on Tuesday. But it will confirm the mechanism is likely to be a “contract for difference” model which effectively imposes a surcharge on bills to make market prices attractive for new investment in wind and nuclear power.

But opponents claim wind farms are blighting the countryside while failing to deliver a reliable supply of electricity.

It is also understood that Mr Huhne’s long-awaited announcement on energy policy will delay a separate subsidy for power station owners, known as capacity payments, while there is further consultation.

It is understood there have been disagreements in government over whether the incentive should be given to all technologies, including coal and gas, or just low-carbon ones like nuclear and wind farms.

The Government last night insisted that leaving the electricity system as it is would be more costly in the long run. It believes switching to nuclear and wind makes sense because European Union-led taxes on gas and coal power generation will increase the costs of fossil fuel generation.



Just announced in Australia. It's just a particularly destructive class-war tax with millions of above-average earners hit. That's a lot of votes to risk. And every price-rise henceforth will now be blamed on it! There will be opportunistic price-rises everywhere. Epic fail!

Five current articles below

Hardest hit by carbon tax is Australia's largest city

As Julia Gillard begins her campaign across western Sydney this morning to sell her plans for the new emissions trading scheme, the Prime Minister has told Australians petrol and agriculture will never be included in the cost of carbon tax.

"The only plan to add an additional piece to who pays for carbon pollution is to bring the heavy vehicles into the scheme," Ms Gillard said on Sunrise today. "There will be no carbon tax on petrol or agriculture ever."

Struggling Sydney families will bear the brunt of the tax, which will increase electricity bills by 10 per cent, gas by 9 per cent and the cost of food and groceries by almost $1 a week.

The government will embark on a $15 billion spending spree today to compensate low-income earners but almost 2 million households will still be out of pocket. "We are asking those families to do their bit to combat climate change," the Prime Minister said.

"Overwhelmingly Australians believe in climate change...and overwhelmingly they want the government to act. "Putting a price on carbon is the cheapest way of cutting pollution and that's why we have designed the scheme the way we have."

Despite the increases, families have been promised they will "forever" be safe from paying more for petrol because of the new tax.

Eight million Australian households will receive cash assistance under a carbon tax - but middle-income Sydney families will bear the burden. Ms Gillard admitted yesterday about 700,000 households would receive no compensation or tax cuts to cover an average $10-a-week rise in the cost of living.

It came as the Prime Minister announced an ambitious new target to reduce Australia's carbon emissions to 80 per cent below 2000 levels by 2050.

The major reform to the marginal tax rates will be to cover an estimated 10 per cent price rise in electricity bills, a 9 per cent rise in gas, and food and grocery rises of less than $1 a week as a result of a $23 charge for every tonne of carbon produced by the country's top 500 polluters. Airfares will also rise, with the aviation fuel excise to be increased.

The overall compensation package will end up costing more than the revenue from the tax for the first four years.

There are clear winners. Amid a complex arrangement of changes to the tax and family payment systems, a new clean energy supplement will provide pensioners with a 1.7 per cent rise, or $338 a year extra.

And $1.5 billion in payments will be made before the tax even kicks in on July 1 next year. Families who qualify for Family Tax Benefit Part A will receive an extra $110 per child. About 280,000 self-funded retirees who are Commonwealth Seniors Health Care Card holders will get the same amount of help as age pensioners.

The tax changes will come by tripling the tax-free threshold from $6000 a year to $18,200 a year [Itself a long overdue reform], which will mean almost four million low-income earners come out in front with the addition of a 20 per cent buffer payment over and above the tax rises.

But the sting comes for almost two million households which will end up out of pocket, being only partially compensated for a 0.7 per cent increase in the cost of living - or receiving no assistance at all.

The compensation package will leave a double-income family in Sydney with two children earning $120,000 of combined income $400 a year out of pocket after tax cuts due to cost of living rises of about $700 a year.

Dual-income $150,000 families with two kids will be $506 worse off under a carbon regime. A single-income family on $65,000 a year with a child under five will also end up worse off.

"We have made choices based on who needs assistance the most. Tax cuts and assistance have been pitched at families earning less than $150,000," Ms Gillard said. "What that means is there is no money tree ... there is no endeavour to try and pretend that everybody will be better off or everybody is in the same position.

"There are some Australians who are not getting tax cuts and family assistance sufficient to compensate them for the likely impact of carbon pricing on them. "We have structured it deliberately so we are assisting lower-income families and middle-income families ... putting assistance where it is needed the most."

The carbon tax will begin at $23 a tonne from July 1, rising to around $25 a tonne by 2015 when the tax converts to an emissions trading scheme (ETS). The government admitted the price could hit $50 a tonne under an ETS, depending on world prices.

Climate Change Minister Greg Combet said the environmental benefit would see more than 50 million tonnes of carbon cut by 2020 - the equivalent of taking 45 million cars off the road.

To achieve its long-term goals, the government will have to buy 100 tonnes of carbon abatements from Europe to meet its targets.

About 500 businesses will be forced to pay for their pollution, from which more than half of the revenue raised will be spent helping Australian households.

The government said it would also negotiate the closure of some of Australia's worst polluting electricity generators before 2020 and replace them with cleaner energy.

Opposition Leader Tony Abbott said millions of Australians would be worse off under the tax: "You have to ask yourself, what is the point of all of this? It will drive up prices, threaten jobs and do nothing for the environment."


Carbon tax: Heat rises as voters reject Julia Gillard's plan

Online polls are not very reliable but it's a straw in the wind -- JR

ANGRY Australians have vowed to vote Julia Gillard from office at the next election after yesterday's controversial carbon tax announcement.

Scores of voters rejected the plan soon after details of the $24.5 billion package to tackle climate change were revealed, with more than 80 per cent who voted in a national News Limited online poll saying Australia shouldn't have a carbon tax.

Almost 100,000 people voted across four polls in the national plebiscite by 5pm yesterday, with 87.1 per cent saying they planned to change their vote at the next election in light of the tax.

More than 70 per cent of voters, or 15,866 people, said they now planned to vote for the Coalition at the next election while just 8.51 per cent said they would support a Labor government. Just 13 per cent of voters said they wouldn't change their vote at the next election.

Despite government claims that 90 per cent of Australians would receive compensation, and that 40 per cent of households would be overcompensated, voters said Julia Gillard had signed her fate at the polls. "They're calling it 'Carbon Sunday' but I like to refer to today as 'Suicide Sunday' for a PM and three independents," one reader wrote.

"I cannot wait until the next election. The Labor Party the Greens and the Independants will answer to the Australian people for what they are inflicting upon us. Revenge is a dish best served cold," wrote another.

Eighty per cent of voters described the tax as "disgraceful" while others said it was "inadequate". Just eight per cent of voters said they were confident it wouldn't affect their hip pocket.

An anti-carbon tax group said its website crashed after being overwhelmed with people trying to sign up to a campaign rejecting the tax. The organisers of the site,, said the site crashed because of the "sheer numbers of people signing up."


Tony Abbott slams 'veiled socialism'

TONY Abbott has accused Julia Gillard of using her carbon tax plan as a cover for a redistribution of wealth, savaging the new policy as "socialism masquerading as environmentalism".

The Opposition Leader also insisted the package would cost jobs, demanding the Prime Minister visit factory floors and mines to face workers whose jobs he said she had put at risk.

"We're against this," Mr Abbott said. "This is a bad tax. It can't be fixed. It has to be fought."

In the four months since Ms Gillard announced her plan to price carbon, Mr Abbott has travelled the nation, visiting factories, petrol stations and shops to warn of the tax's impacts on the cost of living and its risk to jobs.

The government yesterday produced Treasury modelling pointing only to "modest" impacts and Ms Gillard prepared a national tour to promote her plans. Mr Abbott said he stood by his previous statements and planned to intensify his own campaign.

"I am extremely confident in the statements that I have been making over the last four months," Mr Abbott said. "This is a bad tax based on a lie."

Mr Abbott said Ms Gillard's announcement of the tax was laced with "pollie speak" used to hide the fact it would drive up consumer prices and threaten jobs, with little effect on the environment.

Noting that "no other country on the face of the earth" had an economy-wide carbon tax, Mr Abbott said 10 per cent of households would get no compensation, while 60 per cent would be worse off or "line ball". "This is a redistribution pretending to be compensation, it's a tax increase pretending to be an environmental policy," he said. "It's socialism masquerading as environmentalism."

Mr Abbott's challenge in opposing the tax, to be implemented from July 1 next year, will be its link to tax reform through the lifting of tax-free thresholds.

Asked whether he would be prepared to dismantle such changes, Mr Abbott repeated earlier assurances that the Coalition would take a tax cuts package to the next election, due in 2013.

He refused to outline his plans but vowed they would be made public "well before" the next election and the Coalition would offer "tax cuts without a carbon tax".

Mr Abbott said he was also worried the government proposed to spend $3 billion buying carbon abatement from overseas, where, he said, carbon schemes were often rorted.

And he said that when asked about job losses yesterday, Ms Gillard had "dodged the question". "I think that's because she knows the answers are bad answers," he said.

"I really hope the Prime Minister will go to motor manufacturing plants, to steel plants, to coalmines, to aluminium works, to cement factories because these are the places where jobs will be in jeopardy as a result of this," he said.

Opposition Treasury spokesman Joe Hockey said the tax would lead to the creation of six new bureaucracies and 22 individual programs.


You are paying a high price for a government con

Andrew Bolt

JULIA Gillard's carbon dioxide tax is the most brazen fraud to be perpetrated by an Australian government. Warming believers should be outraged that the tax is so useless. Sceptics should be outraged it's so pointless.

It offends the intelligence of everyone and threatens the jobs of thousands. For nothing.

The Prime Minister yesterday claimed "the science is in" and man's gases were heating the planet dangerously. But not even Gillard dares to claim the tax she's finally unveiled will stop any of that warming, or change the climate in any way. Never has she said by what amount her tax would change the temperature - because it won't. It can't.

Even the Greens' deputy leader, Christine Milne, admits this $23-a-tonne price on carbon dioxide emissions "will not be high enough to drive the transition to renewable (energy)".

No wonder. From sheer gutlessness, the Government has exempted many of the worst "polluters". There's no tax on petrol, no tax on farmers and their gassy animals, and huge handouts to keep some of our coal mines, smelters and power stations going.

And, of course, the tax is just half what global warming adviser Professor Ross Garnaut said was needed, and less than a third of what the Greens wanted. So what's the point of it?

If you really think man's emissions are heating the world catastrophically, you should be outraged - unless you're hoping the sneaky Government is just softening us up for the full whammy, after the election. But even then our sacrifice would achieve nothing, because there is no way anything Australia does can change the climate.

Yesterday Professor Richard Lindzen, arguably the world's finest climate scientist and dubbed "credible" even by professional alarmist Tim Flannery, scoffed at Gillard's tax.

"There's no disagreement in the scientific community that this will have no impact on climate," said Lindzen, professor of meteorology at the Massachusetts Institute of Technology and a former lead author of the Intergovernmental Panel on Climate Change. "It would be nothing for practical purposes and it would be nothing if the whole world did the same."

Of course, the rest of the world is not doing the same. Not a single other nation has a national carbon dioxide tax, so either we're smarter than every other country ... or Gillard is dumber than every other leader. You choose.

Oh, and Prof Lindzen also added that since 1995 there had been no global warming that could be distinguished from natural variability. The theory man's gases are heating the world dangerously is falling to bits.

The idea a whole economy is being deliberately slowed down for an utterly useless gesture seems so unimaginable, a folly perhaps, explains why few analysts even dare to ask if this tax will do a single thing for the planet.


Jobs in coalfields threatened by carbon tax

DESPITE all the rhetoric about saving the barrier reef and protecting the environment for our heirs, the future for at least 500 coalminers in the NSW Hunter Valley may look bleaker now than it did before Julia Gillard announced her carbon tax.

At the Drayton mine near picturesque Muswellbrook, plans are in place to move all staff and equipment to a new project, Drayton South, when the existing mine closes in 2015.

But predictions by the mine's owner, global giant Anglo American, that a carbon tax would cut Drayton South's value in half have thrown the project into doubt.

General manager of the Drayton mine, Clarence Robertson, said he feared for his employees' jobs as well as his own. "We are planning to invest $500 million in Drayton South, and the value of that project will be halved if this carbon tax goes through," he said. "The project would employ 500 people, so all those jobs are at risk."

Mr Robertson said the biggest obstacle was "fugitive emissions", which Anglo American claimed would account for 75 per cent of the revenues raised from the coal industry under the carbon tax, or $13 billion over the next nine years. Fugitive emissions are leaks from pressurised industrial equipment while mining.

"We've got no way at the moment to capture and reduce emissions from open-cut mining," Mr Robertson said. "So if the tax comes in it's really just going to be a cost to us, and we can't do anything to curb that." Mr Robertson said Anglo American expected to pay more than $2 billion in carbon tax in the coming decade.

One of Mr Robertson's employees, dragline supervisor Rod Vaughan, fears the effect of losing mining investment on the local community -- even if households receive compensation for the rising cost of living associated with the carbon tax. "It would definitely have a huge impact on my family and on a lot of families in the district," he said. "We all rely on mining, even the guys that aren't directly working in the mines." Half of Mr Vaughan's friends worked in the mines, he said.

Mr Robertson fears the tax will hurt Australia's competitiveness. "If you look at companies in Mozambique, Indonesia and Colombia, we are not going to be competitive with them if this carbon tax comes in," he said.

Federal MP for the Hunter region, Labor's Joel Fitzgibbon, argues the coal industry's own modelling shows it will continue to grow and Drayton South has yet to receive planning approval.

"Given current and projected high coal prices and the strength of the investment pipeline, there can be no doubt there will be plenty of work for Hunter miners after the planned closure of Drayton, with or without Drayton South," he said.

Mr Fitzgibbon claims the majority of his constituents want action on climate change and that the proposed level of assistance to the mining industry is sufficient.

Asked about his concerns on climate change, Mr Robertson replied: "do we need to do better? Sure. But to just say we've got to pay this tax that nobody else has got to pay is not going to work."



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