I usually wait a day or two before reposting my Fin column. But the Liberal Party is such a rapidly moving target that this column, drafted on Tuesday, looks prescient in retrospect, but may well be obsolete by tomorrow.
Apologies in advance if this gets posted multiple times. The server is flaky, so I’m using Posterous which works, but sometimes too well. Please comment on the first (lowest on page) version.
Attentive readers of the Letters page may have noticed a letter from The Hon Wilson Tuckey MP (Quiggin sticks to problem not solution Letters 24/11). Mr Tuckey gave his account of a discussion of climate change policy held at Parliament House, organised by the Federation of Australian Scientific and Technological Societies Great Barrier Reef Climate Change Alliance, in which he and I took part. As is usual in such cases, I had a rather different recollection of events. But, since Tuckey appeared to be, in Malcolm Turnbull’s words a fringe figure of the far right, I saw little value in responding.
Now, however, the situation has changed. As one of Turnbull’s earliest and most vociferous critics, Tuckey can consider himself vindicated by the decision of the Liberal Party to replace Turnbull with Tony Abbott, someone whose views on climate change are much closer to his own.
More significantly, as Tuckey himself has pointed out, the proposals presented on his website http://www.wilsontuckey.com.au now represent the closest thing the Liberal Party has to a climate change policy. It may therefore be useful to examine these proposals, and, in the process, to recapitulate some of the points I made during our meeting in November.
As was noted in Tuckey’s letter, I did not discuss the specifics of the government’s ETS policy, canvass alternatives such as a carbon tax, or speculate on the amendments being negotiated between the government and the then leadership of the opposition. The position presented by the Great Barrier Reef Climate Change Alliance was that a 25 per cent reduction in emissions was needed by 2020, and that a market-based emissions reduction policy should be the central approach. We did not seek to promote one market-based policy over another, and my answers to Tuckey’s questions reflected that.
I was however, quite happy to explain the merits of a primarily market-based approach as against a centralised command-and-control solution, in which governments seek to determine and impose by fiat, particular technological fixes for climate change. Within a market based framework, there be room for some policies, such as feed-in tariffs for solar energy, aimed at nudging decisionmakers to adopt new technologies. But the central element must be to ensure that there is a price attached to carbon emissions, whether through taxes or through tradeable permits.
A visit to Tuckey’s website reveals a different approach. Tuckey is an enthusiast for the tidal power potential of the Kimberley region, as indeed am I. Given the incentives associated with a high enough price for carbon, and reforms to the National Electricity Market to encourage more investment in long-distance transmission lines, there is huge potential in tidal energy.
But such an incentive-based approach is of no interest to Tuckey. Rather, he suggests ‘To respond to these problems the Government should take an up front role investing in and developing Australia’s only significant and predictable renewable energy resource which is to be found in the tides of the Kimberley.’
Tuckey also proposes extensive public investment in High Voltage Direct Current transmission lines, noting that ‘China will not have an ETS. It will invest in Hydro, Nuclear and other renewable energy. Its Government is already building an extensive HVDC network.’
There are strong arguments for a return to greater reliance on public investment in energy infrastructure. But, in the context of a policy response to climate change, it is important to avoid ‘picking winners’. There are many candidate technologies for reducing our CO2 emissions, ranging from nuclear power and ‘clean coal’ to extensive investment in energy efficiency.
The most cost-efficient way to choose options for emissions reductions is to ensure that investors in energy infrastructure, public or private, face a price for each tonne of carbon they emit, and earn a return for each tonne they prevent. If that is done, standard commercial criteria will select the most cost-efficient path.
Tony Abbott has effectively ruled out such an option. Having denounced the government’s emissions trading scheme as a massive new tax, he can scarcely embrace the main alternative, a carbon tax. On the other hand, he has committed himself to achieving the emissions reductions promised by Labor.
In these circumstances, the Chinese approach endorsed by Wilson Tuckey is probably the only feasible option. It is, perhaps, surprising that, having elected its most conservative leader ever, the Liberal Party may have to turn to the Communist Party of China for policy guidance. But politics makes strange bedfellows.
John Quiggin is an ARC Federation Fellow in Economics and Political Science at the University of Queensland.
John Quiggin 
This is rather ironic for a ‘liberal’ party – clearly now a conservative party. Of course the party may split asunder on ideological lines – as did the ALP and the DLP in the 1950s. The irony being that the DLP split from the Labor Party to distance itself from the threat of communism. If the conservatives in the Liberal party embrace a (fiscal) command and control solution to climate change then they can have little objection to other forms of fiscal stimulus in the presence of market failure (on the one hand the market is the solution to the GFC – it will correct itself without a fiscal stimulus).
Perhaps Kevin Rudd anticipates an ideological split that will enable the legislation to pass – the true small l liberals in the Liberal party must surely have more in common with the ALP and its free-market solution to climate change.
These liberals (and possibly libertarians) must argue that a carbon market is not a tax: it is the privatisation of the unregulated atmospheric commons. The key question to answer is: how should these property rights be distributed?
My concern is that the compensation of shareholders amounts to an unequal enclosure of these commons. Whereas trade exposed industries have a case, I’m entirely unconvinced that an argument can be mounted that risked capital entitles an individual to a greater share – other than a morally hazardous one: the expectation that risked capital would be compensated has historically never been ruled out and remained to fester and distort markets.
Good article, John.
In regards to the comment; “explain the merits of a primarily market-based approach”, I would be interested to see this done (specifically) in the context of addressing Clive Spash’s ‘The Brave New World of Carbon Trading’, which remains the most convincing argument against (that I am aware of).
While I do not have the time or background to really probe the ETS system and carbon trading, prima facie “putting a price on carbon” seems to guarantee we accept carbon emissions.
Presumably carbon emitting producers will pass on the extra price to customers, who will still purchase the same quantity, because they have been given extra cash by government.
If I was a big commercial entity, I would love only having to worry about a price on carbon, if I could conceive that I can pass it on to customers who get additional purchasing power from government.
There are several Bills floating around – one is to compensate households. I wonder what the detail is.
,
I think the case could be made for slashing the $43 bn broadband rollout and spending a lot of the money on HVDC power cables. With wireless and satellite internet we don’t need fibre optic cable everywhere. I suggest two possible routes for HVDC lines. One across the Nullarbor joining WA to SA. Currently WA and NT are disconnected from the East Australia grid. South eastern gas basins like Bass Strait will run out long before WA and rather than build a pipeline send electrons instead. The other desirable HVDC cable would be to replicate the existing Basslink connection which has flow constraints. Tasmanian hydro dams have a lot of unused capacity and could be used as virtual batteries. Surplus power from any source could be used to pump water back up to the dams, even in drought. It will be recovered via controlled water release, then pond water pumped back again later.
As for costs I think we are looking at at least $2m per kilometre for above ground cable with gigawatt capacity. The AC-DC inverter rectifier stations may cost $100m or more each. The cost of modifying dams for pumped storage is unknown but would be tens of millions of dollars for each site. The money is already there, it just needs to be partially redirected.
Not at all. Think of it as the opposite of a loyalty program. In a loyalty program, one gets credits for purchases that can be redeemed only with goods or services from the operator of the program — so the benefit is relatively illiquid or non-convertible.
If however, you push up the price of a good or service and then compensate people with cash, then the benefit is relatively liquid and convertible because you can spend your cash as you please. If someone burns less carbon they get to keep the cash. So your position is positive if you take the option of reducing. If someone compensates me for rising petrol prices and then I use that money to fund a loan for a bike and use that instead of the petrol, I’m ahead one bicycle less depreciation and recurrent cost of operation.
Plainly then, the incentive is for rivals to provide services that deliver equivalent utility but at a lower carbon cost. If a gas plant is less carbon intensive, then people can pay the premium for gas without loss. If they use the money to reduce their demand for electricity and heat (e.g better insulation, smart devices) or simply accept cooler and shorter showers they are ahead financially.
@iain
Spash’s paper remains unpublished, it seems, but I have discussed the relative merits of carbon taxes and emissions trading schemes quite a few times. My short take
(a) The differences are minor compared to the similarities
(b) The big positive for emissions trading is that it fits naturally with a target-based international agreement.
@Hermit
I think HVDC not only provides connections for new power sources it improves network efficiency. By connecting a range of sustainable energy sources (with some non-sustainable ones in the short/medium term) it provides the ability to overcome some of the reliability issues that all green power options are hindered by. Waves, solar and wind are not nearly as reliable as coal, but connect them all together and you get pretty close.
There are also tidal options in north Queensland, and hot rock options in central and western Queensland that could be connected in.
Pity that the Sims review determined that HVDC was not the right answer for further transmission for North West Queensland, despita the IsaLink project being advocated by the market. Rod Sims determined that HVDC wasn’t proven and that it would be better for Queensland to stick with the tried and true AC transmission or maybe do an upgrade of Mica Creek (gas fired). So government decided to run a 12 month market competition to see what outcome was best. But with a report that actively recommends against HVDC and consultants who are obviously not fans of the approach it is hard to see Andrew Fraser Neither really represent a proactive approach to green energy. Andrew Fraser as the Minister for Economic Development taking this one on.
Ironic that the libs reject a market approach. And more Liberal voters that ALP voters have waterfront property that will be flooded!
It’s good to see constructive action from Mr Tuckey. Restores my faith in the man, it does. I do wonder, however, where the funding is to come from, given that the Labor Party, with its profligate stimulus packages, is racking up debt for us and our children, yea, even unto the tenth generation.
The thing that really puzzles me is that I’d thought him an AGW skeptic. And it can only be fortuitous that the investments suggested fall within his electorate.
Fran
Plainly then, the incentive is for rivals to provide services that deliver equivalent utility but at a lower carbon cost.
This presumably is the plan. But can it work if compensated householders essentially have the means to purchase according to their previous preferences?
Or is this, current ETS scheme, the only way to get at least some scheme up (supported by some business) – which can be adjusted later?
I cannot see how rivals get much incentive as the market has been disrupted by household and other compensation.
But I don’t know what the actual numbers are.
A market based approach won’t select nuclear if nuclear is prohibited. Lifting the prohibition should be a priority. And I’d even rather spend $43 billion of taxpayers money on nuclear power plants than the NBN although not spending it at all would be best. An ETS will be harder to get rid of than some excess government assets. Think of our children!!
Obviously it seems like both major parties are going to give us sub optimal options. I think I’ll vote LDP.
Is there in fact a prohibition? I had the impression that (apart from a plan abandoned back in the 1960s) no one had ever proposed a nuclear power plant, so it’s never been banned.
@TerjeP (say tay-a)
I think Ill vote Green Terje.
TerjeP is just being ridiculous.
OK, just because some monkeys have captured the Liberal party and are preparing for workers slavery and a nuclear society, why should this stink spread through the internet?
Why spend money on nuclear power plants when Howard research showed they were uneconomic unless they could suck on the public tit.
TerjeP does not seem to realise that some isotopes in high-level waste have half-lives of (wait for it)….
24,000 years.
And waste has to be isolated for 10 half-lives minimum – longer to decay to background levels.
In this time all continents have moved over 10 kilometres in opposing directions. There is no way geological deposits of wastes can be relied on in these circumstances.
Only “econorats” call for nuclear power because it quickly concentrates energy production in the hands of a company and, based on monopoly analysis, huge profits can be made.
Nuclear power makes economic sense but not social, political or environmental sense.
Only idiots cry nuclear.
quanratined tse n
Nuclear plants have been proposed for Australia. in particular for Jervis Bay. Jon Stanhope (ACT Chief Minister) put out a press release some 3 years ago on this, supporting Jervis Bay as a site.
No doubt nuke-lobbyists are all revamping or updating their previously rejected Powerpoint presentations and etc for a revamped onslaught on the Australian body politic.
I once heard Wilson Tuckey call for a nuclear waste dump in his electorate.
So all the nuclear interests are poised to swoop, particularly if they can get the right Premier into office.
Chris – do you know how much nuclear waste the fossil fuel business produces? Here is a hint:-
http://www.scientificamerican.com/article.cfm?id=coal-ash-is-more-radioactive-than-nuclear-waste
We already effectively crop dust a proportion of the population and land mass with thorium and uranium. Switching to nuclear power would decrease our exposure to nuclear waste by a very significant amount. Switching to fast breeder reactors (eg the Integral Fast Reactor) would actually allow us to reduce the worlds nuclear waste as existing nuclear waste could be used as fuel stock and mostly used up. In about 700 years time we might need to stop reducing waste and start increasing it again but the year 2709 is quite some way off. And the small amount of waste that does remain after use in a fast breeder reactor typically decays to background levels within 100-300 years. A time frame which is shorter than the life of chemical encasements such as glass.
If all our modern energy usage (including transport) was produced from nuclear then the waste per person over a life time would be smaller than a golf ball.
Nuclear power is much safer than current technology.
The only good argument against nuclear is weapons proliferation. And that argument is weak.
Chris
It is an open question whether nuclear power would make economic sense if all externalities over the life of the plant and its dismantling and long term storage of waste were included.
Plants were proposed in Vic, SA and NSW, and all plans were abandoned by the early 70s. Nuclear power stations are banned in NSW, Vic and Qld.
John – my understanding is that nuclear power is explicity banned in some states (noteably Queensland) and implicity banned federally via licensing restrictions.
Obviously regime risk will remain a barrier to investment until we have a framework that insulates investors from the risk of policy changes, and construction delays due to political factors. We should have a good look at the new US regulations that license nuclear power plants by type (rather than per plant) and which give development consent with financial protection against any subsequent policy changes. Historically nuclear has been expensive primarily due to political factors.
We do have one nuclear plant although electricity production is not it’s primary purpose. It has 20 MWatt capacity and is located in Sydney and 99.99% of the time nobody gives it a second thought.
Neither of these statements are correct. The first relies on a false definition what constitutes “waste”. The second makes the assumption that nothing ever goes wrong in nuclear plants, which we know for a fact is false. And in making the second one, you’re forgetting that were discussing this in the context of a CPRS, which seeks to get rid of coal anyway.
You’re working with a false definition of “nobody”. It gets mentioned in my local paper just about every week.
Of course things can go wrong. However this is true of all manner of things. Airplanes can crash and factories can explode. None of us want another Bhopal disaster. I would not want a Chernobyl style reactor built anywhere in the world. However risks need to be put into perspective. Nuclear power even including it’s most deadly accidents has a very good safety record compared to other industries that we routinely tolerate.
Obviously I meant 99.37%. It must have been a typo. 😉
Doug
That is an economic argument and, for sure, IF the only provider (post fossil fuels) is nuclear, then its market price will be hiked to cover any and all costs.
This is not the point. The argument w.r.t. nuclear is not economic. The arguments are social, environmental, moral and political.
There is also the issue of nuclear weapons which is a study in itself. 10 nuclear explosions of the larger type, risks nuclear winter (according to CSIRO atmospheric research) at least in one hemisphere but then, models show, it flows to the other.
There is also the issue of rare breeches of safety but multiplied by an increasing number of nuke plants.
How can anyone propose storing waste for 1,000 years and more, particularly if the net waste grows at say 2% a year? For every acre of waste today, given just 2% growth you then need 400 million acres of so called storage in 1,000 years. It does not make generational and moral sense to even consider this as a option.
More nuke plants more waste. Presumably waste will grow at the same rate as population plus energy consumption. What % growth in net waste (low and high levels) are you thinking of? What is your calculation for 1,000 years out?
Nuclear power is completely irrational and immoral on all counts except short-term profiteering capitalist economics.
The LP Right are always accusing Pr Q of being a socialist.
So its nice to see the tables turned.
JQ – why not put up an article on the nuclear topic and invite a fulsome debate.
Chris – Fast Breedor reactors would reduce our nuclear waste stock piles. As in make them smaller. Negative growth. For every acre of waste today a fast breedor reactor would result in less than an acre of waste in 100 years time. Less again in 200 years. Less again in 300 years. Less again in 400 years. And so on.
@TerjeP (say tay-a)
Terje … fulsome means disingenuous, despite the neologistic usage.
Try meaning number 1 from the following:-
http://en.wiktionary.org/wiki/fulsome
Try this, Terje:
Just as you didn’t understand the point about “nobody”, getting it mixed up with percentage of time, you don’t understand this, either.
As a debator, you’d make a good used car salesman.
TerjeP #16 has claimed that switching to nuclear means reduced exposure to nuclear waste.
I don’t know how he got this idea. Maybe he misread the Scientific American article he cited, but his explanation was vague and subjective. Anyway the editor of Scientific America added in a explanatory note indicating the comparison was between unshielded fly-ash and shielded nuclear waste.
Of course “shielded” nuclear waste reduces exposure to radiation, even to levels lower than un-shielded fly-ash. So what? This is not relevant. This is the type of confusion nicotine and climate deniers also use peddling their various causes. Has TergeP lost his thinking cap?
The nuke lobby always claims that the next generation of reactors will be cooler, safer, and will produce less waste etc etc. The so-called Integral Fast Reactor is the latest example and a research project that has no commercial purpose. It is not the type being built or proposed today.
I get very fed up with statements like;
“If all our modern energy usage (including transport) was produced from nuclear then the waste per person over a life time would be smaller than a golf ball”;
with no evidence, argument, data, or logic. The reference to “life time” is irrelevant. No commercial reactor is built to last a “lifetime” and we are now decommissioning older reactors. More than a golf ball of waste has resulted from these reactors – all in less than a “life-time”.
The fuel rods in Lucus Heights are bigger than golf balls, so TerjeP needs to explain how many golf balls of spent fuel rods come out of Lucus Heights or maybe he can explain how they shrink them down into a golf ball.
I wait with interest.
SJ – as a human being your a pain in the arse.
The funny thing is nuclear power stations entail shielding. The point of risk mitigation is to mitigate risks. Cars without brakes would be a menace also.
TerjeP at #27 now switches attention to ‘Fast Breeder reactors”.
He is just confused. Anyway the facts on fast breeders are pretty clear see: Breeding Fools .
Notice the role of Plutonium 239.
Notice the comments on changes to the amount of fissile material.
Notice the comments on safety.
The Indian program is sheer, utter, lunacy. QED.
Fissile material increases. However if the nuclear fuel includes depleted uranium (as indicated in your article) then nuclear waste is being used up.
Chris Warren Says:
You’re barking up the wrong tree here. The Scientific American article compares emissions from the two different types of power stations, but ignores any waste produced in uranium mining or refining. That’s where the comparison goes pear-shaped.
Terje, no doubt you thought your teachers and parents were pains-in-the-arse too. Children always think that. Some people try to learn from mistakes, though, and there are lessons here aplenty for you.
The nuclear waste issue for IFRs is outlined here:-
http://en.wikipedia.org/wiki/Integral_Fast_Reactor#Nuclear_Waste
Greg Hunt is on lateline right now arguing that “direct action” (ie. picking winners) is better than a carbon tax/trading.
SJ – perhaps. However you’re still a pain in the arse.
@SJ
Your rebuttals to Terje were semantic and petty, and did not address the core of the argument.
Is the primary problem, then, to deal with the waste issue? If so, the Swedish model looks like a good one.
There are plenty of sites in WA, the NT and in outback Qld where really, really old bedrock can be reached in 500m worth of digging and there is a lot of experience in getting there. 2km or even 3km could be used if needed.
Disposal is AFAICS a solved problem. We just need to do it.
I can see that your reading comprehension is even worse than Terje’s.
John – SJ is not a pain in the arse because of the petty remarks here. SJ is a pain in the arse because of petty remarks all the time for years on end.
Aw, diddums. Did the smart kids beat you up again?
Andrew – better to use the nuclear waste where you can rather than throw it away.
SJ – you are a childish smart arse. I’ll grant you that.
@Fran Barlow
I suspect comprehensive or detailed or rigorouswould have better served your contextual intent than fulsome.
@Fran Barlow
the merriam-webster defn disagrees
http://www.merriam-webster.com/dictionary/fulsome
as does the OED second edition 1989
although both show that ambiguity is there – note that the Oxford points out that the negative connotation is “Now chiefly used in reference to gross or excessive flattery, over-demonstrative affection, or the like.” So an assumed context for positive meaning is possible where an explicit context does not disambiguate the meaning.
I’m going into this level of pedantry because this may be the only time I’ll ever agree with terjeP
Re Andrews Reynolds comment, I’d presume he’s suggesting that he’s talking of sites porosity/ immunity to water seepage both ways etc.
A good example of an approach that conforms with the notion of
sustainability”.
My problem as ever is, what seems a refusal by both governments and corporations to follow this sort of science: Tasmanian rainforests, James Hardy, Lib
Right’s doctinaire ideology on climate change, similar medievalism, plus graft from groupings like the NSW Labor Right; the Tobacco industry. Some of above is venal; some to do with pig headedness.
How do we “keep the bastards honest”, particularly when science seems to produce such violent reactions in these sorts of political formations, when presented?
Talking nuclear is talking dreamtime bigtime.
It takes 10 years to build them and that is after all the compliance has been achieved (which could be another 5 years) and there is no government in Oz that will give the go ahead and cop 15 years of nimbyism and bad politicking.
So even discussing it is avoidance of the main issue and an indulgence.