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Fossil fuel review committee report: change rules to benefit fossil fuels

August 29th, 2014

That’s the unsurprising outcome of the Abbott government’s review of the Renewable Energy Target, undertaken by climate denialists associated with the fossil fuel industry. It’s hard to see why they bothered with the formality of holding an inquiry.

It now looks possible that the Climate Change Authority, of which I’m a member, will survive long enough to conduct a further review. The Authority is answerable to the Parliament, not the government, which makes for interesting times when the two are directly opposed, as at present.

I can certainly see some ways in which the RET could be improved, but I won’t canvass them here so as not to commit myself in advance. I’ll observe however, that the Abbott government itself has removed the strongest argument against the RET, namely, that it duplicates the effect of a carbon price (there were valid counterarguments, which I’ve discussed elsewhere, but it was still an important issue)

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  1. David Allen
    August 29th, 2014 at 11:03 | #1

    Jacqui Lambie’s Chinese invasion had better hurry up. There won’t be much left of value in this country soon.

  2. Rob
    August 29th, 2014 at 11:34 | #2

    JQ, when will the CCA RET review come out and will it be too late to act as a counterargument to the Warburton “review”?

  3. Troy Prideaux
    August 29th, 2014 at 12:22 | #3

    @Rob
    I was under the impression PUP won’t pass any scrapping of either the RET or the CCA?

  4. John Quiggin
    August 29th, 2014 at 12:39 | #4

    @Rob I’m hoping we will make some response, but there won’t be a full review

    @Troy That’s the stated position at present, waiting to see if if holds.

  5. Peter Rickwood
    August 29th, 2014 at 12:40 | #5

    Thinking about this I did some quick calcs:

    Without any subsidy and a 0c/kWh feed-in-tariff, falling PV costs (assume $1.5/Watt by 2020 installed) will make the levelized cost of electricity from solar about 22 c/kWh for installations in 2020 if a household consumes 40% of the generated electricity and simply wastes the rest(*). With a (halved) RET installation subsidy of $0.33 c/Watt, and a feed-in-tariff of just 5c/kWh, the levelized cost falls to 14c/kWh for a household that consumes 40% of their own solar.

    A modest government installation rebate for PV and other renewables makes a big difference by bringing the transition to clean energy forward, and seems a pretty small price to pay for transitioning to clean energy….especially given they don’t want a carbon price and prefer direct action.

    Seems crazy to get rid of the RET….

    (*) $1.5/Watt installed, 3% real discount rate, 14% capacity factor, 25 year life, $20/kWh/year maintenance costs.

  6. ZM
    August 29th, 2014 at 13:01 | #6

    I read in a report on the acceptance of wind farms in Australia that more Australians are in favour of renewable energy being rolled out than they are in favour of pricing schemes. So getting rid of the RET goes against what the majority of Australians favour.

  7. Ikonoclast
    August 29th, 2014 at 13:45 | #7

    The forces of reaction and anti-science fundamentalism are in full control of Australia now. Our future is very bleak. Abbott is simultaneously destroying employment, industry, welfare, education, health, science, new technology and the environment. That’s quite a string of “achievements”. Australia will struggle to recover from this much damage by the wreckers.

    It will never end until we have a salutary environmental disaster clearly attributable to climate change and another great depression, not necessaarily in that order. Both are inevitable now under world neoconservatism.

  8. ZM
    August 29th, 2014 at 13:55 | #8

    There is a global climate protest being planned for September 21st. 350.org are organising it world wide I think, and Get Up is also organising in Australia. If you don’t live in a major city, regional events are being planned, or you can start your own local event.

    https://www.getup.org.au/global-day-of-action

    Also, in Australia there is the Monster Petition. The more signatures on that the better, if you have spare time to collect signatures in your neighbourhood.
    http://monsterclimatepetition.com.au

  9. ZM
    August 29th, 2014 at 13:57 | #9

    I’ll try again without links:

    There is a global climate protest being planned for September 21st. 350.org are organising it world wide I think, and Get Up is also organising in Australia. If you don’t live in a major city, regional events are being planned, or you can start your own local event.

    Also, in Australia there is the Monster Petition. The more signatures on that the better, if you have spare time to collect signatures in your neighbourhood.

    (Both can be googled/duckduckgoed)

  10. Kel
    August 29th, 2014 at 14:08 | #10

    Yes it amazed me how indifferent I was to the announcement. Garbage in garbage out.

  11. Donald Oats
    August 29th, 2014 at 16:35 | #11

    Dick Warburton, on radio this morning, made some telling statements (according to the Guardian online news article here):

    Warburton said the Coalition’s emissions reduction fund (ERF) – which has not yet passed the Senate and on current indications may not pass – offered the lowest cost of abatement, although the cost of abatement it would achieve has not been quantified by the government because it would be set by a “reverse auction” and legislation setting it up has not passed the Senate.

    [I've put in bold the words of interest to me.]

    In other words, if I am hearing this correctly, Warburton is saying that a reverse auction give a cheaper abatement cost than other schemes, but they have not actually costed the reverse auction scheme? This really does my head in: how do they know it is cheaper if they haven’t costed it?

  12. Peter Rickwood
    August 29th, 2014 at 16:46 | #12

    @Donald: because they just know, ok. Trust them. If they started opening themselves up to evidence, where would it end? Climate Change would become a reality, they’d have to shaft all their loony mates at the IPA and start thinking for themselves, etc etc. Way too hard. Better to stick to knowing things without evidence.

    PS: Are you the same bad-back mathematician Donald Oats who worked at CSIRO/CMIS for a while as a software engineer?

  13. August 30th, 2014 at 03:10 | #13

    I have a blog post up with an unedited Google translation of a release by a Chinese energy consultancy on the state of China’s coal industry. It’s terrible, if you a Chinese coal miner or mine owner: falling production and prices, rising stocks, collapsing profits, even some miners going unpaid. For almost everybody else, it’s splendid news: the long-awaited peaking of Chinese coal, coming a few years early.

    Splendid for almost everybody else. The notably rare exceptions include Australian mining companies and Tony Abbott’s government. Exports to China are finished. India? Modi has decided not to impose anti-dumping tariffs on imported solar panels, and is doubling down on solar and wind as the only realistic and affordable path to fulfilling his campaign promise of mass rural electrification.

  14. Paul Norton
    August 30th, 2014 at 09:59 | #14
  15. August 30th, 2014 at 10:49 | #15

    @James Wimberley
    Chinese coal energy imports have dropped by about 8% over the last few years and thermal coal export prices have dropped to what they were around 2004. This does not appear to have made any impression on the Australian Coalition government. China really does not like having to import Australian coal, but even the most zenophobic of Coalition politicans appear unable to grasp this point. They live in a dreamworld where China will continue to import our coal for decades because we’re good buddies or something.

  16. August 30th, 2014 at 17:57 | #16

    @Ronald Brak
    Your typo “zenophobic” is beautifully apt: rejecting wisdom and self-awareness.

  17. Hermit
    August 30th, 2014 at 18:40 | #17

    From memory China has about 1,350m people to our 23m. Their emissions are about 10 gigatonnes to our 0.5 Gt approximately. Comparing per capita emissions we have
    (1350/10)/(23/0.5) = 135/46 call it 3 with Australia the bigger villain in relative terms. However perhaps only 300m of China’s population are what we’d regard as the middle class here. Therefore for Australia to criticise China recalls the phrase let he who is without sin cast the first stone. On the other hand we all need less absolute emissions.

  18. August 30th, 2014 at 19:15 | #18

    @James Wimberley
    Thanks, but that was no typo. I just can’t spell.

    And I guess my point that the energy content of China’s coal imports has fallen 8% while tonnage has only slightly fallen is a little too subtle for people who have repeatedly demonstrated they can’t count, or at least are disinclined to.

  19. August 30th, 2014 at 21:17 | #19

    @Hermit
    Hermit: I’m not Australian and not criticising China here. To whom are you responding?

  20. Fran Barlow
    August 30th, 2014 at 22:21 | #20

    Coal is not cheap, apparently:

    http://bit.ly/1qRwpH0

  21. Hermit
    August 30th, 2014 at 23:03 | #21

    @ JW I’m putting it out there to whoever lurks in the shadows. There have been articles (eg in Crikey and Business Spectator) that say we should unilaterally carbon tax everything imported from China to give them a hurry up. China’s 7 plus tonnes of emissions per capita now exceeds Europe I believe but their recent production rate of cement and steel seems likely to wane.

    Garnaut and others are saying China will hit peak emissions before 2020 but the Chinese had been saying 2030. Note they are planning a gas pipeline from Siberia too bad if they upset Putin the way Ukraine has. Our magnificent 5% reduction from year 2000 emissions will only take us to 500 Mt or so by 2020 when China could still be emitting 10,000 Mt. If we tried much harder we might have the moral authority to put carbon tariffs on Chinese goods. But we won’t. I note Direct Action seems to have gone quiet perhaps the hope is it will be forgotten about.

  22. Garry Claridge
    August 31st, 2014 at 10:30 | #22

    @Hermit
    Yes, taxing imports makes sense. Generally, imported goods are cheaper because of economic free-rides in the production process. Somebody has to pay for the external costs, now or in the future.

  23. David Irving (no relation)
    September 1st, 2014 at 17:26 | #23

    @Ikonoclast
    I heard a rumour that Judith Sloan is on Hockey’s short list for next Treasury Secretary. If true, it just about guarantees Australia, at least, will slide into a full-blown depression within six months of her appointment – she’s a second-rate thinker with third-rate ideas.

  24. Hermit
    September 1st, 2014 at 18:12 | #24

    @Garry Claridge
    Judging by our late carbon tax and the EU ETS carbon pricing schemes leak like sieves. Primary metals producers got 94.5% then I think 90% c.t. exemption. Bluescope Steel suggested a tariff on imported steel which I estimate should have been 1.7 tCO2 X $24.50 or about $42 per tsteel.

    That would be on top of an FOB import price of ~$700. Maybe it wouldn’t save our steel makers but may help niche producers. It means when Chindia buys both iron ore and coking coal from us it comes back with a penalty. Carbon leaks have to be plugged if ever an ETS on on the cards, even Clive’s zero starting price version.

  25. Hermit
    September 1st, 2014 at 18:14 | #25

    $25.40

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