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Carbon price floor axed, but EU market links a good substitute

You might have thought Australia’s carbon pricing scheme was done and dusted – at least until the next government comes in. Today’s announcement about the price floor and international permit trading proves…

What will removing the price floor and linking to the EU carbon market mean for Australia’s carbon price? AAP Image/Alan Porritt

You might have thought Australia’s carbon pricing scheme was done and dusted – at least until the next government comes in. Today’s announcement about the price floor and international permit trading proves otherwise.

The government, with backing from the Greens and Independents who negotiated the carbon pricing package in the first place, swapped out a key plank of the medium-term operation of the scheme. The so-called “price floor”, which was to apply from 2015 to 2018, is being replaced by a quantitative limit on the use of cheap international emissions units (CDM credits). And crucially, the Australian scheme will be linked up with the EU emissions trading scheme.

It is a change that is not without risks. But it is much better than the alternative of no price floor, which had been looming.

The effect is that the price from 2015 onwards, when the “carbon tax” phase of the scheme is to give way to a trading scheme, will now be the same as the EU carbon price. Whether it will be higher or lower than the government-determined floor price of $15 per tonne remains to be seen: the EU price is currently around $10 per tonne, but European governments are planning to lift it from the current low by releasing fewer permits. A year-and-a-half ago, the EU price was above $20 per tonne, and considered in a “comfort zone” for Europe.

Along with other economists and carbon market analysts, I have long argued that Australia’s carbon price needs to be prevented from falling to the rock-bottom levels of CDM credits (see here, here, and here.) That price is finding ever-new lows in oversupplied markets; credits are currently trading at just $3.60 per tonne. If the Australian carbon price was in that range it would fail to incentivise low-carbon investments.

The price floor would have been one way to prevent that price drop. It would have allowed companies to use as many CDM credits as they chose, provided they paid a top-up fee. But industry lobbied hard against the price floor, MP Rob Oakeshott withdrew his support, and the price floor regulations were not tabled.

The alternative route now taken is a binding quantitative limit on the use of CDM credits. CDM credits then fulfil only part of the required reductions, and do not determine the carbon price. This is what the EU has done, and it is what Australia is now set to do. Australian emitters will be able to cover up to 12.5% of their total emissions using CDM credits, down from 50% under the previous arrangement with the price floor. The 12.5% limit is sure to be tight enough to prevent the CDM from setting the Australian price. Yet it will allow Australian emitters to fulfil part of their carbon bill using cheap CDM credits.

The change goes hand-in-hand with accelerated linking of the Australian carbon market to the EU emissions trading scheme. From 2015, Australian emitters will be able to buy EU permits, at the EU price, and use them in Australia. From 2018, trade in permits could also go the other way. In effect it creates a combined market, with a common price.

However, the EU link itself is also the biggest drawback of the policy change. Is not the EU creaking under the strains of Southern Europe’s economic woes? Is it really a good idea to enter a market that is dominated by a larger partner, with a combined price that is much more influenced by policy decisions made in Brussels, Berlin and London than in Canberra?

The criticisms will come thick and fast, and in isolation they are justified. In my work on international linking of emissions trading, I have argued that it is in Australia’s interest to link to the main emissions trading markets – but only once the time is ripe.

But circumstances are far from ideal. Ever since bipartisanship over Australian climate policy was lost, political pragmatism has been the name of the game. The precarious parliamentary situation complicates matters further. And it may well be that Australia’s carbon pricing scheme has a better chance of survival under future governments, because repeal will now also mean severing the connection to the world’s largest carbon market.

All-in-all, the forward carbon price curve – taking into account all the risks and uncertainties – probably increased as a result of today’s policy change.

It will be interesting to see how Australia’s large emitters react to the change. Many of the large emitters, and in particular the power industry, criticised the price floor model for its “meddling in markets”, and expressed their preference for unfettered market pricing. The new model means rapid integration of Australia’s scheme with the world’s largest carbon market. On the face of it, industry should welcome this. If the reception turns out less than enthusiastic, then this might indicate that the real reason for opposition to the floor price was the hope that the carbon price level could be slashed by axing it. That did not happen.

Join the conversation

104 Comments sorted by

  1. John Coochey

    Mr

    How long has this tax been in existence before it was butchered? Two months? If fewer carbon permits are traded that means lower economic activity as much as higher prices. Given the written word is the skeleton of ghosts which will come back to haunt us we will see!

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    1. Gerard Dean

      Managing Director

      In reply to John Coochey

      Hey John

      Looks like the Red Tickers have come out of the crevices, but don't have the ticka to put it in writing.

      Gerard Dean

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    2. Wade Macdonald

      Technician

      In reply to Gerard Dean

      Noticed that too Gerard?

      Both Green and Labor stooges abound even against the obvious rorts. Paid political activists perhaps?

      They utilise the environment in a similar manner to antidisestablishmentarianism seen in England generations ago.....thou shall not question the faith of environmental alarmism or the money making rorts generated from it!

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    3. Jonathan Maddox

      Software Engineer

      In reply to John Coochey

      John did you read the article, and did you have any clear idea of what the clean energy legislation attempted to guarantee in the first place?

      Our $23/tonne carbon emissions price is not permanent or fixed and was never supposed to be : it was supposed to transition to a traded instrument with a capped supply but some imported offsets after two years. That's something I and many others including Prof. Garnaut disagree with, but that's what was legislated.

      This is just tinkering at the edges -- replacing the possibility of importing 50% of offsets from the non-capped CDM market to one of importing a maximum of 12.5% from the CDM but allowing imports from, and exports to, the European market. This does have the advantage of making it somewhat harder to repeal.

      All the flaws and instabilities of a fiat market, as observed in Europe, still exist, but the mechanism still has the *possibility* of working as intended, if the cap is sufficiently reduced.

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    4. David Arthur

      resistance gnome

      In reply to John Coochey

      They've butchered it because the CPRS always has been ALP policy: temporary diversions to get it past the Greens is just one of those things ...

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    5. Gerard Dean

      Managing Director

      In reply to Anthony Ervin

      Mr Budgie

      I seem to remember quoting Reuters and the BBC to back up my arguments on this Blog, Mr Budgie.

      Thanks

      Gerard Dean

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  2. Anthony Ervin

    Mathematics Teacher at New South Wales DEC

    I hope the USA and others link up to one worldwide carbon trading scheme making this even more effective. Perhaps the UN could set this up with the aim of fairly distributing carbon permits on a per capita basis. This would maybe even further help end world poverty because third world countries could sell their permits to the polluters and then import their goods and services.

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    1. Gerard Dean

      Managing Director

      In reply to Anthony Ervin

      Oh dear, dear me, Mr Budgie

      You can hope all you like, but the US is never going to introduce a worldwide carbon scheme. Their Cap and Trade proposals fell early in Obama's tenancy, and there is no way the Republicans will bring one in.

      As for your idea that the UN should 'fairly distribute carbon credits on a per capita basis." So you go up to a starving mother hunkered down in a refugee camp in the Sudan and say, "Hey, we have got these carbon credits for you." Something tells me she will not be impressed.

      "Third world countries could sell their permits to the polluters.." I thought the idea was to STOP polluting the world with carbon.

      I am going to make a cup of tea.

      Gerard Dean

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    2. Anthony Ervin

      Mathematics Teacher at New South Wales DEC

      In reply to Gerard Dean

      Gerard,

      You were doing so well until you started with the going up some starving women with carbon credits. You completely misrepresented my proposal. I wouldn't go up to individuals with permits, someone else would do that! No of course they are sold by the governments and companies in those countries and given the magnificent wonders of the free market and trickle down economics the living standards should improve.

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    3. Gerard Dean

      Managing Director

      In reply to Anthony Ervin

      Poor African countries don't need carbon scams, they need a bit of help and a willingness to do the basics:

      - Respect for women. African women perform the bulk of the heavy work on the continent but a treated like crap.
      - Respect for Rule of Law so that hard working Africans don't have their hard earned ripped off by the nearest corrupt cop or party official.
      - Secure land tenure so you know what you own and nobody else muscles you off as soon as you grow a decent crop. You can also go to the…

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    4. Anthony Ervin

      Mathematics Teacher at New South Wales DEC

      In reply to Gerard Dean

      Gerard,

      A per capita right to pollute for people in third world is instantly transferring a highly valued product that can be sold to the highest bidder. At the same time the governments of the world through enforceable laws by the UN manage the amount of carbon emissions and effectively reach reduction targets. Then, the world begins to breath a little better and the ice caps stop melting. And no you don't just stop aid, come on what are you on about.

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    5. Gerard Dean

      Managing Director

      In reply to Anthony Ervin

      I didn't say stop aid, in fact, I said the opposite, increase targeted aid instead of charitable donations of useless carbon credits.

      The whole idea is to reduce our reliance on fossil fuels and increase the use of renewable energy. The credit system for pollution worked OK in the USA because all of the players were reasonably honest. That is a far cry from the European system that has been destroyed by rorters and scammers and stupid EC fat cats.

      Why not just put our money into things that…

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    6. alfred venison

      records manager (public sector)

      In reply to Anthony Ervin

      red budgie - you don't need the usa & canada to come aboard. harper won't & the usa feds won't either. watch for meaningful action from the states and provinces instead. places like quebec and california and new york are leading the pack and the federal gov'ts in each country are the spoilers. even alberta's alison reford is an enlightenment figure compared to steve harper and what ever comes out of the september quebec election won't affect their energy policy one jot. -a.v.

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  3. William Bruce

    Artist

    It is too mad....IF this scheme was GENUINE...it would simply very gradually tax the bad and create big incentives for alternative energy....

    Such a tricky scheme ...Clearly fishy...and Why an "international" scheme...if we want to act we could act ourselves ...and, even exceed International targets.....

    And what does Gillards announced "Moving to an Emissions Trading Scheme" actually mean? Where is the detail?

    It is all as clear as mud to me.

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  4. Gerard Dean

    Managing Director

    What a joke!

    A few months ago Angela Merkel, Chancellor of Germany proudly announced her nation was shutting its nuclear power plants and using renewable energy instead.

    The believers believed, as they always do.

    A couple of weeks ago Angela Merkel did what another German Chancellor was famous for doing when she tore up her committment and announced her nation is going to build 20 black coal fired power stations.

    Why? Because the European carbon price is so low, it's cheaper to buy bargain basement carbon credits and build a coal fired power station burning cheap, imported coal from Poland.

    Today, Mr Combet linked the Australian carbon tax to the European carbon price.

    The whole thing is a joke. It does absolutely nothing for the environment. Sadly, the funniest part is that the believers keep believing.

    It's not funny, it's absolute lunacy.

    Gerard Dean

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    1. Luke Weston

      Physicist / electronic engineer

      In reply to Gerard Dean

      Even worse - it's lignite (brown coal), not black coal!

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    2. Gerard Dean

      Managing Director

      In reply to Luke Weston

      Luke

      You are correct that Germany has huge reserves of brown coal, as do we in Victoria, however I understand that the Reich Chancellor, sorry German Chancellor has said they will be importing nice, clean black coal from Poland and elsewhere.

      Before we get all gooey thinking the Germans are being so wonderfully "Green" using black coal, I believe that their own brown coal is more expensive due to the very high labour rates for German miners. They are only using black coal because it is cheaper.

      Thanks

      Gerard Dean

      PS: Interesting fact. Did you know that General Monash visited Germany's brown coal burning power plants after he defeated the German army in the field, and took their coal handling and burning technology as part of war reparations. He came home and set up the wonderful SEC in Victoria.

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  5. Gerard Dean

    Managing Director

    On July 1st, Australia got certainty. We got a A$23 per tonne carbon price while Europe's is less than A$10 per tonne.

    A month later, Australia gets certainty, again. Now our carbon price will be linked to the European price.

    Commentators say the EC price is too low to spur installation of low carbon or zero carbon energy production. Other commentators say the EC is going to change the regulations to lift their carbon price. To what level and when, nobody knows.

    So, Greg Combet ties the Australian carbon tax to the whim of the EC 'They", whoever they are. We don't know them, we can't vote them out if they stuff things up and we won't have a say in their policy.

    I am so happy that now things are certain now.

    Gerard Dean

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    1. Ross James

      Engineer

      In reply to Gerard Dean

      Besides the problem that there is nothing to be achieved by all this, what really annoys me is the way this government suddenly changes the rules. They did the same thing to the insulation scheme, which ruined the industry. How are companies supposed to plan years ahead, and be confident with capital investment, when they have so much economic uncertainty. No carbon tax. Next there is one at $23/tonne, and going up. Change that after 2 months to be linked to the European price. Who knows what's next.

      It seems they are an economic void - no appreciation of the real world, or how companies operate. They are truly pathetic. Just imagine the administrative nightmare this will be, and the cost to us.

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  6. Gerard Dean

    Managing Director

    "with a combined price that is much more influenced by policy decisions made in Brussels, Berlin and London than in Canberra?"

    Can we vote those dickheads in Brussels out if they get the price wrong and screw our power industry?

    Look at their track record, In 2007 the World Bank reported, "The carbon market – and innovation around it – is alive and well in 2007'.

    Four years later the UK's Guardian newspaper claimed, " the carbon-trading mechanism has opened the door to fraud, profiteering, and "gaming" by participants, serious questions have arisen about the future of the EU's grand emissions plan." (Is it time to overhaul Europe's carbon trading scheme? 28th April 2011)

    There is an old saying that I just made up. "If you can't vote them out, don't listen to them."

    Gerard Dean

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  7. Luke Weston

    Physicist / electronic engineer

    Does this mean we will keep burning coal in Australia, and "offset" it by buying greenhouse gas permits from the European nuclear power industry?

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    1. Gerard Dean

      Managing Director

      In reply to Luke Weston

      Yep, hit it one Luke,

      That is the fantastic news Luke. Now we can follow the 'Green Germans" example and buy supercheap $3.60 European carbon credits, and then stoke up good old Hazelwood Power Station for another 50 years and KNOW WE ARE SAVING THE WORLD.

      And guess what, when we do it, the environmentalists will love it. After all, they fell for Merkel's "Shut down the nukes and use renewables" line. How long did it last - 8 months.

      Taking notice of a German Chancellor is a stupid move, it's been done before and it didn't work.

      EU Carbon Credits - Just a scrap of paper. (Now who said that??????)

      Gerard Dean

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  8. William Pinskey

    Accountant

    lol @ the anti-carbon tax brigade circle-jerk.

    It's a miracle you don't all choke on a thick smog of hyperbole.

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    1. alfred venison

      records manager (public sector)

      In reply to William Pinskey

      what a great image! two great images, really. are you a student of the science of metaphor? -a.v.

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    2. Gerard Dean

      Managing Director

      In reply to William Pinskey

      Well Mr Valo,

      The only 'thick smog of hyperbole' is swirling around the cooling towers of Germany's 20 new coal fired power plants,

      Based on their lead, Australia can now build 5 new coal fired electrical generators AND feel great because our carbon tax, now linked to the Europeans, is saving the planet.

      And there is more - we get to burn OUR OWN black coal - no Polish coal for us.

      So does this mean an Australia power worker who tips a tonne of Australian coal into an Australian power station is no longer an environmental vandal?

      Gerard Dean

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    3. Mike Hansen

      Mr.

      In reply to Gerard Dean

      Gerard Dean, self-confessed climate science denier, fan of Andrew Bolt and prolific denier troll at The Conversation.
      Notice how Gerard never provides links to back up his "facts" - that way they can never be checked.

      "Aug 23 (Reuters) - Germany's largest utility E.ON will not build extra power capacity based on coal or gas in western Europe until 2020 because the market will be oversupplied until the final shutdown of nuclear generation.
      "We won't be building any more gas and coal power generation…

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    4. Gerard Dean

      Managing Director

      In reply to Mike Hansen

      Mr Hansen, we meet again.

      You want facts, you got facts:

      Reuters: "Analysis: Germany's Merkel losing green battle to cheap coal" , 18 May 2012.
      Reuters:" FACTBOX-Controversial German coal-fired power plant projects" 10th May 2011
      Bloomberg: "Merkel’s Green Shift Forces Germany to Burn More Coal" August 21st 2012
      Reuters: "German nuclear backlash means more coal power: EU" March 28 2011
      BBC: "German coal power revival poses new emissions threat" August 12, 2012

      The above is a fraction of articles that all say the same thing. GERMANY IS BUILDING MORE COAL POWER PLANTS.

      If you believe the Germans when they tell you their new coal fired plants are for "Back-generation for renewables.." your name must be Chamberlain.

      He was the last bloke to believe in a German international committment. And look what happened when he got that wrong.

      Gerard Dean

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    5. Mike Hansen

      Mr.

      In reply to Gerard Dean

      I see you have mastered trolling Gerard but still cannot post a link. And links from early 2011 are relevant - why exactly?
      I can see Gerard that you are so used to making stuff up that when asked to back up your claims you are left floundering.

      The issue is not where Germany is but where it is headed. It is still committed to its renewable energy targets.
      "If we let things continue, we will be getting 40 percent or 45 percent of our power from renewable energy by 2020 rather than 35 percent," [German Environment Minister Peter]Altmaier said at a renewables conference "
      http://in.reuters.com/article/2012/08/28/germany-nuclear-idINL6E8JSGPB20120828

      Do I believe that Germany or for that matter the rest of Europe is doing enough carbon mitigation - No!. Do I believe that the EU ETS is problem free - No!
      But I do object to your Andrew Bolt/climate denier inspired bald faced lies.

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    6. Gerard Dean

      Managing Director

      In reply to Mike Hansen

      Mr Hansen

      You are out of your depth, why not pop over the Health and Medicine area for a time and let the heavyweights thrash this one out.

      And, good to see you agree with me that the Europeans have stuffed up their emissions trading scheme.

      Next time you are driving on the autobahn and get passed by a big Audi travelling at 250KHr, ask yourself this question: Is that car powered by peanut oil, perhaps corn methanol, maybe a big battery or a long extension lead?

      Gerard Dean

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    7. Mike Hansen

      Mr.

      In reply to Gerard Dean

      So essentially Gerard, your argument is that because Europeans drive cars powered by fossil fuels, they will never have a renewable economy.
      100 years ago, I can imagine your ancestor, Andrew Bolt Dean saying "those new fangled horseless carriages, they will never work"
      It was probably a Dean who uttered those immortal words "It will never fly Orville".
      No wonder you are a fan of Andrew Bolt.

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    8. Jonathan Maddox

      Software Engineer

      In reply to Gerard Dean

      I looked up and read one or two of the articles whose titles you posted, Gerard.

      Some are misled or misleading.

      One catalogues a number of coal-fired power plants proposed by utility companies but shelved or delayed either due to protests or because they turned out not to be necessary, or which were built to use gas instead.

      The few new coal projects which HAVE gone ahead (I don't have an exact count but I believe it's fewer than twelve; I'll try to pin it down) have numerous economic benefits over the power plants they replace, one of which is enabling low-cost integration of an ever-increasing proportion of intermittent renewable generation. Total consumption of coal has not increased. Total consumption of gas is falling. Total renewable energy generation is increasing exponentially.

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    9. Gerard Dean

      Managing Director

      In reply to Gary Murphy

      For half an hour, then splat.

      Roll on the mighty 7 litre Holden

      Gerard Dean

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    10. Gerard Dean

      Managing Director

      In reply to Mike Hansen

      Mr Hansen

      Oh dear, dear me, you need a lesson in human nature.

      The Germans have been SAYING they will reduce fossil fuel usage for nearly 20 years, but in that time, it has risen strongly, I no longer believe what the Germans SAY.

      I believe what they DO. And what they DO, is use more fossil fuels, every year.

      They can put up as many wind turbines and solar panels they want and strut around the world patting themselves on the back, but until their fossil fuel usage FALLS, I won't believe them.

      Germans will tell you their new cars only use 7 litres/100k which is great, then they get out on the autobahn, slam the pedal to metal at 200 k and suck the earth dry.

      I will tell you this one more time - never, ever, believe what the Germans tell you. It has been done before, with disastrous results.

      Gerard Dean

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    11. Gerard Dean

      Managing Director

      In reply to Jonathan Maddox

      Misleading! Germans to build "fewer" than 12 new coal power plants!

      It is a strange way of moving toward a green future by building new, black and brown coal burning power plants.

      It is true that Germany's total renewable energy generation is increasing, however Germany's appetite for power is increasing at a greater rate, hence their enthusiam for cheap ETS credits and cheap Polish coal.

      Don't fall German Double-Speak that the new plants can integrate an ever-increasing proportion of intermittent renewable generation.

      Germans have a habit of Double Speak. The new German coal fired power plants burn coal - period.

      Gerard Dean

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  9. Philip Dowling

    IT teacher

    Nothing can freeze the climate faster than opinion polls that indicate the imminent demise of a Labor Party's member at an election, except for a poll that indicates the demise of three quarters of Labor's Federal caucus.
    The rent-seekers, the politically ambitious, and the incumbents appear to have finally realised that they have as much chance of surviving the next election as they do of all squeezing onto a small Indonesian fishing boat.
    Julia Gillard once again takes a dog's breakfast and manages to make the original version seem more palatable than one that has endured the various stomachs of a herbivore.

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  10. John Newlands

    tree changer

    This seems to fly in the face of those who say the CO2 price should be more like $40 not $23. Under Phase III of their ETS the Europeans say they will shrink the glut of free permits and limit the use of questionable CDM offsets. Some views on the perverse effects of CDM are here
    http://peavyblack.com/2012/05/19/us-companies-have-used-a-questionable-business-practice-of-carbon-credits/
    Not only could the Europeans lose their nerve Combet could decide the 12.5% limit is too tough. If carbon pricing fails it's because the umpiring is the same standard as TV wrestling.

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    1. David Arthur

      resistance gnome

      In reply to John Newlands

      If carbon pricing fails, it will be because cap-and-trade schemes are a curious blend of market-based pricing ("trade") and Soviet old-style centralised planning ("cap").

      Now, the "trade" part of the scheme is market-based, but is a market-based zero-sum game. [Nearly a zero-sum game, if we forget about the obscene fees of the trading houses]. That means that for every dollar someone makes out of emission trading [less brokerage], someone else is losing. Yes, you might say, someone else might…

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    2. Gerard Dean

      Managing Director

      In reply to David Arthur

      Mr Arthur

      A FFCT is the way to go if we really want to cut fossil fuel usage.

      - Make it more expensive to fly to Europe for holidays and conferences.
      - Make it more expensive to turn on the gas ducted heating.
      - Make it more expensive to turn on the split system airconditioner
      - Make it more expensive to take Johnny to private school in the huge new 4WD Audi.
      - Make it more expensive to.... forget it, you get the idea.

      And that is why they won't bring in the FFCT, because it would actually do something to reduce fossil fuel burning.

      The Carbon tax and Euro emissions scheme is not there to make fossil fuel more expensive and thus drive renewable energy, it is there to LOOK LIKE WE ARE MAKING FOSSIL FUELS MORE EXPENSIVE, so we can drive our Audi 4WD out to airport and fly to Aspen for the kids snowboarding holiday AND then tell Americans, while sipping our latte, that AUSTRALIA IS TAKING ACTION ON CLIMATE CHANGE.

      Smoke and mirrors.

      Gerard Dean

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    3. David Arthur

      resistance gnome

      In reply to Gerard Dean

      Thanks Mr Dean. You remarks suggest that we are at least agreed on the merits (or otherwise) of emission trading: namely, that there are none.

      Emission trading, after all, is simply the derivative trading activity that follows from the anti-economic process of setting an arbitrary cap - that is, the deliberate creation of yet another economy-destabilising scarce commodity to be rationed among the highest bidders.

      This is completely contrary to Weitzmann's optimal solution to the problem of…

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    4. Gerard Dean

      Managing Director

      In reply to David Arthur

      Mr Arthur

      Although I don't agree with your dreams that enough liquid fuels can be obtained from biotechnology, in fact I do believe I have proved to it is not possible, however you will notice that I have quoted, and attributed, your idea for a FFCT or a Fossil Fuel Carbon Tax.

      It makes sense, it will cut fossil fuel usage, it is fair, it will promoted renewable power and guess what- it won't happen.

      As for pedal powered generators driving ducted heating. A typical Victorian ducted heater has a 20KWhour energy output, which if run for 12 hours a day is 144 KiloWatt hours of energy. That is a hell of a lot of pedalling.

      INTERESTING FACT: The bloke who invented the pedal radio for Flynns Flying Doctor Service in the outback was a Mr Traeger. Of good German stock, he was raised, as I was, in Dimboola in the Wimmera.

      Gerard Dean

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    5. David Arthur

      resistance gnome

      In reply to Gerard Dean

      Thanks Mr Dean. I'm pleased that at least some people (other than myself and Geoff Carmody) recognise the superiority of a consumption tax on fossil fuel over a "cap & trade" scheme.

      You may well be correct about there being insufficient space in all the world's deserts for the tanks of algae to draw down enough CO2 to meet the world's demand for transport fuels, at least at present. However, what if a large proportion of the world's land transport was electrically powered, and a proportion…

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    6. Gerard Dean

      Managing Director

      In reply to David Arthur

      Now I am impressed.

      Yes, I took the bus to Nhill Highschool for chemistry lessons every week. I remember the Nhill girls were gorgeous and the blokes were good at footy.

      As for Mr Adams, well, besides being a totally biased to the left, I quite like him and often listen to him on Radio National. That is not to say I don't rant at him when he slips into 'labor' mode, but to his credit, he is up front about it.

      Yes in summary, a consumption tax, your idea, is the best and fairest. Sadly, it won't happen.

      Till we meet again on the next blog

      Gerard Dean

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    7. William Bruce

      Artist

      In reply to Gerard Dean

      Re Gerard Dean post (at bottom):-

      Too true Gerard...and ALSO, to employ and an army of "Climate Change" meal ticket-ers...BURNING up money & energy!

      ---------------------------------

      Gerard Dean Says

      A FFCT is the way to go if we really want to cut fossil fuel usage.

      - Make it more expensive to fly to Europe for holidays and conferences.
      - Make it more expensive to turn on the gas ducted heating.
      - Make it more expensive to turn on the split system airconditioner
      - Make it more expensive to take Johnny to private school in the huge new 4WD Audi.

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  11. David Arthur

    resistance gnome

    Why do economists reckon we should be putting a price on CO2 emissions in the first place? The result is, we have eminent people like Ross Garnaut describing excess CO2 emissions as a wicked problem.

    In fact, it is perfectly simple.

    1. Start cutting taxes.
    2. Make up the revenue shortfall with a consumption tax on fossil fuel.
    3. Cut more taxes, and continue making up the revenue shortfall by increasing the rate of the fossil fuel consumtion tax.
    4. Continue with step 3 until fossil fuel use is decreased to the extent required.
    5. Continue with step 3 a bit more, as the need to cut fossil fuel use even more is confirmed by scientific observation.

    I have invited economists to comment on this suggestion several times. None of them have ever taken up the offer.

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    1. Ross James

      Engineer

      In reply to David Arthur

      One of the problems is of a practical nature. I worked for years in an energy intensive manufacturing industry. I made every effort to successfully improve energy efficiency, because it was a major cost. I achieved about 15% improvement. Had energy cost been much higher, it would have changed nothing (except put us out of business). Technically, there was nothing more that could be done.

      People and governments have this false idea that if electricity is more expensive, companies will use less. In many cases, it can't be done - they've already been down that track to minimise costs. There are two options - increase cost to consumers, or go out of business. The company I started 40 years ago has shut down.

      In many cases, lower energy technology doesn't exist, and may not ever be possible for some industries. Solar and wind are high cost unreliable options - not worthy of consideration.

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    2. David Arthur

      resistance gnome

      In reply to Ross James

      With all due respect, Ross, the operation for which you laboured so hard for 15 years MUST cease operating. This is because the safe operating space for the planet is for atmospheric CO2 to be between 300 and 350 ppm CO2; because it is presently way outside these limits on the high side, further fossil fuel use must cease, as quickly as possible.

      It's as simple as that, and the obfuscation of emission trading schemes is nothing but a get-rich-quick fraud promulgated by investment bankers, and…

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    3. Gerard Dean

      Managing Director

      In reply to Ross James

      Mr James

      Excellent input. Industry can and industry will respond, in fact virtually all industries I know are constantly looking to reduce fixed and ongoing costs, including energy usage.

      The quirk is that while we say we should use less power, and some of us do it, like you did in your factory, others will go and blow the watts you saved on discretionary energy wastage. Now, people who read and scream at my comments will know where I am going.

      Yes, it's the old chestnut. While you were…

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    4. Ross James

      Engineer

      In reply to David Arthur

      I won't dwell on this, but at about a third of the current CO2 level, we couldn't sustain life as we know it. I'm comfortable that it's increasing instead of decreasing.

      Now here's the real problem with your comment. The factory that I referred to manufactured glasswool insulation, using an energy efficient process which I've sold throughout the world. This is one of the key products to improve energy efficiency. The government's insulation project, which was cut off with no warning, caused a huge excess of insulation product in Australia, much of which came in from China. The result is that Australian manufacturing has reduced, and Chinese imports have increased (manufactured at lower efficiency), with increased emissions overall. And you say the Australian factory "MUST cease operating"!!!

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    5. Mark Harrigan

      PhD Physicist

      In reply to Ross James

      It takes a special sort of blinkered ignorant anti-science idiocy to make the statement

      "but at about a third of the current CO2 level, we couldn't sustain life as we know it. I'm comfortable that it's increasing instead of decreasing"

      If you are in water with your feet stuck in the mud, and the water level is just below your nose and mouth, you are comfortable. If it rises just a few cm - you are dead.

      The argument that because some GHGs are a good thing (indeed without them the planet would be a frozen wasteland) therefore more of them must be better is astoundingly silly.

      That's the "real problem with your comment" Mr James

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    6. Ross James

      Engineer

      In reply to Mark Harrigan

      Show me where I said "more of them must be better". I simply said that I'd prefer CO2 to be increasing, than decreasing. If it were decreasing, I'd be concerned about how we feed our increasing population in years to come.

      It's the sustainability of plant life that would concern me. The water vapour (main greenhouse gas) is the main temperature control, plus the balance of cloud density. Remember, direct effect of increased CO2 isn't the problem. It's the hypothesis that it will increase water vapour (ignoring cloud density) that is supposed to cause the catastrophic warming (recent research shows water vapour to be steady). High CO2 might cause some problems. Low CO2 is truly catastrophic.

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    7. Mark Harrigan

      PhD Physicist

      In reply to Ross James

      Stupidity really does have no limits.

      Go tell the world's science bodies of your astounding insights Mr James. Apparently you are SO much wiser than they??

      here's the latest from the American Meteorological Society - who actually STUDY the problem as sopposed to make ignorant statements from their lunge chairs on blogs

      "There is unequivocal evidence that Earth’s lower atmosphere, ocean, and land surface are warming; sea level is rising; and snow cover, mountain glaciers, and Arctic sea…

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    8. Wade Macdonald

      Technician

      In reply to Mark Harrigan

      And you think none of it is natures own doing I bet?

      Man is to blame lock stock and smoking barrel....

      If homo erectus vanished right now would you have the science to prove it wasn't due to natural climatic change in the main?

      Climate change brings new life as well as loss.....don't let this fact ruin your chances of remaining sane.

      Yell and scream about man made effects all you like...it will make no difference to the beginning and end of life as we know it.

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    9. Ross James

      Engineer

      In reply to Mark Harrigan

      Interesting. So what was the cause of warming 1910 to 1940, which was at the same rate as 1970 - 2000? I suppose it's best to ignore Antarctic ice extent, which has been increasing for at least 30 years.

      My point remains. We have some warming - I've never said otherwise (although the magnitude is in some doubt). (If I were to ask you what you would expect after the little ice age, I suppose you expect cooling.) The point is : how correct is the hypotheses that increased CO2 will lead to positive…

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    10. Gary Murphy

      Independent Thinker

      In reply to Ross James
    11. David Arthur

      resistance gnome

      In reply to Ross James

      Thanks Mr James.

      You write that you have spent 15 years minimising energy use in an energy intensive industry. Having jumped to the conclusion that your industry is a large user of fossil fuels, I incorrectly replied that your industry must cease operating. I apologise for this error; if glass fibre manufacturing is a consumer of electrical energy, then obviously the electricity needs to be not generated fossil fuel. In that case, this is not your industry's issue.

      If glass fibre manufacturing…

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    12. Mark Harrigan

      PhD Physicist

      In reply to Wade Macdonald

      Try reading the science - armchair ill informed options in denial of reality don't count.

      Rosenzweig et al (2008). "Attributing physical and biological impacts to anthropogenic climate change"
      Nature 453, 353-357.
      http://pubs.giss.nasa.gov/docs/2008/2008_Rosenzweig_etal_1.pdf
      "Here we show that these changes in natural systems since at least 1970 are occurring in regions of observed temperature increases, and that these temperature increases at continental scales cannot be explained by natural…

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    13. Ross James

      Engineer

      In reply to Mark Harrigan

      I read most of the science, not just one sided. The links you quote - scientific american, skeptical science, giss etc are all one sided. I learnt years ago to collect the data, analyse it myself, and form my own conclusion, along with reference to a broad spectrum of scientific reports. Each month I check data from RSS, GISS, Hadcrut, sea level, CO2 concentration, Arctic ice, Antarctic ice, sunspot data etc. I've watched GISS and Hadcrut change their data when it didn't match their models - that is, there was no warming over the past 15 years, until they suddenly changed their data to make 2010 the warmest year. Nowhere else in science would such abuse of the scientific process be tolerated.

      The first time I saw Mann's Hockey Stick (since withdrawn by IPCC), I couldn't believe that peer reviewed process could publish something so obviously in error.

      Overall, there's a lot of mis-information out there, and it takes a lot of effort to work through it all.

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    14. David Arthur

      resistance gnome

      In reply to Ross James

      Gday Mr James, you write that you'd rather increasing atmospheric CO2 levels than decreasing atmospheric CO2 levels. I'd rather atmospheric CO2 levels between 300 ppm and 350 ppm
      - less than 300 ppm, and the planet may commence glaciation to an "Ice Age".
      - more than 350 ppm, and the planet may undergo large-scale ice melt with consequent sea level rise and also consequent release of methane from thawing permafrost and methane and CO2 from warming oceans.

      We have it in our technological…

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    15. Wade Macdonald

      Technician

      In reply to Ross James

      Well said Ross,

      How unfortunate for Dr Harrigan we are not all ill informed armchair street corner preachers of doom and gloom!

      Cheers

      Wade

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    16. Mike Hansen

      Mr.

      In reply to Ross James

      "Mann's Hockey Stick (since withdrawn by IPCC)"

      Total rubbish. I would accuse you of lying Ross but I suspect that you are simply parroting what you read elsewhere.

      Here it is in the 2007 report - now part of an entire hockey team.
      http://www.ipcc.ch/publications_and_data/ar4/wg1/en/ch6s6-6.html

      "there's a lot of mis-information out there, and it takes a lot of effort" for you to absorb it all from the denier blogs that you trawl.

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    17. Mark Harrigan

      PhD Physicist

      In reply to Wade Macdonald

      Ok Wade - obviously you, and Ross, from your armchairs, know more than the vast body of climate scientists who actually study the subject and every single national science body of credibility who concludes differently

      http://undsci.berkeley.edu/images/us101/balance.gif

      I understand it is useless attempting to change such blinkered denialism

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    18. Ross James

      Engineer

      In reply to David Arthur

      David - thanks for a sensible response. Some people here prefer personal insults in desperation to be heard.

      I have no problem with CO2 around 350ppm, but if asked whether I'd prefer a increasing or decreasing trend from there, I'd still choose increasing as the lesser of two evils.

      I didn't suggest that CO2 warming is only an hypothesis - in fact it's generally accepted that 1.2 degC is possible from direct CO2 increase. It's the positive feedback (eg water vapour heating) dominating negative…

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    19. Ross James

      Engineer

      In reply to Mike Hansen

      I should have said it was withdrawn from the IPCC Summary Report. They kept it in the report body, along with an attempt to justify it.

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    20. Mike Hansen

      Mr.

      In reply to Ross James

      Fact free denier garbage provided without any references to actual science.

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    21. Mark Harrigan

      PhD Physicist

      In reply to Ross James

      You don't read the science - what a load of codswallop. You could't even read the post I made properly.

      I linked to 3 papers from peer reviewed journals - 2 from Nature - possibly the most respected science publication around, and one from Enviornmental Research Letters.

      Mr James - you are an armchair denialist who has no idea what he is talking about. The fact that you think your amateur study is superior to the conclusions of those who actually spend their lives in the field - plus the conclusions of every single national science body of credibility - reveals your thinking for the sham mis-represenative rubbish that it is

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    22. Chris O'Neill

      Victim of Tony Abbotts Great Big New Tax

      In reply to Ross James

      "People and governments have this false idea that if electricity is more expensive, companies will use less."

      You have missed the most important point of carbon pricing. Although it makes electricity more expensive, its main objective is to make the production of electricity by means that don't burn carbon relatively more economical and thus shift the production of electricity towards those means. It doesn't necessarily have to reduce electricity consumption.

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    23. Mike Hansen

      Mr.

      In reply to Ross James

      Ross - you get caught out in an obvious lie and instead of acting like an adult, you tell an even bigger lie in an attempt to cover up.

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    24. Jonathan Maddox

      Software Engineer

      In reply to Ross James

      Please let us know where to find a credible report that CO2 concentrations were higher last century. Enquiring minds want to know.

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    25. David Arthur

      resistance gnome

      In reply to Ross James

      Gday Mr James, you seem to accept that the earth's sensitivity to a doubling of atmospheric CO2 is ~ 1.2 deg C average.

      Ice-core records suggest that climate sensitivity is substantially greater than this, as do numerous earth system sensitivity studies. Being empirical (observational studies, they have the benefit of not quibbling about this feedback or that feedback; instead, they can be taken as reasonable estimates.

      Regarding my preference for 350 ppm CO2 as an upper bound, this is reasonably…

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    26. Gerard Dean

      Managing Director

      In reply to Mike Hansen

      Ross

      Keep hitting them with the facts. Messrs Hansen and Harrigan don't like cold hard facts.

      Gerard Dean

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    27. William Bruce

      Artist

      In reply to Ross James

      Re Ross James...I agree, however where sensible Employers are in this position perhaps they might be given "Employment subsidies"......BETTER THAN paying out huge DOLE & WELFARE money when you need to put workers off...which they are doing now!!

      Perhaps this is what Whitlam did wrong when he forced Graziers to pay our Aboriginal Stockman/Station Hands equal pay.....,
      Seems after this, the Europeans got the jobs & many Aboriginals ended up on FULL Welfare & drinking Booze with NO jobs + many consequent problems....

      Perhaps Gough should have given the Station Managers say $100 a week for each Abo. employed to support Abo. employment (AND their families) having better opportunities...and under the justification that they NEEDED it...not because the were Aboriginals......
      Similar thing might apply with other business' in trouble IF sensible.

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    28. Mark Harrigan

      PhD Physicist

      In reply to Gerard Dean

      If only Mr Dean could provide hard facts (of any temperature) his credibility would be above zero instead of where it is - which is to say, negative

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  12. Philip Harrington

    Principal Consultant - Climate Change

    Compromise upon compromise in a deeply flawed, environmentally ineffective scheme that is headed for the toilet bowl of history. If CDM certificates have no credibility, why not get rid of them altogether, instead of just capping them? Why, fundamentally, link an existential, global environmental hazard to the happenstance of carbon markets, politically controlled - here or in Europe, who cares? - to ensure that they never have any bite, never lead to any genuine change? At $23/t, a new coal-fired power station in Australia was a marginal proposition - not impossible, but still unlikely. At $10/t - or perhaps much less as the economies of Europe collapse - it's a different proposition. That the Greens have supported this measure beggars belief. How low they have fallen in their desperate attempt to cling to some tiny measure of power.

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  13. Garry McDougall

    logged in via Facebook

    Our commentators appear to be 'crazymakers'. Carbon pricing was always criticized fpr its isolation from other countries, its stand-alone-ness. So now we have the makings of an international trading system, an extension of a pricing mechanism where we minimise the export-of-pollution to other countries. That is, this answers a few more of the more potent criticisms levelled at it. To me, it sounds like progress.

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    1. Wade Macdonald

      Technician

      In reply to Garry McDougall

      Thou shall not question the faith of environmental alarmism or the money making rorts generated from it!

      Get real...no problem with a carbon market but the credit scheme is rorted to environmental detriment not benefit.

      At least for now anyway....

      "The road to hell is often paved with the best intentions" but when the big polluters are the ones controlling the audits for credits...you know its not for environmental gain.

      Wake up to yourselves...listen to this, especially the last half.

      http://www.abc.net.au/lateline/content/2011/s3331364.htm

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  14. Mark Harrigan

    PhD Physicist

    The Greens support this

    "Essentially you’re giving up the short-term certainty of a floor price for three years for a long-term price trajectory. And that’s what business wants, is the long-term price trajectory."

    http://www.climatespectator.com.au/commentary/qa-milne-carbon-pricing-changes

    Oakeshott does too

    http://www.theaustralian.com.au/news/breaking-news/oakeshott-backs-carbon-price-changes/story-fn3dxiwe-1226460083864

    It's probably a political ploy in part ot make it much more…

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    1. Gerard Dean

      Managing Director

      In reply to Mark Harrigan

      Doctor Harrigan, we meet again.

      As a naysayer, I point out that European carbon system is not a market system, it has been rorted and abused and is prone to meddling by Eurocrats and governments to advance their national interest. I do agree with you that the volatility of the European system will make a mockery of power system planning.

      This was proven, at the risk of repetition, by Chancellor Merkel's sudden back flip when she reneged on her promise to replace Germany's nuclear power with…

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    2. Mike Hansen

      Mr.

      In reply to Gerard Dean

      Gerard Dean, self-confessed climate science denier and fan of Andrew Bolt - doing what he usually does - making stuff up.

      "Chancellor Merkel's sudden back flip when she reneged on her promise to replace Germany's nuclear power with renewable energy"

      Got a source for that Gerard or did you read that at Andrew Bolt's blog.

      Here is a Reuters report from yesterday.
      "Thanks in part to a law that guarantees renewables above-market rates, Germany has seen a rapid expansion in solar panels and…

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    3. Gerard Dean

      Managing Director

      In reply to Mike Hansen

      This is getting tedious Mr Hansen

      I, like you, quoted Reuters and the BBC to factually back up my argument that Germany is building more coal fired power stations, despite previous committments to concentrate on renewable energy.

      My position has been proved again and again by the pseudo green German government building more fossil fuel power plants or sucking more fossil and nuclear energy from its neighbours.

      Sadly, no matter how many solar panels the Germans put on their rooves, their…

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    4. Mike Hansen

      Mr.

      In reply to Gerard Dean

      "If we let things continue, we will be getting 40 percent or 45 percent of our power from renewable energy by 2020 rather than 35 percent," [German Environment Minister Peter]Altmaier said at a renewables conference
      http://in.reuters.com/article/2012/08/28/germany-nuclear-idINL6E8JSGPB20120828

      Are you saying that Andrew Bolt is telling the truth and Altmaier is lying? What are the chances of that? Andrew Bolt has a conviction for lying.

      "...as history shows, is especially important when discussing German behaviour."
      You now appear to be resorting to racism to bolster your argument. Desperate times for climate science deniers Gerard?

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    5. Mark Harrigan

      PhD Physicist

      In reply to Gerard Dean

      Switching of nuclear in response to Fukushima is indeed a retrograde step where CO2 emissions are concerned. The issues with Fukushima were to do with an old design located where it should not have been and poor management of the issue.

      The similarly located (but newer and better) Fukushima Daini fared well http://depletedcranium.com/the-other-fukushima-nuclear-power-plant/

      It will make it much harder for Germany to achieve its emissions reductions target and demonstrates the hypocritical…

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    6. David Arthur

      resistance gnome

      In reply to Mark Harrigan

      Mark, you write: "No one knows what the price will be in the future ..."

      I suggest that the price needs to be
      1) high enough to ensure continuation of emission-reducing activities
      2) sufficiently stable as to not cause undue fluctuations in R&D and technology investment.

      Whereas a consumption tax on fossil fuel (FFCT) meets both these criteria, a traded derivative can and sooner or later will fail both.

      Bear in mind also that the ballpark value of the traded derivative is set by the…

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    7. Jonathan Maddox

      Software Engineer

      In reply to Gerard Dean

      Contrary to numerous reports, Germany is not increasing its gross consumption of coal.

      It IS retiring its oldest, least efficient coal-fired power plants and also some older gas- and oil-fired power plants.

      It IS replacing them with more modern coal-fired power plants which :-

      1. Are more efficient; in some cases twice as efficient, in turning the energy in the fuel into electric power

      2. Are better equipped than older coal-fired baseload plants to ramp power on demand, without loss of…

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    8. Mark Harrigan

      PhD Physicist

      In reply to David Arthur

      David - I think I have posted elsewhere that a FFCT, which you first alerted me to in the Carmody paper, would be supeiror. So I agree. But that's not what is on the table at the moment. The current market mechanism indeed has its flaws - nevertheless I prefer it to the idiocy of "Direct Action".

      I understand you are passionately lobying to increase awareness and understanding of a FFCT - were such an option on the table I would support it.

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    9. David Arthur

      resistance gnome

      In reply to Mark Harrigan

      Thanks Mark.

      How do we get an FFCT "on the table"?

      I've made submissions to the Garnaut Review, the Henry Tax Review and the Dept of Climate Change Consultation Committee.

      I've emailed Opposition Senator, the Greens, the Independents, various MHR's, various economics academics and various economics journalists.

      I've posted comments to 'National Times' articles, "The Conversation", even to ABC Opinion (Peter Mares was sufficiently impressed to read it out in the Listener Feedback segment of "The National Interest").

      Are we of the Great Masses insufficiently credentialled to be capable of worthwhile thinking, or something? I'd appreciate Prof Jotzo's feedback.

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    10. Gerard Dean

      Managing Director

      In reply to Jonathan Maddox

      Never, ever, ever believe the Germans. Never

      Gerard Dean

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    11. Mark Harrigan

      PhD Physicist

      In reply to Gerard Dean

      Never, ever, ever believe Gerard Dean - especially where "cold hard facts" concerning climate change are concerned.

      Figures for German Emmisions (Gigatonnes per annum)

      http://www.pbl.nl/en/publications/2012/trends-in-global-co2-emissions-2012-report

      1990 1.02
      1991 0.99
      1992 0.94
      1993 0.93
      1994 0.92
      1995 0.92
      1996 0.94
      1997 0.91
      1998 0.90
      1999 0.87
      2000 0.87
      2001 0.89
      2002 0.87
      2003 0.88
      2004 0.88
      2005 0.85
      2006 0.86
      2007 0.84
      2008 0.86
      2009 0.80
      2010 0.84
      2011 0.81

      slope -0.010047619

      REDUCING

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    12. Gerard Dean

      Managing Director

      In reply to Mark Harrigan

      Let's wait and see how it goes over the next few years, shall we Dr Harrigan when those new coal fired plants arc up!

      Never, ever believe the German's emissions reporting.

      Gerard Dean

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    13. Mark Harrigan

      PhD Physicist

      In reply to Gerard Dean

      You explicity claimed the Germans were increasing their usage of fossile fuels over the last 20 years. This data proves you wrong. Mr Dean you just dont have the cojones to admit to being wrong. Weak.

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  15. John Newlands

    tree changer

    In effect changing the carbon price from $23 to ~$10 after 2 months could hardly create certainty for business. That's because Australian firms can buy some dodgy Euro offsets now to use later. The whole thing is fraught with uncertainty
    - possible dismantling of any carbon pricing by Abbott
    - claims of fraud against 'carbon farming' and CDM offsets
    - 30% brokerage fees by banks and other well liked institutions
    - a large panic driven change to the CO2 target.
    Note the CO2 cap could swing either way depending upon perceptions of recession vs melting ice caps. It reopens the hasty claim that no new coal fired power stations will be built in Australia. The Germans opened a large new coal fired power station (Neurath) just last week seemingly untroubled by the European permit price.

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  16. Chris Harries

    Environmental consultant

    It's noteworthy that on this conversation there appears to be more red negatived comments than green positive ones. But what a mix of bedfellows! The anti crowd include climate sceptics who don't see the need for any scheme, climate activists who do but who don't think the carbon regime is near good enough, those opposed to renewables, and those who want them....

    The underlying problem is one bald fact: no nation has as yet brought in a really robust climate change mitigation regime that works…

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  17. David Arthur

    resistance gnome

    This page seems to be afflicted by a lot of visitors from Facebook. I have posted several comments to this page in which I refer to or actually describe a superior alternative to the "Clean Energy Futures" package for setting a carbon price in Australia.

    Those comments have attracted numerous '-' (unconstructive) hits, yet there are no replies to my comments explaining how and why my criticisms might be incorrect.

    Has the ALP got a flash mob of shills to get off Facebook long enough to "unlike" comments on this page that disagree with the Party dogma that "emission trading" is the best way to put a price on CO2 emissions?

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    1. Gary Murphy

      Independent Thinker

      In reply to David Arthur

      Maybe a lot of people just think that any action is better than no action. Most of your comments appear to be an attempt to undermine action.
      BTW Don't have a go at me - I know that is not your intent.

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    2. David Arthur

      resistance gnome

      In reply to Gary Murphy

      Thanks for that explanation, Mr Murphy.

      Regardless of the "appearance" of my comments, a reading will establish two point, which I shall capitalise so that those whose comprehension is limited to graffiti might better grasp my point. Rest assured my intention is not to shout at you.

      1. WE NEED TO CEASE USING FOSSIL FUELS AS QUICKLY AS TECHNOLOGY CAN TRANSFORM OUR ECONOMIES.

      2. THE "CLEAN ENERGY FUTURES" DOG'S BREAKFAST IS A LOUSY WAY OF PUTTING A PRICE ON CO2 EMISSIONS: INSTEAD, A REVENUE-NEUTRAL, STEADILY ESCALATING FOSSIL FUEL CONSUMPTION TAX (FFCT) IS THE OPTIMAL CHOICE.

      Even Professor Garnaut knows a consumption tax is etter. The one time he was asked whether a consumption tax would be preferable to "cap & trade" schemes, his reply was that with sufficient rules, the CPRS could be as good as a carbon tax.

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    3. Jonathan Maddox

      Software Engineer

      In reply to David Arthur

      There are significant flaws in floating-price cap-and-trade mechanisms which you rightly state would not exist if there were a legislated carbon emissions price, fixed or indexed to increase.

      However a floating-price mechanism with a brief fixed-price introductory period is what our elected Parliament ultimately legislated for, and members of that Parliament who opposed the legislation are promising to repeal it should the composition of Parliament change to permit that, in favour of a return…

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    4. David Arthur

      resistance gnome

      In reply to Jonathan Maddox

      Thanks Jonathan.

      While many of the red tickers may not really disagree with me, it is disappointing that they are so accepting of mediocrity on the part of our elected representatives, and on the part of the people who do the thinking for those representatives - i seems evident to me that, with one or two notable exceptions, our parliamentarians aren't doing any much thinking.

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  18. Fred Pribac

    logged in via email @internode.on.net

    Plenty of talk about the potential effects of the change but can anybody elucidate "why" this change to carbon pricing was enacted?

    I must be missing something. It baffles me as to why the government would want to tinker with the tax at a time when the furore over it's introduction seemed to be settling down and Abbot's strident harping was possibly starting to become counterproductive to the opposition?

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