yay LFTR!! can't wait, thanks China for doing what the US should have 60-70 years ago (thats right, it's been around that long, didn't make it as the other competitor, uranium based solid fuel reactors gave off a useful bi-product, weapons grade fissionable materials)

For those that haven't looked into this, Liquid Flouride Thorium Reactors, google it.

If we had a significant industry which could consume high grade black coal, coking grade coal (steel? I believe there is still no really viable replacement for coal in high quality steel production) we'd reach a point where instead of exporting it, we used it as a consumable to make higher value products, presumably also for export. Thats currently worth ~$1.5b. Coal export is around ~$50b so we're a long long way shy of this being of comparable economic value.

If we had industries which could use the products of fractionation of coal (pesticides? plastics? drugs?) likewise, at some point the balance would favour consumption for use in that manner.

I cannot see a value long-term in the brown coal used this way. Its intensely polluting for the extracted value.

So, like China. Poland, Germany, we have a specific combination of value of exported coal, and value of unexported, brown coal, both as an energy source, and a pollutant.

The carbon price discussion in the EU is not specifically about Germany, Poland: its about the EU as a whole.

So, thus the intention of my question: what is the specific impact on us, compared to these coal-owning economies, distinct from the wider EU: because I still don't see a specific, direct economic analysis which says what coal producers face, in this regime.

A wider carbon trading scheme is vital. I'm not opposed.

What am I missing?

at the same time renewables are already cheaper per megawatt than coal or gas (in relation to the building of new stations as opposed to exisiting infrastructure. China needs to cut it's emissions as it is slowly choking the life out of its citizens.

Ever heard of ocean acidification? directly linked to increases in atmosphere concentration of carbon. Notice how the wind and water currents seem to be moving further south? Any idea as to how this impacts wheather conditions on land?

The whole world is moving towards emissions trading, China is about to release Liquid Flouride Thorium Reactor technology, the investment in renewable energy generation globally eclipses investment in fossil fuel generation.

At the same time, we are re-structuring our economy towards the export of more fossil fuels, spending billions on infrastructure to facilitate this, risking the decimation of the Great Barrier Reef, poisoning of significant aquifers through CSG and unconventional gas, the boom also destroying regional communities through biased mining legislation, destroying or selling off our agricultural productivity, hollowing out the non mining economy through the high dollar, with the lions share of the wealth being exported to overseas shareholders.

You talk about trade exposed industries, what about all the trade exposed industries like manufacturing that are being decimated by the impacts of the mining boom?

The carbon tax has been a non event and only hyped up by the coalition for political advantage.

You talk about playing fast and loose with Australias future and prosperity?

You make mention of Green/Labour. When you look at the who's who of the mining sector, ex liberal/national politicians make up a sizeable chunk of management and directors, i suggest that they are selling us out for short term money, advantage and power.

Your comment reads like a cross between neo-con propaganda and climate science denialist.

BTW do you believe in creationism too?

We really are resigning this country to being nothing better than a quarry, if we do nothing to support non-mining industries.

The high Australian dollar hits my hip pocket and those of my Australian-based colleagues hard (time and again Australian technology companies have been acquired by American ones who have eliminated Australian engineering departments) and changes my purchasing decisions and those of everyone I know. This country gave up on buying and making its own tools and electronic equipment decades ago -- I've worked for hardware design shops, but the manufacturing is invariably outsourced. Recently we stopped making our own underwear. The same thing is happening now to our food and beverage industries. My friends gleefully buy premium German beers at the bottle shop for less than any Australian brand is available. Imported *biscuits* undercut Australian-made ones in the supermarkets! Foreign students can go to top-rank American universities more cheaply than Australian ones. Holidays in Thailand and Fiji are cheaper than holidays in Queensland, whether you're coming from Sydney or from the UK. Our only remaining specialties are coal and iron ore. Since I buy green power, I have no use for the former.

Japan has suffered a one-off setback due to the Fukushima scandal and its premature closure of many other nuclear power stations. It has made a deliberate and sobering political decision to increase consumption of coal and gas in the short term. However it is also investing very heavily in renewable energy and divesting itself of energy-intensive industries. It's not profitable to run them in Japan any more, since all energy save for renewables must be imported.

As for China : “there’s no market for further development of energy-intensive industry.” -- Jiang Kejun, China National Development and Reform Commission.

http://www.smh.com.au/business/china-flags-plan-to-cut-coal-use-20130206-2dyq5.html

One of the reasons environmentalists did not fight to extend emissions trading to liquid fuel sales was because the carbon price would have amounted to just a couple of cents per litre, when the retail price of fuel can vary by ten times that much in a week. The extra price signal would be lost in the noise. *Everyone* is already taking high petrol prices into account when making their consumption choices, save the mining companies which get a 100% tax rebate on their fuel costs. Australians have spent more of our income on fuel since 2008 than in any period before -- the respite from high fuel prices from 2009-2011 was indeed the result of the US recession, but that's long since over.

You may have been told that rare earth mining and other dangerous chemical processes are "vital" to renewable energy generation, but it's not even close to the truth. All electric motors and rotary electric generators can be made lighter, more efficient and cheaper with rare-earth magnets than without, but they're not a necessity. Regular silicon solar cells require no rare minerals of any kind. More rare earth magnets end up in (and on!) fridges and toys than in renewable energy technology. You'd do better to complain about the environmental havoc wreaked by flat screen displays, which *do* require rare and toxic minerals.

Inward mining investment in Australia has already peaked. Coal exports will peak before long, and iron ore exports with them. Australia *will* take a permanent hit in mining export income, whether we "punt" on sustainable "already very damaged" industries or not. If we don't "punt", all we'll have left is "slack".

But not if you have achieved stable cost through reducing energy use via eliminating waste and/or utilising more efficient processes/technologies.

I am sorry that you thought what I said was long winded, but other than that I don't think that your comments were actually a reflection of what I said. What I said is that the comparison of the EU and Australian price on CO2 emissions is not as simple as the difference in the set price per tonne of emissions. As I argued many of the businesses liable for the tax and will be liable when it transitions to a market based system, only pay for a proportion for their actual emission depending on the percentage they are allowed to emit for no cost.

The other thing I argued was that most businesses do not pay the tax for their emissions directly because their emissions have to be at a minimum set number of tonnes before they become liable for the tax. They still pay indirectly like all of us depending on theirs and our energy consumption, and or consumption of goods produced by businesses that pay the tax on that proportion of their emissions that they are required to pay for. But as I said the idea is that those businesses can reduce avoid that cost depending on their energy consumption as well as the source of that energy and whether it comes from alternative energy sources that are not carbon based. And as I said there are many ways to achieve that depending on how they restructure their energy use and energy consumption.

As an example one of the piggeries in Australia has not only cuts their energy cost to zero, but are producing energy that they are selling back into the market. And they have done this in a way that has two benefits. Instead of the waste produced from that piggery being a pollution for the environment and having to be treated at a cost to the piggery, it is now used to produce energy for its own consumption as well bring in a return as it is fed into the energy grid. That is a win win for all.

It is not about government regulation versus the market system. It is about government regulation using the market to drive changes within the market. As I said it is about driving change in the market about how we not only use energy but the source of that energy. And as I said this is not new. Government has done this through regulation as well as through using the market system to drive changes in the way business does things.

I used Beijing as an example, because the cities of western nations were once just as polluted as many of cities of the developing world including China. We made industries clean themselves up substantially in comparison to what they one were. This has not only improved our health and our lives it has driven far greater efficiencies across and within those industries. But industry in most case would not do it without the carrot and stick approach of regulations and other support measures.

And I can tell you many people inside of China and other developed countries are now starting to complain about the level of pollution of their cities and of their environment. They are starting to understand the impact it is having on their health and quality of life. And than we have the United States who may not have a greenhouse gas emissions scheme/market but at a national level they have designated CO2 and other greenhouse gases a pollutant and are reducing their emission through regulation. But that is not all the United States is doing. California, like Australia and the EU now has a market system that has put a price on greenhouse gas emissions. And at the City level with the United States many Cities are now implementing their own strategies to reduce greenhouse gas emissions as well as the impact of climate change on their cities.

Only in your independent thinking world.

Economics 101 if someone isn't spending money, someone else isn't making money.

If someone isn't making money, in a money based economy, that's failure.

Expenditure increases are therefore....a sign of success.

The question is - who is succeeding? not if

Gary, I have to agree. Spiro's statement does not necessarily reflect the way the economy works. Increases in the price of energy can in fact drive economic activity if it does what it is supposed to do. It can drive investment in alternative sources of energy as well as investment in greater efficiency in the distribution and use of energy. This is what it is in fact doing and will in the medium to long-term actually reduce not only the cost of energy, but also the energy component cost of production.

At the moment within our economy we have inbuilt inefficiencies in energy production, distribution and end use. Up to now we have had relatively cheap energy because we have not factored in all of the actual external costs. Those externalities include pollution as a by-product of energy production. And over the past 50 plus years we have slowly placed a cost on those pollution by-products with industry either have to clean up their production processes and or pay a fee to pollute.

This is simply what has happened with CO2 and other greenhouse gases in Australia as well as the EU and a number of other some other countries and even States like California. We even now have the United States who was not able to get a greenhouse gas tax or market in place, but have now designated them a pollutant and therefore a health issue and regulated as such. All of this actually drives economic growth, not the other way around.

quantity energy demand has been declining in Australia for the past 5 years or so, through price signalling (e.g. carbon price) and efforts to be more energy efficient. So under the Capitalist model, with the emphasis on growth and Corporate models with maintaining or growing income, to maintain shareholder return, prices go up. Seems to be a direct reverse of the supply/demand curve taught in economics.

i interpreted Peters post as indicating that the price signals a shift to greater efficiency in the use of the resource, i.e. energy.

Regulation is vital to an effective functioning market, i.e. the lack of regulation and oversight that allowed the international bankers to create the GFC.

I wouldn't personally rely on business to operate ethicly, somehow ethics and money are not common bedfellows.

Thanks Peter - I think you summed it up pretty neatly and I couldn't agree more, particularly about the use of the market as acore mechanism but underpinned by sensible regulation.

Mixed as my feelings towards Makcolm Fraser might be, I'd argue he was the last liberal prime minister. Howard was a quite doctrinaire neo-liberal (again, I strongly disagreed with him but there was at least a certain consistency and integrity to his position) but Abbott seems to be nothing more than a populist/opportunist. In fact, in a very literal sense, I'd argue that he is merely a 'reactionary'.

How is this to the left of the greens though? I think your definitions of green and left may be very different to mine.

IE. Most of the greenies I know recogniose the market is a very powerful tool and given the right incentives it will go a great way to reduce emmissions

It just seems that you associate liberals with the market therefor everyone else must be against the market which is incorrect

What would employing a few "Green Soldiers" actually do?

"The current party is nothing more than a populist tea-party-style fraud". That's what worries me. I am an historically Conservative voter, but Abbott's refusal to listen to sound scientific and economic advice about carbon emissions, has made it impossible for me to vote for his coalition. We don't hear much about an Australian Tea Party, but their influence is evident in the Opposition's front bench. Malcolm Turnbull, the obvious alternative leader, does not stand a chance against the 'Radical Right'. Poor fella, my country.

Interesting thoughts.

I would suggest that maybe the market system is a bit like the weather. It's principles operate on systemic variables subject to flux, but that hasn't stopped people from attempting to predict what it's going to do next. It also doesn't stop it from forming tornadoes, cyclones and the like. Or raining on a drought stricken area. Or not raining at all.

To an extent, we can regulate what we do that might impact the market or the weather. But ultimately, it's uncontrollable because it is unpredictable long term. Thus we'd only be regulating for key variables and should expect a certain pattern but that pattern includes chaos and order because it's at the bifurcation point and thereby can go either way.

The market, like the weather, operates on cycles and we've managed to speed up and slow down some of those cycles. But in the end, we don't stop the cycles, and we're unable to be sure 100% if any given cycle applies right now, yesterday, or tomorrow.

Like many things with inbuilt uncertainty, there's been oodles of ideologies that lay claim to attempting to control it. From sacrificing humans to the weather god or excusing the sacrifice of human life to the money god, and all shades in between and parallel.

Ultimately, they've all failed. And calling the current ideology of 'market system' what we have is also inaccurate, because all these ideologies are market systems of different stripes, focusing on what that ideology thinks is a key variable. Our current ideology focuses on stressing variations in regulation on the market depending on who is in charge, but in all cases, the profit motive of the market is assumed to be essential. This is not accurate. For just like the weather, it has no purpose, it is just a collection of stuff that happens, sometimes prolific, sometimes quiet. The market is neither for profit or against it. The market is simply a dynamic system of exchanges.

Perhaps, if I have injected a dose of realism here, someone will think of an idea that works.
However, so far, no one has.
And the ideology of it all is quite persistent.
I hope people learn to let go of that, whatever form it takes.

Katherine, you need to revise your title, and to an extent your argument.

Fred, I suspect you're largely right about general price rises and reducing demand.

However, though I'm afraid I can't cite in substantial data, I believe there may be some evidence that the carbon price has encouraged a move towards less emissions intensive generation - though it's very early days to try to trace the impacts of 6 months' worth of a new regime on an industry that, inevitably, is fairly slow to change its infrastructure. So far, it's probably nothing more than, in the face of demand below capacity, generators have simple and sensibly shut down their least efficient systems (e.g. brown coal) and favoured more efficient.

In the end, I think there remains reason to hope that the impact of carbon pricing will be more to do with reducing the emissions intensity of energy generation (which has to be pretty much 100% a good thing, barring possible Jevons effects) rather than more crudely reducing total energy use.

Yeah - go California and the mighty Governator!

I work in organisational environmental management, which requires me to keep track of wider corporate efforts to reduce waste and negative environmental impacts of all kinds, and puts me in contact with all sorts of people in the energy sector, including large genrators and retailers.

A couple of things are very clear to me from what is going on in Australia:
(1) the majority of companies and other organisations (particularly SMEs) are pretty primitive in their efforts to reduce waste and environmental damage, so there's still a surprisingly large amount of energy savings available as quite low-hanging fruit (it really can be things as dumb as turning light off when there's nobody there or turning off the x machine when it's not in use - not just the more complex and investment-requiring higher level of adopting newer technologies) and
(2) since the carbon price (despite the fact that we've had 50% electricity price rises over the last 5 years or so, largely driven by building extra infrastructure to cope with hyper-peak loads from domestic air-conditioners!) more and more companies have suddenly woken up to the need to save energy in their operations - one of the major commercial electricity retailers I've discussed this with is quite amused and concludes that it was often a matter of pig-headed 'principle' that made many companies respond to the typically 10-11% impact of the carbon price when they'd largely just copped the much higher rises from increased infrastructure.

But that's perceptions for you, and one of the reasons why, for all its imperfections, I think the current carbon price policy ends up being quite effective - it's still early days (only 6 months) but, as this article suggests, the evidence to date is quite hopeful.

that may have been true so far, but as we understand more about how we impact global systems, could that also be said in a generation or two?

Dr Lovell

Australia hasn't made the politics too hard. The un-elected and non representative Eurocrats destroyed their European ETS and made the whole thing look stupid.

The Australian governments plan to link our Carbon Tax with the Euro ETS is sheer lunacy. Decisions made by those idiots in Brussels will take no account of the impact on Australian people, be they in hospitals, schools, factories on the farms.

Instead, I suggest a steep levy on all holiday flights out of Australia. It should be called the JetA1 levy. Lets say it adds A$2000 to every flight to Europe. The money raised could build roads and schools and hospitals. It would dissuade many from travelling overseas thus lifting the Australian tourism industry.

Of course I am being silly. After all, many of those who reading this comment are very concerned about the effects of fossil fuel usage on the planet. Sadly, those very same readers do not extend their pious concern to consciously refusing to fly for pleasure.

And that Doctor, explains why the ETS schemes won't work. We don't actually want them to work. We only want them to 'look' like they work. As long as the price of electricity and jetA1 fuel doesn't rise AND we have a carbon tax, we are happy.

As soon as the ETS actually starts to bight and lift energy prices, the ETS is quietly dismantled in all but name. ETS schemes are actually huge communal 'prayers'.

Have a good weekend.

Gerard Dean

"Australian people dangerously apathetic". They are just too busy making a living to take time to examine such esoteric matters as an ETS, so are not engaged in any discussion and are prone to accepting the latest sound-bite from their favourite pollie.

the other issue with direct action, i.e. tree planting, is what happens if you plant a 1000 seedlings, then, through increased fire events, they get wiped out in a day?

Ian L. McQueen: "Global temperature has not increased in the past 16 years."

"Endless repetition of incorrect information does not make it correct"

When are you going to take your own advice?

"The 5-year mean global temperature has been flat for a decade" Dr James Hansen NASA GISS and collator of one of the world temp records
"combined with the stubborn refusal of the planet to warm as had been predicted over the last decade"
Dr James Annan Climate Scientist (renowned for having lost a bet on this topic).

I guess we laugh at them too?

So the choice is the opinions of 2 leading Climate Scientists, oe of which actually collects the data. Or the writings of a "climate blog" known for post editing embarrasing questions and run by a cartoonist. Tough one.

sigh, i'm more inclined to respect the opinion of 1000's of scientists around the world over "lord" Monckton.

Thanks Helen,

You are indeed entertaining. I particularly liked your assertion that the World Bank always taking a socialist view. Gave me quite a chuckle.

Without coal Australia can have plenty of cheap and reliable energy from solar and wind power. Indeed it is the households who have installed solar panels who helped us cope so well with the hottest January on record when so many air conditioners were running.

You are hilarious. Absolutely hilarious.

I make one comment about an idiot chucking tantrums and somehow I support a political party that isn't even left wing, and somehow that also makes me left wing.

Your logic is HILARIOUS.