King Coal Australia Plans to Price Carbon

Fri, 2011-07-15 14:01Graham Readfearn
Graham Readfearn's picture

King Coal Australia Plans to Price Carbon

Coal ships at Australia's Newcastle port

SO Australia’s carbon price cards are finally on the table.

From July next year, the Federal Government will look to price greenhouse gas emissions at $23 per tonne rising 2.5 per cent each year.

Then, in 2015, this is replaced by a cap-and-trade system with the price set by the market.

That’s the simple explanation. The devil is in the detail, of which there is an awful lot.

To make the plan politically acceptable, a complex array of exemptions, sweeteners, compensation measures and adjustments to the tax system have been negotiated.
Public debate so far has concentrated almost entirely on the financial winners and losers from the proposed Clean Energy Future plan. At the same time, the country’s position as the world’s leading exporter of coal looks even more secure.

As far as the general public is concerned, the Labor-led Government says the carbon tax will raise consumer prices by 0.7 per cent - a little under $10 per week for the average household.

But in a complicated re-working of the tax benefits system, the Government will use about half the revenue raised from the scheme to give many households that $10 back. Families who earn more, get less back. Some low-income households could actually be marginally better off.

Included in the Clean Energy Future scheme are emissions from power stations, some transport emissions, industrial processes, non-legacy waste (e.g. methane from landfills) and fugitive emissions (mostly methane released from coal mines).

Covered by the scheme are companies which have facilities that emit more than 25,000 tonnes of greenhouse gases per year (meaning if a business operates at multiple sites and none of those sites singly emit above the limit, then they are exempt). In real terms, this will see about 500 companies affected.

Transport fuel used by households and small commercial vehicles is exempt, as is fuel used in agriculture, forestry and fishing.

This led the country’s main airline, Qantas to “warn” this would put $3.50 on the price of a domestic flight.

One commentator, pointing out Australia’s comparatively luxurious standard of living, said this was less than the airline currently charged customers for a bottle of water.

So what of the carbon price’s aim to cut greenhouse gases and boost renewable energy?

The CEF plan is the key driver in the Government’s bid to cut annual emissions by five per cent by 2020, based on their levels in 2000 - a target with bi-partisan political support. By 2020, this target represents a cut of 149 Mt.

There’s the creation of a $10 billion fund for investment in low-emission and renewable technology and cash to fund the closure of 2000 MW of coal-fired power stations.

There’s also the unmeasurable but significant symbolic step of finally acknowledging that the unbridled pumping of greenhouse gases into the world’s atmosphere comes at a cost.

But Australia’s main contribution to the climate change problem, in terms of emissions, isn’t covered by the carbon pricing plan because it is contained in its coal exports.

Australia is the world’s largest exporter of coal. In 2009/10, Australia exported 135 million tonnes (Mt) of thermal coal, used in power stations mainly in Asia.

In 2015/16, Government forecasts say an annual growth of 10 per cent in this trade should see 213 Mt of thermal coal being shipped from Australian ports.

Considering that each tonne of coal burned for electricity emits almost three tonnes of carbon dioxide, Australia’s thermal coal exports in 2015/16 will emit about 600 Mt of CO2.

The Australian Coal Association’s executive director Ralph Hillman has repeatedly claimed the carbon price will restrict growth in his industry and put 4700 miners out of work.

Mr Hillman is used to being involved in major negotiations on the climate change issue. Before he became the coal industry’s lead voice, he was the Australian Government’s environment ambassador. Among his responsibilities was in negotiating Australia’s long-held refusal to sign the UN Kyoto Protocol.

Because the coal miners don’t burn the coal themselves, their main exposure to the carbon tax is in the “fugitive” emissions of methane released during mining and in the transport fuel used. Even then, the government’s plan will compensate mines for up to 80 per cent of fugitive emissions.

Yet as the coal industry complained about threats to its viability, elsewhere its future looks far more positive. Just two days after the carbon price was announced, coal giant Peabody Energy and steel maker ArcelorMittal announced it was pursuing a joint A$4.73 billion (US$5.05 billion) takeover of Australian coal miner Macarthur Coal.

At the same time a report in The Australian showed Australia had more than $50 billion of investment in coal mining and related infrastructure either committed, or close to commitment.

Photo courtesy of Greenpeace

Comments

Yes, the carbon tax is sooo bad for fossil fuel companies that they want to dive in & pay $4.73 B to enter a market where there is a carbon tax.

Sooo bad.

Funny the Australian should write a story like Peabody too. Being a right wing publication, they like to keep that sort of news out of the paper. Its funny you know, because since this news of the world controversy, progressives in Australia & the USA have been calling on an enquiry into the media over any illegal activities in those countries as well.

Its strange because conservative politicians have been saying there is no need for an enquiry into the media, but the progressives say there is.

Yet conservatives are always banging on about how there is a definite liberal bias in the media. Conservatives have the opportunity to expose it once & for all, but they choose not to…but progressives do? Who has something to hide?

Australia will have the carbon tax & then ETS & for all the bluster, the conservatives if they win power at the next election, will not repeal it.

The simpler and more realistic plan is to boot Gillard and idiot party of warmists out of government.

I suspect this is the solution Austrailians will ultimately choose.

Be kind to Trees, Go for a drive.

Oz, may have all the carbon taxes it wants. They are, after all, yours, but when your economy suffers, don’t come here for financing.

What amazes me, is that Australians, who already accept electricity prices 2-3 times ours, embrace raising them. For what purpose? Even the most optimistic estimates of effect on temperatures show it will make a difference in the hundredths of degree range. Politicians are the same everywhere, they tax more to spend more, with only one goal, re-election.

“but when your economy suffers, don’t come here for financing.”

Come where? The USA? Its broke! You are about to raise the debt ceiling again. You refuse to adopt another possible revenue stream by letting green tech in the door ( after all, the denier faith is spawned by black power not wanting green power competition) . China without firing a shot is going around the world convincing other countries to start trading in Yuan instead of USD (Russia,Brazil,Malaysia & India already do) & China owns most of the US bonds. Once they have enough countries moving to the Yuan as the worlds reserve currency, it wont matter anymore if the U.S go around causing wars to maintain oil supply or to force people to trade in USD for oil. Trading in oil will have largely moved to the Yuan, so much of the cream from worldwide trade in oil in USD will be lost. The USA wont be able to leverage as much debt anymore. You guys need to move to green tech asap & become the world leader in it, because in the next few years China will ensure one of your biggest passive revenue streams (trading in USD) will be gone.

You have a chance to dig yourselves out by cutting your trillion $$ a year military & adopting green tech, but the corporations & your political party have you completley conned.

“Even the most optimistic estimates of effect on temperatures show it will make a difference in the hundredths of degree range..”

For Australia acting alone yes. But with the a global effort the results are compounded.

“Politicians are the same everywhere, they tax more to spend more, with only one goal, re-election.”

Well, I sort of agree with you there. Thats why its important to have an ETS in place ( which they are transitioning to) instead of a carbon tax.

An ETS takes it out of the governments hands & allows the free market to sort it out.

“after all, the denier faith is spawned by black power not wanting green power competition”

Um, whoa. That comment pretty much demonstrated where your head is Pal. See ya, wouldnt wanna be ya.

“Um, whoa. That comment pretty much demonstrated where your head is Pal. See ya, wouldnt wanna be ya.”

Hey? Black (fossil fuel generated power) doesnt want green ( renewables) power as competition & this is some sort of revelation or shock to you?

You think fossil fuel providers actually WANT competition?

‘What amazes me, is that Australians, who already accept electricity prices 2-3 times ours, embrace raising them.’

But then you are not paying a fair price for your electricity are you. Not when the environmental and health costs associated with the fossil fuel extraction, transportation and combustion are considered. If you cannot grasp the reality of this argument then find a copy, and READ it, of Jeff Goodell’s, ‘Big Coal’ here is some help for you: http://www.amazon.com/Big-Coal-Secret-Behind-Americas/dp/0618319409

Aww, LionelA thinks US energy prices are unfair. There’s a great deal of price envy in that statement. His energy prices already are much higher than our, and his electricity rates are about to double. All tp chase the goal of energy fairness? No. To protect the planet from mankind.

PhilM want the US to reduce spending and get its fiscal house in order, but wants us to embrace Ozzie “green” goals, which we already know require huge government subsidies. Anyone see the logical contradiction in that?

Fairness, for these folks is to raise energy prices to support some crazy green goals which in fact fall most heavily on the poorest in their societies. Since energy is the cornerstone of nearly every product sold, raising its price is fair? Which in fact fall most heavily on the poorest in their societies.

Now, those are great satrategies to be fair.

‘Aww, LionelA thinks US energy prices are unfair.’

Did I state that?

Nope!

Did I even suggest that?

Nope!

I pointed out that the cost of the electricity you use does not factor in externals.

Now go back and read my statement and the suggestion within [1] again and this time without the ideological blinkers or with some comprehension.

[1] Have you read Goodell’s book?

LionelA asks did he state that? As a matter of fact, you did. “But then you are not paying a fair price for your electricity are you.” Adding something about externalities in a separate sentence makes it an after thought or secondary point. But, the real problem with trying to include the externalities to the electricity price, is it is nearly impossible. Oh, oh, I almost forgot, unless, of course, you have a carbon tax to collect all those externalities.

Here, those externalities would almost surely include financial support for the poor hurt by the high price of electricity and other energy, and even more subsidies to pay for that green energy.

And, boy and girls we can see the endless tail chasing circle we get into. Of course winning battle as in Germany where greens have gotten the government to do away with clean, safe nuclear plants to be replaces with dirty, more dangerous gas/coal plants.

‘Adding something about externalities in a separate sentence makes it an after thought or secondary point.’

Not at all, it was to counter your clear lack of comprehension skills or deliberately taking my statements out of context.

But then I already knew what phrase and fact twisting duplicitous thinking kochhead you are.

‘Here, those externalities would almost surely include financial support for the poor hurt by the high price of electricity and other energy, and even more subsidies to pay for that green energy.’

Yeh! And I hope somebody dumps a load of toxic sludge from mountain top removal or coal burning power stations in your back yard soon. In other words bring your externalities home.

“PhilM want the US to reduce spending and get its fiscal house in order, but wants us to embrace Ozzie “green” goals, which we already know require huge government subsidies. Anyone see the logical contradiction in that?”

Its funny you know, you dont see the irony. The reason you have cheap power is because your government spends billions on infrastructure, subsidies & tax cuts for the fossil fuel industry over there so you can have your power cheap. So do we to a certain extent.

Spend the equivalent on Green tech that fossil fuels has had for the past 100 years, then remove the subsidies & tax cuts on both & lets see who wins eh?

You dont have to do anything. But I bet you will be one of the first in line whingeing that the government should have done something when China finishes making the Yuan the worlds reserve currency. I dont think you realise the impact that will have on the US. You need another revenue stream & you are blocking it because of your political beliefs.

PhilM, anna see a dumb policy? Read the multiple, contradicting policies energy and drilling policies of the US. The US has the largest resource for energy raw materials in the world and we can not produce enough for our own use (oil) and are restricted from drilling and mining (gas and coal.) We should be exporting, but can’t.

“The US has the largest resource for energy raw materials in the world and we can not produce enough for our own use (oil) ”

I think you are getting a little mixed up there. You are about 40 years behind the times.

The US has only 22 Million barrels left & it uses 7 Billion per year. On top of that it imports about 70% of it’s oil.

http://en.wikipedia.org/wiki/Energy_policy_of_the_United_States
http://en.wikipedia.org/wiki/Oil_reserves

Now if you want to talk about Coal, now thats a different matter. The US is the clear leader there.

“and are restricted from drilling and mining (gas and coal.) ”

How much less reulation do you want than what is already there? That is just talk from the coal & gas producers. How much less regulation do you need if you are already able to do mountain top removal & increased drilling on private property?

Hey Phil…

It not a problem…
Not a problme at all.

Here in Alberta, we have at least 300 years worth of oil and gas.

And we have not problem selling it to the US.
or to China, or Japan, or ……

So in reality, there is not shortage of Oil.

By the time it runs out we will likely have Antimater reactors….

LOL>….

Warmists… you just gota love em.

“Here in Alberta, we have at least 300 years worth of oil and gas.

We were talking about Australia & the USA not Canada, but do you work for them?

PhilM, you’ve been brain washed with the “Big (fill in the blank) rubbish. Saying this: “That is just talk from the coal & gas producers.” and earlier asking if the commenter works for them, loses all credibility. That’s no counter point, because those to whom you are responding clearly know whether they are getting paid for commenting. Claiming nearly every contrary commenter is being paid is truly bizarre.

Your first Wiki reference is clearly written by the AGW believers, because it is mostly concerned about CO2 and not energy. Moreover, it talks about “proven” reserves, and the policies that have hurt the most is those which stop exploration.

Worse we have had political fights for decades over drilling in ANWR (a huge section of Alaska), where drilling would impact just a small fraction of the area, but would provide oil and gas in the same amounts as was found in the older Alaska fields. Dept of Interior owns huge tracts of land for which they are loath to issue exploration permits: “The Federal Government owns nearly 650 million acres of land - almost 30 percent of the land area of the United States. Federally-owned and managed …”

We can’t believe all that is written on Wiki, and we can not believe numbers based upon “proven reserves” when exploration is highly con/restricted. The fracking issue, is another new attempt at restricting production, when hydrocarbons are being found all over the world. Maybe even Oz. Fracking has been around for ~50 years, but now it is an issue because huge reserves are being discovered.

There is much more to be discussed over the goals of the Green movement, because it appears they just fight any progress. Are you anti-progress, PhilM?

“PhilM, you’ve been brain washed with the”

Why do you insist on calling me PhilM & not Phil M? Is that so you can impersonate that name like you have done on the murdoch post?

“and earlier asking if the commenter works for them, loses all credibility. ”

Honest question, didn’t get an answer.

“where drilling would impact just a small fraction of the area, ”

Hmmm, reminds me of Valdez & the BP oil disaster. To those creating the mess it’s “damage to a small area”. To the people who live there, it’s “our home you have wrecked”.

The compensation is either avoided or inadequate. Like 2 recent spills here in Australia. Both tankers said their couldn’t afford to pay the clean up costs & instead forced governments here to pay many millions in clean up costs. Shifting the profits to private enterprise 7 the loss to the tax payers. Like BP who now say they shouldn’t have to pay anymore.

“We can’t believe all that is written on Wiki”

Unless it supports your side.

“The fracking issue, is another new attempt at restricting production, when hydrocarbons are being found all over the world. Maybe even Oz. Fracking has been around for ~50 years,”

Because like smoking, asbestos, thalidomide,agent orange, CO2. It seems ok at first, but only after decades of scientific research,testing & understanding does the stance on these things change. Fracking has been shown to contaminate water tables with dangerous chemicals.

“but now it is an issue because huge reserves are being discovered.”

From what I understand. It’s only 5% of wells that they need to use fracking on. There is little opposition to the rest of the wells that don’t use the fracking process.

“Are you anti-progress, PhilM?”

Hardly. I revel in it. But progress isn’t making $5 & spending $10 to fix up what earned you that $5. That’s just illogical.

PhillM said: “The US has only 22 Million barrels left & it uses 7 Billion per year. On top of that it imports about 70% of it’s oil. ” 22 ?MILLION? what’s a few zeroes in a number? Eh Phil?

“”The US has only 22 Million barrels left & it uses 7 Billion per year. On top of that it imports about 70% of it’s oil. ” 22 ?MILLION? what’s a few zeroes in a number? Eh Phil?”

Honest mistake & typo.

LionelA, you’ve been caught out making a silly statement now you compound it with more silly, juvenile, play ground level name calling. But this childish comment: “Yeh! And I hope somebody dumps a load of toxic sludge from mountain top removal or coal burning power stations in your back yard soon. In other words bring your externalities home.” takes the cake for childish behavior.

That one’s worth a sheesh!

It is you who has the problems

with comprehension

tunnel vision

lack of empathy with the victims of fossil fuel extraction etc

and not being able to take home truths when pointed out.

There is nothing childish about countering the imbecilic thinking displayed by such as you. It is not a personal attack but one on your brand of ideology.

[x]
climate change adaptation, CISL

A new series looking at the likely impacts of climate change could help companies, politicians, financial planners, entrepreneurs, defence analysts and leaders of various industrial sectors learn how to adapt to the increasing pressures of global warming.

Based on work already done by the Intergovernmental Panel on Climate Change, the University of Cambridge Institute for Sustainability Leadership (CISL...

read more