Severe weather alert: a busy hurricane season
That’s the forecast for 2011.
The US National Oceanic and Atmospheric Administration (NOAA) is predicting a 70 per cent chance of 12 to 18 named storms, six to 10 of which are likely to reach hurricane force – with wind speeds of at least 119 kilometres per hour.
A normal season would have 11 named storms, six of them hurricanes. During 2005, which brought us Katrina, there were 28 named storms.
Record extreme spring precipitation in the US
Climate Progress has the story.
Jeff Masters says that the extreme spring fits what you’d expect during a la Nina season, but
it also fits the type of precipitation pattern climate models expect to occur over the U.S. by the end of the century due to human-caused warming…
Kevin Trenberth says it won’t happen in the same places each year – last year Russia and Pakistan, this year in the US – but:
the kinds of changes being recorded are just what we expect and have been predicted for the human influence on climate.
What drives tropical deforestation?
Definitely corporate interests rather than smallholder farmers, according to Climate progress.
Here’s a full-size look at the graphic:
“Croplands” includes soy in Latin America and palm oil in Asia. The post mentions campaigns against Nestlé for palm oil in Kit Kats, against Mattel for packaging Barbie and palm oil in Girl Scout cookies.
Only Nestlé took any notice, it seems.
Algae for airlines
According to Climate Spectator technical approval has been given by ASTM International to use fuel processed from algae and other organic waste and inedible plants for up to 50 per cent of their fuel needs.
The preliminary decision is expected to open up the $140 billion a year aviation fuel industry to a host of new biotech and biofuel competitors and suppliers, including several algae start-ups in Australia.
The CSIRO in recommending that Australian airlines should aim to source 5% of their total jet fuel requirements from bio-stock by 2020, rising to 40% by 2050 lacks ambition, I think. We’ll have to do better than that if we want to continue flitting around the world.
Quick gas to balance the intermittency of wind and sun
Whatever you concluded from the solar PV thread there will be a need to smooth intermittency in the grid.
The same Climate Spectator item (see Building Bridges) an upgraded combined-cycle power plant known as KA26 has been developed by French energy supply giant Alstom which boasts a higher efficiency rate of 61%, and can ramp up from low load to deliver 350MW to the grid in less than 15 minutes.
Counting carbon
This one is perhaps worth a separate post, but here goes. Climate Spectator draws attention to the growing difference between nation states counting the carbon they produce and the embedded carbon they consume. This is starting to become a factor in the politics of climate change with the Chinese “already stressing that addressing ‘embedded carbon’ is a critical part of reaching a fair post-Kyoto global agreement.” From this graph it is easy to see why:
The example of the UK is instructive:
according to the Carbon Trust, net imports of carbon represented 34 per cent of the total in 2004, growing to 42-46 per cent by 2010, and could reach 73-96 per cent by 2025.
CO2 is not the only problem
We should also think about nitrous oxide, molecule for molecule 300 times more potent than CO2, says Professor Richard Conant of the QUT’s Institute of Sustainable Resources.
Professor Conant’s latest research suggests the best way to reduce greenhouse emissions is to improve the way nitrogen fertiliser, which releases nitrous oxide, is applied to crops throughout the world.
It’s just that the article left me a bit confused about how exactly that would be achieved.
Remember also black carbon (soot), ground level ozone and methane
That’s according to a new report on “fast action pollutants” compiled by an international team of more than 50 researchers chaired by Drew Shindell of the National Aeronautics and Space Administration (NASA) and released at the climate change talks in Bonn.
“There are now clear, powerful, abundant and compelling reasons to reduce levels of pollutants such as black carbon and tropospheric ozone along with methane: their growing contribution to climate change being just one of them.”
Climate change benefits include the action of soot on ice and in the release of methane from permafrost. Then there’s ground level ozone:
Reductions in ground level ozone could also contribute to reduced crop damage equal to between one to four percent of the annual global corn, rice, soy bean and wheat production.
New batteries and stuff
Readers who didn’t go the distance on the solar PV thread may have missed references to new technologies, such as PolyZion zinc-plastic battery and the ‘Cambridge crude’ slurry battery linked to by John D. These may be important for local home storage and electric vehicles.
Then per kind favour of Lefty E we had a link to the synthetic tree that removes CO2 from the atmosphere 1000 times faster than a real tree and has the potential to remove 12% of the carbon from the atmosphere, it is claimed.
It’s do or die for Labor and the Greens
“It’s his way or the highway!”
That’s Christine Milne, also inclined to be stubborn at times, accusing Martin Ferguson of holding out for concessions on fugitive emissions from mines, as Labor and the Greens enter a potential death struggle.
failure to get a carbon price in place in this term of government would be a defeat from which the Labor party might never recover. The Labor members of the committee, being Julia Gillard, Wayne Swan and Greg Combet, are all too well aware of this fact, even if Ferguson likes to give the impression that he’s not.
The article suggests that voters may not be inclined to forgive The Greens also if they fail to find a compromise this time. At stake also is the steel industry, but the main game must be around the price of carbon itself, surely.
Here is a link that will add some perspective to the NOx issue as far as future aviation is concerned
http://blog.cafefoundation.org/?p=3460
JohnD @142 in the PV thread put up a very relevent on technology to smooth renewable output.
On the synthetic tree, there is a very relevent use for this technology. The big problem for algal oil is fuelling the algae. As this forms part of my portfolio of eenrgy solutions that I feel will “save the world” perhaps but more specifically “save my family” I looked at Lackners earlier work and reformed that into a breeze powered high density CO2 collector which can be flushed to provide CO2 at a rate that algae require for optimal growth. It should be appreciated that flooding feed water with buld CO2 acidifies the water and kills the algae. When dealing with everything to do with plants and water it is a delicate balance, and the general rule for most life forms is that they evolved to thrive with scarcity of resources.
So algal oil is a major component of our future adaptability, in my opinion, and the front runner technology is NASA’s Omega system, or other systems along these lines. Look it up, it is a good read. Dr Jonathan Trent will be your guide. As you follow the story through you will come to realise that for algal oil the key ingredients are nutrients and CO2. You should also come to understand how and why oil was formed in the first place in river deltas.
One more little tid bit and then I really have to do some work, at the Grattan Institute website there is a very interesting graph
http://www.grattan.edu.au/programs/energy.php
on the left hand side of this page. What do you think.
Bilb: I think algae development should focus on low tech, saltwater based systems such as this one in the Pilbara.
Saltwater because of shortage of freshwater and low tech because the areas required to get enough sunlight are too large to make the collection and injection of CO2 from power generation etc too complex.
That’s a very interesting graph, BilB. It looks like Australia has enormous scope for improvement.
I wonder if it’s because of agricultural practices?
Ring them up and ask, DI.
JohnD
I’m amongst those who was very enthusiastic on algae when I first came across the idea in the last decade. For years, there was scarcely a conversation with me about renewables that didn’t get around to talking about it.
In recent years however, I haven’t seen anything published that suggests that the EROEI numbers are large enough to make a difference to fuel at the scale we would want it. Unless we could get EROEI up around 10:1 (or have most of the input energy come from very poporly dispatchable or diffuse sources) and get it down around the cost of oil with a carbon price, the future would seem doubtful.
While it certainly might play a useful and cost-effective role in biosequestration (or possibly as an alternative to high value usages such as food, cosmetics, production of polymers) etc to date I’ve not come across any study bearing it out for fuel at commercial scale. There was a recent article on The Science Show that talked about aircraft fuel but again, there was little in the way of numbers.
If you can produce quality food with it on marginal land with minimal potable water input, then this would still be worthwhile of course, given how energy-intensive food tends to be.
oops enthusiastic
on{about}JohnD @ 4,
The Pilbara Project will most likely be commercial but mainly because of their focus
“on the high yielding omega-3 market”
which yields much higher returns than can be achieved from biofuels. The problem with this arrangement by comparison to the Omega project are the issues of evapration and operation. The omega system floats and is constantly stirred by wave action. Its feedstock comes from sewerage outfall for both nutrients and CO2. It does not compete for real estate. There are a lot of plusses for which every one in the land based system there is a minus of some amount. The Omega system would work well for Sydney and Brisbane.
My interest is for personal algal farming. My module size is between 10 and 100 metres. The aim is to find a solution for the balance of liquid fuels desireable after GenIIPV has provided all other energy needs. The initial formula is a floating one though and intended to service the needs of live aboard boat owners. I have thought through most of the considerations to be able to build a micro GenIIPV system into the deck house roof of a boat to produce up to 1.6 kilowatts. The algal oil would be used for powering a diesel engine, and for the cooking stove.
Fran: I have an open mind on how well algae based bio fuel. My focus is on a world where emissions have to be a fraction of where they are now, fossil carbon costs an incredible amount, fresh water is scarce and the world is struggling to feed itself let alone use agricultural land to produce bio-fuels. Salt water algae is starting to look like a good long term prospect.
It might be a good thing for Labor if the Greens or independents killed the carbon tax as soon as possible. Think about it:
I we get a carbon price of between $30 to 20/tonne it is most unlikely that emissions will drop or contracts signed for climate action before the next election. The government goes into the election with all the pain and fuss of a carbon tax, Abbott blaming every price increase on the tax and no real action to show. If Abbott wins it will be easy for him to kill the tax because he won’t have to compensate anyone who made decisions on the basis of the tax because the tax was not high enough to justify investment.
On the other hand, if the carbon tax is killed quickly in a way that allows Labor to blame someone else for killing it the government can get on with doing things that really will make a difference without the high and sudden price increases associated with a carbon tax.
Somehow I am not surprised that the carbon tax has turned out to be just as complex and just as hard to defend as the CPRS. Julia is a slow learner.
Sinclair Davidson on the ABC Drum rather nastily points out that the Productivity Commission report
It should be hardly surprising that economy wide taxes have been avoided. An economy wide tax comes with a number of problems:
1. There will be unproductive price pain for cases where:
a The tax is not high enough to justify action.
b The people who are supposed to take action simply can’t afford to do so even if the investment is attractive.
c The entity who has to pay for the change is not the entity that benefits.
2. The carbon price will not be very effective for cases such as electricity consumption and transport fuel where price inelasticity means that little is gained from the price increases.
3. Something as crude as a carbon tax is not appropriate to drive something as complex as the transition to low emission power generation.
Garnaut and the government need to have a rethink.
I give up, Australia is not worth saving.
DI(nr) @ 5, I think Australia’s main problem is electricity from coal, plus long distances we cover in transport. Certainly agriculture would loom larger than some advanced countries (but not NZ) but I don’t think it’s the main problem.
John D said:
What carbon tax? None is in the offing. It might also be good if laws were brought in to seal non-active chimneys. We don’t want portly men in red suits getting stuck in them not to mention what happens to those poor overworked reindeer.
Perhaps you mean that you want to kill off the ETS? That would be an absolute disaster for the regime. Their credibility would be utterly gone. No government initiative without the support of the Liberals would be deemed safe. Effectively, the LNP would have won the election but have none of the responsibility. They’d love that.
Unless the government proposed another polluters’ pay day (cf: the CPRS), it would be a disaster for the Greens and Indies too.
In that scenario I might be forced, reluctantly, to the view that an LNP regime was indeed the lesser evil, since this regime was merely its sockpuppet, and having them rule in their own right might at least force them into the kind of open warfare which would force their demise and consequently a fairly speedy return to power of those committed to something approximating rational policy. It would be horrible and seriously risky but if the ALP behaved this way it would prove that they no longer had any useful contribution to make to public life — that they really were no more than tiresome windbags.
On the contrary, I’ve no doubt that we will see the rapid retirement of the oldest coal-fired assets in favour of gas. The newer coal assets will persist and win a larger share of the market. It’s not the initial price that will count, but the average price over the remaining lifetime of the asset. If that turns out to be closer to $50, that will be decisive. Places like Hazelwood are hanging on merely to see what will happen.
John D @ 12, just a small point. We don’t yet know how wide the coverage will be or whether it can be described as “economy-wide”.
Fran/John D, one of my hopes is that banks will refuse to finance new coal. Westpac in particular has long been active in an industry group looking for action on climate change.
They will all be weighing up the risks very carefully.
Brian @16,
We know it won’t be “economy wide”, as agriculture is specifically excluded. Transport is likely to be out too, at least initially. Energy-intensive export industries are effectively 90% out. Which really just leaves electricity and gas, plus a few bits and pieces.
Economy-wide not!
My thoughts exactly, I&U.
David @5, Australia is more dependant on fossil fuels than any other OECD country
Our population is growing rapidly
We have stronger economic and employment growth than most other OECD countries
Our cities are decentralised and widely spaced resulting in high transport use per capita
Our trade profile means 20% of our GHG emissions are embodied in exports, most notably aluminium and agricultural products
John D@12 and others,
there’s no way any of the proposals on the table can be called economy wide. I reckon SincD is erecting and beating up a straw man to make a bit of smoke and noise.
The Productivity Commission was quite clear on the benefit of a price and the need to have complementary policies. But putting a carbon price into some parts of the economy at present (e.g., ag) would be like setting up a water market during a drought. (As opposed to power, where it should be). I think the ag and biodiversity sector should be allowed to sequester carbon for a return to promote the development of a market sector in that service without the downside for a given period of time.
A colleague just came back from the US and observed that all earlier schemes gave out free permits then ratcheted down the cap. SO2, Montreal and other schemes have worked that way. I know the word “free” gets people exercised when they know the emissions are damaging, but the cap soon fixes that. It’s also less complex than a dutch auction or whatever is being proposed.
““It’s my way or the highway!”
That’s Christine Milne, also inclined to be stubborn at times”
Brian, it looks like you’ve quoted from Milne, but in your link she doesn’t say that. Is that fair? You may have picked up a bad habit from the commercial media.
I don’t know who would be the biggest loser if there’s no agreement, but it could be the ALP. People wouldn’t expect the Greens to compromise too much on their one big reason for existing, and Julia Gillard is only there on the basis of her skill at negotiating deals. So if there’s no deal …..
Roger: I think putting a price on steel is stupid because:
1. The proposed tax is not high enough to drive any real action.
2. The most effective way to reduce steel emissions will probably be to use CSS – which is being developed elsewhere and unlikely to be available for years.
Similar comments could be made for other emissions that are going to be caught up in the net.
When the government sets the price it should be required to give details of what changes the tax will be high enough to drive.
I have consistently argued that the approach used should be case specific and that systems based on artificial price increases should be the last resort, not the preferred option.
Fran: The problem for for gas investors is uncertainty re how long their plants will be viable. Part of this uncertainty comes because above a certain price renewables will be able to start displacing gas. It is anybodies guess what is going to happen to the carbon price over the 10 to 20 yrs a gas fired plant may need to justify the investment.
The best way to drive investment while minimizing price increases is to provide some sales certainty and have the price formula set by competitive tendering.
If you really believe that an emission trading scheme is the way to drive investment in clean electricity why aren’t you out their championing the MRET emission trading scheme that gives much lower power price increases than either an effective carbon tax or CPRS style ETS?
Brian @16: OK. The tax won’t be completely economy wide but it will still affect a greater % of our industries than any other scheme and the tax can be characterized as “exclude by exception” scheme. Which means that there will be a lot of industries left in the scheme who will do almost nothing because the tax is too small to make the effort of doing something worthwhile.
It would be a lot smarter to use an “include by exception” approach. The logical starting point here is to get on with cleaning up electricity and then expand the program to take in emission sources that will yield lower costs per tonne CO2 abatement than cleaning up electricity or some other strategic justification.
Some video of Ross Garnaut’s talk at Melbourne Uni on Thursday:
Millions of Low Carbon Jobs
“They’ll come from everywhere.”
Russell @ 22, I was trying to convey what she was saying, but knew it wasn’t an exact quote. If what I did was unfair, then my bad.
BTW, I can’t imagine there won’t be a deal. The pity is that by the time Australians get to experience that the “toxic new tax” designed “to clean out their pockets” won’t cost them an arm and a leg, people simply won’t be listening to Gillard and her troops any more.
John D asked:
I don’t believe in MRETs as they are too open to abuse. Let’s have the system driven by CO2-intensity outcomes rather than arbitrary technology categories.
Fran: I agree it would be better to run the MRET on a CO2/kWh basis instead of % renewables. What I think is important is that it should remain an offset trading scheme and thus avoid the much higher prices associated with the carbon tax and forms of ETS that, like the CPRS, are defacto taxes. Keep in mind that the target would have to be below 40% of the current figure if the result you wanted was something other than complete replacement of coal fired with CCGT.
I think offset credit trading is the way to go for driving down the average fuel consumption of new cars but something as complex as our power system really needs something more direct.
Russell, further to 27, I’ve changed “my” to “his” in the post, which is now an actual quote of what she said. Works better that way.
If I can explain the discipline I impose on myself, I try to limit items to an average of 100 words. In that space I try to give the gist of the item without the reader having to click on the link. In trying to be economical, I mashed things a bit.
Thanks for bringing it up.
The ski season in NZ is looking pretty fragile at the moment. Most fields are normally open by now but events are having to be cancelled because there is no snow. Sucks.
Yet just across the ditch the Aussie ski-fields are experiencing a bumper opening to the season. Despite what some CCCs (climate change contrarians) may think, this sort of variation is entirely consistent with the existing models of higher oscillations in seasonal averages as the oceans and atmosphere warm up. The point is that global warming changes a whole constellation of previously historically reliable climate patterns.
Speaking of the contrarians, they are lining up for their Sixth Annual Conference, very much with the usual suspects featured, under the banner Restoring the Scientific Method:
So there you have it, we can all relax!
We were discussing the ICCCCC…c…C at work the other day Brian. Looks like it’ll be a pretty pathetic excuse for a conference (two days anyone?). What I love is that Federal and State officials can attend for free! How generous! #sarc
That said, I bet that it gets more air time that IUGG, despite there being a couple of orders of magnitude more scientists at the latter.
Oh yes, and I love the fact that the scientific method now refers only to climate science. Clearly the fact that the scientific method works just fine in a multitude of other fields means that it’s in need of rescuing.
Thank you for clearing that up, Heartland Institute.
Also, I think Willie Soon is the only non-anglo there. And there’s no women – I suppose they’re at home cooking dinner right?
I’m not sure what qualifies Inhofe to know anything about the scientfic method at all! Yet he’s giving an hour and a half long keynote on the topic. Oh, and there’s a ‘warmist vs skeptic’ debate – with four questions! They’re clearly going to be covering a lot of ground here.
It’s all a bit sad really – you almost feel like giving them half a mark for trying. Thanks for the link Brian – that agenda made my morning. 🙂
Brian,
So the contrarians are looking at:
How would economics help in understanding climate? I suppose the syllogism would go:
(1) Government intervention in the economy is always bad and unnecessary
(2) If AGW were real, government intervention would be good and necessary for carbon mitigation
(3) Therefore, AGW cannot be real.
QED
So the science is actually superfluous. Instead we have the “economic method”.
TigTog @ 32,
You couldn’t get more oscillatory than yesterday’s Emu Plains Winter Solstice Eve weather. Early morning perfect spring weather, midday a beautiful still Summer’s day, mid afternoon cold Autumn winds with clouds rolling in. Evening Winter snow in Katoomba. Today windy but full sun.
That is what I call contrary.
I know you were being sarcastic, I & U, but that is exactly how they think: they’re aware, on some level, that dealing with AGW means the end of growth capitalism, so they stick a doily on their collective head and shout, “La, la, la … ” throught the spittle.
We’ve had climate warriors plying their own brand of alternative earth science all week on The Conversation. I must admit, I’m getting quite fond of the Heartland crew because of the LOLs.
Just when you get to the stage of thinking “No-one could make that shit up, let alone believe it”, they come up with something that’s even more unbelievable.
I&U @38,
you’ve got it.
And there’s cause and effect.
This science is the cause of the push for big government and new tax, therefore science is a threat to freedom and the economy; i.e., science is the risk, not climate.
Because only the right economy has less tax and freer markets, science that promotes anything else must be wrong. Therefore, only the right science can give you the right economy. Economics will help inform us what the correct science is.
QED. Perfectly correct and logical.
Roger @42,
It is reminiscent of medieval philosophy, except that “the market” has replaced “God”.
Indeed I & U and like god, the market also has an invisible hand … though again, much like religion, its sockpuppets are very visible.
Actually Fran, I think the ‘invisible hand’ is a real and useful thing – the so-called self-adapting aspect of a complex system. But named by Adam Smith over 150 years before the study of complex systems got underway. Neo-classical economics still hasn’t caught up.
It’s the attribution of a normative purpose to the invisible hand that gets my goat. I like the medieval philosophy comparison (it goes well with goats).
Btw, I think your sock puppets are engaged in some kind of Punch and Judy Show, which is what the current debate has become.
Roger said:
Arguably so. If one avoids reification it’s fair enough, though I do recall the louder rightwing critics of Flannery citing his comments on Gaia in the context of climate change to show that the foundation of the desire to mitigate anthropogenic harm to ecosystem services amounted to the iteration of new forms of Wicca, or some like pantheistic religion.
IIRC, Flannery defended his reference in much the terms you have above in relation to the invisible hand.
It was this parallel that amused me.
Monckton Follies … Grahame Readfern …
What can one say?
Obviously that Chrisotpher Monckton is a chancer on the take.
But, really, is Graham Readfearn any different?
We’ve had a long history of remittance men from the ‘Mother Country’ in Australia. They are a sideshow.
We should form our opinions on the science and act on that and avoid distractions from them.
Looks like the ALP is smuggling in coal seam gas under the solar flagships. http://beyondzeroemissions.org/media/releases/labor%E2%80%99s-solar-flagships-smoke-and-mirrors%E2%80%A6and-coal-seam-gas-110622
Its totally unnecessary: “It is ironic that just as the Spanish unveil the Gemasolar power tower plant near Seville, that runs fifteen hours flat out into the night with molten salt energy storage, providing utility scale baseload solar power to the Spanish grid, the Australian government chooses inferior low efficiency linear Fresnel technology with completely unnecessary gas backup.”
Move on from the fossils, ALP!
Lefty E,
from the linked BZE press release:
That brazenly wrong and stupid statement causes me to doubt the rest of the article, which is a shame since I have a lot of time for BZE. It sounds to me like they are throwing mud at the solar flagship process simply because it is funding a fossil hybrid (which obviously they disagree with). Hybrids seem intuitively sensible to me, as a stepping stone between fully fossil and fully renewable.
I’m not familiar with the competing technologies. If I want to learn more, I certainly won’t be relying on what BZE says.
GregM said:
I’d say so. As far as I can tell, Readfern has not made any outlandish or dissembling claims about climate science or those participating in developing its corpus.
Lefty E @ 49, both Moree and Chinchilla have clouds and rainy days from time to time which molten salt couldn’t cover. So as I&U @ 50 says, hybrids are sensible.
Garnaut criticizes the politics of climate change in this country with words like “bitter” and “rancorous” and, again, says that direct action is “expensive and foolish”.
Also, as yet important detail on performance specs aren’t avaialable for gemasol.
At this stage, it seems its rated capacity is just under 20MW — which makes it effectively a demonstration plant. We don’t know how long each year that it performs at rated capacity or declines to zero, or how many GWhe it will supply in a year so CC and CF are unavailable. We don’t know how much energy it can store in its molten salt “battery” or the RTE for the process. It seems it has cost about Euro8bn per GW to construct, which makes it pretty expensive abatement if CF is only about 20% and CC is about 8%, which seems about par.
oops {available}
Elizabeth Farrelly has an article in the herald today about the carbon tax that, although it’s the usual guff, contains this interesting first paragraph:
That’s interesting, since it suggests that a carbon price is going to have to be really really large to effectively change the behavior of all but the poorest of society.
Now, you could argue that business will make the big changes to reduce costs, but if that were true we’d be living in a world of energy efficient companies. We aren’t. They won’t change unless the cost is significant.
This is my big concern about carbon prices – that we have such a high disposable income that, like Elizabeth Farrelly, most of us will just pay the extra without thinking about it.
(Also, how much more effective would a carbon price have been 5 years ago, before her bill doubled? And what does her experience say about inflation in Aus?)
sg,
Elizabeth Farrelly has not done any maths or research at all. Courtesy of I&U, here is the break down of the 22 cents per unit that we are paying for electricity here in Herald Country.
A summary of the make up of the retail electricity price (figure 3.1 of the report) for 2010/11 (in c/kWh) is as follows:
Wholesale 7.64
Distribution 7.80
Transmission 1.56
Retail Margin 3.42
Energy Efficiency Schemes 0.57
MRET schemes 0.40
Feed in Tariffs 0.38
Other state schemes 0.12
Total 21.89
As YOU will be able to add up the total cost of Renewable Incentives to date amounts to 1.35 cents per unit. The rest is entirely FiP’s for the electricity industry.
(Fn1) FiP = Feed in Profits.
sg @ 56,
It’s getting boring to have to say this again and again and again. Carbon pricing is not (primarily) about changing consumption behaviour, but about changing production behaviour.
Plausibly, a carbon price of $50-$100/tonne could (over time) lead to electricity production being entirely decarbonised. And yet electricity consumption will not change drastically. We can still have our air-conditioners and our big screen TVs.
That’s a good thing isn’t it? We don’t have to go and live in caves.
Bilb, I don’t think Farelly is claiming her bill changed because of carbon pricing.
I&AU, I (think) I understand this, but what incentive do the producers have to change their behaviour if they know they can simply pass on the cost directly without affecting their profits? If they know (as per Farrelly’s complaint) that they can double the price of electricity without anyone changing their behaviour, then won’t they just increase the price by $50/tonne of carbon they produce, without changing their behaviour an iota? Presumably changing their behaviour will involve some cost – if the cost to them is even $1 per tonne, the only reason to incur that cost is if they think the $50/tonne price increase, if passed on to the consumer directly, would lead to a loss to them of greater than $1 per tonne.
sg @59,
It’s called “competition”. Have you really never come across this concept? Or are you assuming that there is no effective competition in electricity generation?
geez, who’s being a grumpy little shit this morning. Any other condescenscion you want to throw in there?
Competition doesn’t work perfectly and in this case it may be costly to lower costs. If every power station knows that they can just pass on the cost, and decarbonizing to reduce the cost requires capital investment, then they may not bother. Do you really think that the putative doubling in Farrelly’s electricity bill is entirely due to unavoidable costs?
I lived in London for a year, and I watched “competition” in action in that fragmenting society, and I can assure you that economists’ dreams of a perfect market don’t always pan out in practice. I’m not saying I disagree with a carbon price (I can’t think of a better alternative and I’m suspicious of direct methods as well) and I agree that competition may work. But if you think competition is always and everywhere effective, you’re being overly optimistic.
One might observe also that competition, in as much as it focuses the minds of humans on improvement needn’t always take the stereotypic conflict-based form between rival teams or individuals.
The typical game player seeks to beat their previous high score, competing with him/herself. Individuals within groups with good internal solidarity may be driven to seek higher status within groups by standing out as responsible for improvements in the output of functioning of groups. Inevitably, that will be a collaborative project in which the group members seek to support the goal of improving the functioning of each sub-group.
Competition in the form one usually encounters these things in commerce is an artefact of the atomisation of human societies and the problems we have collaborating in a maintainable way. One suspects that as the myriad barriers separating every individual human from humanity as a whole are eroded, that production will become more communal.
I’d like to tag along on sg’s comment about the electricity producers.
I and U – about producer behaviour I would also ask what drives the competition when the producers will only have to match the price of the least efficient producer’s price?
If one generator is more adept at dealing with the changing circumstances why not increase your margin rather than try to capture greater market share ? Sometimes growth will create greater risks and will be unattractive to management.
Some may say we can rely on various statutory bodies to ensure there is no collusion about prices but I’m not sure that has a successful history in this land of duopolies.
sg @ 59,
I’m getting into a pattern of flying off the handle at things people have said or written then reading further to discover that i have presumed too much. Farrelly was actually trying to be pro rather than anti, but she was doing it in a strange way. I am writing a detailed response to email to her.
By the way, I&U is correct that the carbon pricing is about influence head of source suppliers or manufacturers in a manner that causes minimal downstream cost. Abbott is trying to make this look as though it works the opposite way.
What I am trying to point out is that there are huge inefficiencies in the way this has all played out. But at the same time ANY ACTION IS BETTER THAN NO ACTION, (that is loud not at you but just becasue it seems to be needed to be shouted for other peoples benefit) and further down the track methods can be improved. So I support the Carbon Pricing method even though I know there are better techniques. Sometime the real solutions can only be appreciated with the knowledge gained from an earlier experience.
What we have here in Australia is a beautiful beach covered with people and no-one swimming because there are a hand full of ratbags running up and down crying “shark”, (that would be the Abbotts and the Monktons). We need to get into the water, get wet, and start swimming.
But on the competition thing, you are right. It is not working as those who proposed it for the electricity industry believed that it would. The same thing applies to water supply. The fact is that government controlled electricity and water supplies were extremely efficient. So much so that the competition model cannot operate at the cost levels that were achieved. Electricity turnover levels have first to be inflated to allow for profit at all levels before competition can take place. That is what is happening now. That is why our electricity has risen from 17 cents per unit to 22 cents and this month on further 25 cents (or whatever it has become). Hawaii’s electricity price is 28 cents per unit because it is mostly generated from oil. We are nearly there beside them using the supposedly cheap coal.
There is only one explanation for all of this and that is that the transition to the competition model for the electricity industry is not in the interests of the public. It was only ever in the interests of todays politicians who for some reason find managing projects in the public interest all too hard.
To put a figure on how effective the NSW electricity system has been at containing costs and delivering an affordably priced product…I remember my father grumpily telling me to “turn that damn radiator (1 bar 1 kilowatt per hour) off, it is costing 10 cents per hour to run” in 1968. In 2007 electricity was 17 cents per hour.
“””But at the same time ANY ACTION IS BETTER THAN NO ACTION, (that is loud not at you but just becasue it seems to be needed to be shouted for other peoples benefit) and further down the track methods can be improved.”””
I wonder where this debate would be now if the Greens had thought that way about Rudds CC policy?
They (Bob Brown) voted for “No Action” too.
@ Brian and I&U – fair enough, I stand corrected – or at least in part – is coal seam gas really our fossil fuel back up of choice?
jumpnmcar, the reason the Greens voted against Rudd’s proposal is because it was still no action, but at greater expense thant he current situation.
sg @61,
I tried to phrase my response in a way that was neither sarcastic nor patronising. Obviously, I failed.
You need to understand that retail electricity supply is a combination of four different services: generation, transmission, distribution and retail. Electricity reform in the 1990s was about making the first and last of these competitive and leaving the middle two as natural monopolies.
Now since all electricity – fossil and renewable – has to pass through the same wires, the monopolies are essentially irrelevant to your question, from an economic perspective. In terms of perception, however, they are very important. Recent electricity prices rises have primarily been driven by increases in the monopoly charges, although there have also been increases in generation prices due to higher world coal prices. It is understandable therefore, when talking about “competition”, to get the response: “if electricity supply is so competitive, how come prices are going up so much?”. I hope the above provides the answer.
BilB, AIUI, is an entrepreneur in renewable generation. Around the world there will be thousands of others like him. They are all waiting for – and working towards – the time when renewables can compete on cost grounds with fossil. Once that time arrives – aided by a carbon price – you can be certain that these guys will be building new generation capacity like buggery. If the conventional generators put up their prices more than necessary, that is just going to speed up the entry of renewables and advance the former’s demise.
It is true that new entrants have to pay for their capital investment, whereas existing generators have obviously already paid for theirs. That will certainly slow down renewable entry but it will not stop it. Not if the carbon price is high enough.
I am not suggesting that competition in generation is perfect. Far from it. But even secure oligopolists are at risk from new entrants with a disruptive new business model, so long as there are no institutional barriers to entry. Look at Aldi taking on Coles/Woolworths for example.
One last moan. You say: “if you think competition is always and everywhere effective, you’re being overly optimistic.” This argument (not just from you) really p*sses me off. I am talking about competition in one sector in one industry, that I happen to be very familiar with. I am saying nothing about competition elsewhere or in general. So less of these puerile arguments from the particular to the general, please.
I hope that answers your questions.
Lefty E,
“is coal seam gas really our fossil fuel back up of choice?”
I am afraid that it is. I know there are some local environmental problems with it, although I’m not familiar with the details. But it has the huge advantage that it has a low carbon intensity (about half that of coal, in terms of electricity production) and is seemingly abundant across NSW and Queensland (Victoria has conventional gas reserves).
Furthermore, it seems to be located inland, where solar intensity is best as well. So they make a perfect match.
Finally, gas-fired generation is highly flexible. So, even where it is not incorporated into hybrids, it is the ideal technology for backing up intermittent renewables.
I&U,
The concept of competition for the electricity generation sector is anything but straight forward. The principle of competition is at base level between suppliers of comparable product ie Honda versus Holden. At the next level there can be competition between technologies such as film versus digital technology. At the next level there can be competition between industries ie mining versus manufacturing or macro farming versus garden farming. At the next level there can be competition between ideologies. There are no doubt a whole stack of other levels in between.
But what we have going on here in the Electricity Industry is a whole mix of these levels of “competition” mushed together in the face of declining resources, and a global need to change technologies.
This is anything but straight forward competition. And I will expand upon that later. I’ve got to work.
BilB,
I never said it was straightforward. The generation spot market is one of the most complicated markets on earth. In what other market is a product simultaneously produced, traded, delivered and consumed?
But I look forward to your thoughts.
Incurious, thank you for the response. I think it boils down to (and I think you summarize) my original point, as stated by you in your response:
I don’t believe all those price rises in the electricity sector represent increased costs; or at least, not an efficient response to increased costs. I suspect that the generators know they can lazily pass on costs, without worrying about losing market share, and like many entrenched industries aren’t interested in sinking extra investment into being more competitive. So until the carbon price pushes up the price of generation sufficiently that new (renewables) generators can actually steal market share from the existing generators, we won’t see a change in their behaviour.
Your comment talks about renewables entrepeneurs being able to build generating capacity as the price goes up. This won’t reduce greenhouse gas emissions; it will increase our electricity supply without increasing greenhouse gas emissions. We need to reduce them, which means that existing generators need to be forced out of the market as renewables enter it or forced to switch to renewables. But they won’t do either if they know they can pass on costs, in a market with growing energy demands. In this case the carbon price may lead to a reduction in emissions per unit of gdp, but it won’t lead to a reduction in emissions. Maybe eventually it will lead to a drop in emissions as the renewables improve in efficiency and the existing generators finally decide its worth their while to invest in a switch to renewables. But this could take a long time.
My concern is that the carbon price won’t be sufficient to force existing generators to change, and that the price at which it is competitive for renewables to enter the market is much, much lower than the price at which existing generators will reduce their emissions. Or, alternatively, that this price will force generators to reduce emissions as renewables enter the market but so slowly that it won’t make any difference.