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Published on June 13th, 2014 | by Giles Parkinson

30

Let’s Wait Until The Rich Get Richer To Cut CO2 Emissions…

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June 13th, 2014 by
 

Originally published on Renew Economy.

brisbane-during-twilight

The conservative Queensland state government has called for action on emissions reductions to be deferred, saying that economic growth should not be impeded, and low emissions technologies should only be deployed “when society is wealthier.”

The government of one of the richest states in one of the world’s wealthiest economies – and with the highest emissions per capita – argues that “action now runs the risk of being expensive yet ineffective and harmful to those in the community least able to afford the additional costs.”

The assessment by Energy Minister McArdle, in his submission to the Renewable Energy Target Review, runs counter to most economic analysis, which shows that early action is important because it will end up being cheaper.

The International Energy Agency, a conservative institution based in Europe, highlighted in a recent report that delays in decarbonising the world’s electricity markets had already lifted the cost of combating climate change by $8 trillion to $44 trillion. But it says these costs can be offset three-fold by reduced fossil fuel costs.

Queensland, however, wants to dig up and extract and sell all its fossil fuels. Premier Campbell Newman has made it his mission to do so, and yesterday we reported on how the state was supporting a proposal to build a new 800MW coal-fired power station in the north, at a cost of $1.8 billion.

The report into that proposal made it clear that the plant would need subsidies from the government to help pay for a transmission line, as well as “protection” from the government against future carbon prices.

But McArdle’s team argues that the RET should be reconfigured so that subsidies to renewables are removed. He takes a leaf out of the book of conservative pin-up boy Bjorn Lomborg, in suggesting that renewables should not be deployed until they are “cost competitive” – which ignores the reality that deployment is the best way to bring down costs such as manufacturing, installation, maintenance and finance.

This is what the submission says:

“In general there is a strong argument that low emissions technologies should not be deployed until they are economically viable in a commercial setting. Society might well benefit more by:

  1. deferring action to reduce emissions so that the economy’s growth is not impeded;
  1. allocating funds now to research and develop low emissions generating technologies which are capable of performing comparably to existing fossil fuelled generating plant; and
  1. in the future when society is wealthier, deploying the new low emissions technologies at times when doing so does not diminish welfare.

“Action now runs the risk of being expensive yet ineffective and harmful to those in in the community least able to afford the additional costs.”

By Queensland’s own admission, it has built hardly any large-scale renewable projects, despite the RET being in place for many years. No wind farms have been built, and McArdle can only point to a $120 million, 38MW cogeneration plant that generates enough electricity for one-third of Mackay.

At the small-scale, however, Queensland has installed 1.1GW of rooftop solar on one in six of the state’s households. This is frustrating the government, because the state-based tariffs were so generous that 84,000 houses now don’t pay a bill, meaning that the state-owned network assets are losing out on revenue.

Queensland argues that renewable generation should only occur in instances where new generation is required, or traditional generators reach the end of their economic lives.

“It should not be brought forward until the wholesale market has clearly signalled a need for it through appropriate price signals set by the balance of supply and demand.”

Such a move would likely defer any renewable projects for a decade, according to the recent demand update from the Australian Market Operator. It is also blatant self-interest: Queensland has had to close down significant amounts of coal and gas capacity in the last 18 months, blaming the impact of solar. It is now trying to sell those assets.

The submission also notes that the cost of the LRET to consumers is $3.95/MWh. Some perspective is needed here. The average household pay $280/MWh for their electricity, not including a fixed charge of more than $300 a year. Rising gas prices and network costs have accounted for the bulk of increases in the latest year.

Photo Credit: Foter / Creative Commons Attribution-ShareAlike 3.0 Unported (CC BY-SA 3.0)

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About the Author

is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia's energy grid with great interest.



  • LookingForward

    “Queensland argues that renewable generation should only occur in instances where new generation is required, or traditional generators reach the end of their economic lives.”

    Isn’t that happening allready in most of the US?
    If they trully think that, then why are they building a new coalplant?

    “McArdle’s team argues that the RET should be reconfigured so that subsidies to renewables are removed.”

    If that’s what needs to happen for fair trade and economic growth, then they probably can live without “The report into that proposal made it clear that the plant would need subsidies from the government to help pay for a transmission line, as well as “protection” from the government against future carbon prices” too for fair trade and economic growth, I mean fair is fair.

  • Shiggity

    Solar PV is already an unstoppable force that transcends wealth, I’m not worried. Building new coal is already obsolete, the only people pushing it are getting directly funded by coal lobbying, but that will only last so long because it simply isn’t profitable anymore.

    The ‘natural gas bridge’ people keep talking about is real, but what most people don’t realize is that we’re already almost across said bridge. Solar PV + battery storage will be viable to most of the country by 2025.

    • LookingForward

      by 2020 is more like it.

  • http://www.energyquicksand.com/ Edward Kerr

    After reading this article I had to go outside and check to see if I’d died and gone into the twilight zone. Are these people for real? Do they really believe this tripe? Seriously, what are they thinking.

    What I found most amusing is that these capitalists now want protection from the same market forces that they have trumpeted in the past as proof that theirs is the best way. Oh wait, slap myself, continue the destruction of the environment, do it with other peoples money, privatize the profits and have an assurance that others will have to mop up any mess (assuming, that is, that there will still be others) when they ultimately fail. Of course, what was I thinking?

    Do they not realize just how arrogant, stupid and insane they are? Did I forget greedy?

    Note to the other commenters here: I’m sorry for flying off the handle but this story hit my mean bone and I just couldn’t contain myself. The time for honestly addressing the climate/fossil fuel issue is past and these morons don’t seem to get that what they want is nothing less than the right to murder people, with impunity, while banking the scrapings from the bottom of the barrel. Sociopathic comes to mind.

    • Ross

      They’re trying to play Australian voters for the fools that they may be if they keep electing them.

    • Bob_Wallace

      “Do they not realize just how arrogant, stupid and insane they are? Did I forget greedy?”

      That word “stupid”. Are you sure you want to include it in your sentence? Seems to me that these people are pretty clever in terms of fleecing the rubes.

      • Randall Mathews

        That type of ‘pretty clever’ is justifiably called stupid in this context.

      • http://www.energyquicksand.com/ Edward Kerr

        Bob,
        I get your point but in my mind doing something that will ultimately be to your and your progeny’s detriment is stupid. The word that I did miss is “criminal”….

      • A Real Libertarian

        Any parasite that sucks its host dry is an evolutionary failure.

        That these morons have human intelligence and still think it’s a good idea proves they’re stupid.

  • Matt

    Talk about two face.
    -Don’t build any RE until we can prove it is needed.
    -Build a new 800MW coal-fired power station in the north (with government backing, subsidies, and “protection”)
    The only community they are worried about harming, is the fossil fuel industry

  • jburt56

    This is a pervasive tactic of the carbon stasis–feigning concern for the poor.

    • Ronald Brakels

      Yep, suggest giving five kilowatt-hours free electricity a day free to low income earners and then watch them either run or call you names. They won’t even tolerate eliminating daily supply charges that hit the poor more than rich.

    • http://zacharyshahan.com/ Zachary Shahan

      Yep, one of the most hideous in my opinion.

  • Ronald Brakels

    The Queensland Government was able to afford to give $110 million to the horse racing industry and is spending something like a billion dollars on a new governmental palace. So yeah, maybe when Queensland can afford a $10 billion dollar palace it will be rich enough to do something to protect the environment that the state’s huge agricultural and tourism industries depend upon and the lives of its people depend on. Until then they will try to ignore that Queenslanders have died in massive floods exacerated by global warming, Queenslanders have died from bushfires made worse by higher temperatures, and Queenslanders have died directly from extreme temperatures.

    I am typing this in Queensland at 6:35 in the morning wearing a T-shirt and shorts. There is no winter this year.

  • http://www.michaeljberndtson.com/ Michael Berndtson

    How much of this is Queensland’s interest in coal seam gas? Apparently, 92 percent of Australia’s reserves sit in Queensland.

    http://www.aplng.com.au/images/wherecsgisproduced_large.png

    Coal seam gas or CSG is shale oil/gas fracking’s redheaded stepchild. It’s nasty. Not as bad, maybe, as in situ retorting or in situ steam thermal of tar sands. CSG potentially mobilizes a lot of volatile organic compounds, including benzene, up and away from the focus seam. From a quick review, it looks like Victoria has put a moratorium on further development.

    • Ronald Brakels

      The coal seam gas is actually not for use by Australians. It’s for export. There’s no way gas at international prices can compete with renewables and existing coal capacity in Australia. But Queensland’s massive gas export industry and massive coal industry makes fossil fuel interests there massively strong. And so, surprise surprise, the Queensland Coalition government seems convinced that fossil fuels are the state’s future rather than, you know, non-productive things like children.

      • http://www.michaeljberndtson.com/ Michael Berndtson

        Interesting. Thanks. I’m not familiar with Australian commodity markets. Traders here in the US are licking their chops to get at that price differential on natural gas. One of or the biggest reason we are pushing LNG facilities in the US. The whole issue of gas for coal is only of interest to traders, if it can push more gas trading. Not climate change or our overall well being on planet earth.

        • Ronald Brakels

          Well, US traders will never get their hands on those high international gas prices. Queensland’s one gigawatt natural gas liquifiers will go online later this year and start meeting demand. Meanwhile every solar panel installed in Japan means less gas they will need to import and an economic slow down of some sort is unavoidable in China without the use of magic. With solar power continuing to fall in price it is simply not plausible that international gas can maintain its current high prices.

  • RobS

    I say build the 1.8 billion dollar coal plant, it’s cost will blowout by 50-100% and we will almost certainly have a price on carbon again by the time it is under construction, it will force Queensland utilities to push up the price of power even faster and accelerate the rate of solar installations. The combination of decreased sales and a massive over budget project will likely bankrupt the utility and the political ideology that led to it.

    • Bob_Wallace

      I’d say require the people who are pushing to build the coal plant build it at their personal financial risk. If they think it such a good idea then let them arrange for private financing with no risk to taxpayers or consumers.

      Bankrupting the utility will simply cost the taxpayers more money.

      • A Real Libertarian

        Bankrupting the utility will simply cost the taxpayers more money.

        But it will send a message to everyone that coal can not compete.

        And the savings from faster elimination of fossil fuels in the aftermath can help with the cost.

        • jeffhre

          Fossil fuel interests will continue to stay on message, claiming that imprudent and out of control growth in renewable sources is pushing electricity rates up more than at any other time in Queensland’s history.

          • A Real Libertarian

            But that can not last.

            A rigid unmoving stance can prevent any bending, but if pressure continues to built, then whatever is standing in the way will break.

    • spec9

      That is an interesting strategy but you know things work . . . their lobbyists will then make the politicians eliminate net-metering and any incentive programs. Or if the go bankrupt, they’ll get politicians to bail them out .. . because jobs or something.

      • RobS

        Either of this things will take the better part of ten years to come to pass, I expect in ten years solar+storage will cost a fraction of what it costs to remain connected to the grid.

      • Ronald Brakels

        Don’t worry spec9, their mission is already accomplished. In two weeks Queensland’s solar feed-in tariff will be zero cents a kilowatt-hour.

        • Calamity_Jean

          “In two weeks Queensland’s solar feed-in tariff will be zero cents a kilowatt-hour. “

          That stinks. You folks will just have to throw out those fool politicians at the next election.

  • JamesWimberley

    The delayist argument has already lost. What economist of note supports it? Newman’s government is offering a golden opportunity to spread knowledge of its falsity.

    • José DeSouza

      Not so fast. The economics profession is still —by and large —populated by economists who simply don′t understand what money really is. At the core of the delayist argument is the false notion —macroeconomically speaking— that savings must precede investment, not the other way around. You and I and a few others may know about it, but not everybody else. Tackling the renewables revolution properly can effectively address some of our most pressing issues, namely making a truce with our surroundings, so to speak, but it also offers an unparalleled opportunity to positively address the sorry state of the financial cul-de-sac the world as a whole is in and the widespread unemployment puzzle. See, for instance: http://www.debtonation.org/wp-content/uploads/2011/04/A_Green_New_Deal_1.pdf

    • http://renewablerevolution.createaforum.com/index.php agelbert

      we signed: Demand Liberty From Fossil Fuels Through 100% Renewable Energy WWII Style Effort

      Mr. Dan Metzger, IL
      Jun 15, 06:09
      # 22
      Let us begin. Let us agree.

      Mr. Errol Isenberg, FL
      Jun 15, 04:58
      # 21
      Most world leaders are encouraging their countries to produce more fossil-fuel based energy, not less. There is technology available now that would allow us, if the technology is scaled up, to produce most, if not all, of our needed energy from renewable sources. DO IT NOW!

      Ms. Sallie Park, VA
      Jun 14, 21:23
      # 20

      Dr. Jatinder Sehgal, AZ
      Jun 14, 21:22
      # 19

      Mr. Bradford Woodbury Sr., IL
      Jun 14, 13:57
      # 18

      Mr. Michael O’Brien, CO
      Jun 14, 10:35
      # 17
      It is our one chance to stop the Global Terminal Extinction Event, if done soon enough.

      Mr. Jesse Dellinger, PA
      Jun 14, 03:32
      # 16
      https://movetoamend.org/ http://freespeechforpeople.org/node/527 http://termlimits.org/HYPERLINK “http://www.care2.com/c2c/people/greenstar.html?targetID=295211183&s=6&a=420529456″

      Mr. John Cook, WA
      Jun 13, 12:17
      # 15
      Although this may lead to furthering Agenda 21 I prefer to face that further down the road than doing nothing now!

      Mr. Jim de Cordova, CA
      Jun 13, 11:09
      # 14

      Mr. Timothy Havel, MA
      Jun 13, 08:29
      # 13

      Ms. Sandra Speicher, CO
      Jun 13, 06:36
      # 12

      Mr. PJ van Staden, South Africa
      Jun 13, 03:44
      # 11

      Mr. David Ferraro, VA
      Jun 13, 02:10
      # 10
      Absolutely necessary for the preservation of humankind. Expect scorched-earth opposition from the fossil fuel lobby.

      Ms. Natasha Salgado, ON
      Jun 13, 01:41
      # 9

      Mr. frank mcclain, CA
      Jun 12, 23:20
      # 8
      I hear Sen Inhofe says the solutions to ‘climate change’ are “too costly”. Never mind that continuing to burn fossil fuels is ‘too stupid”. When we humans start doing something because it is ‘smart’ instead of ‘cheap’, we may have a thriving planet to pass on to our great great grandchildren. As of now, it looks like they’ll get a smoldering wreck. We can prevent this. Today is the day to change course. We can do this . We really can.

      Ms. Mary Ch, ON
      Jun 12, 09:35
      # 7
      Please watch shows “SOS Global Warming” on http://www.suprememastertv.comHYPERLINK “http://www.care2.com/c2c/people/greenstar.html?targetID=338731013&s=6&a=420529456″

      Ms. Stacey Calvert, United Kingdom
      Jun 12, 09:08
      # 6

      Mr. Joseph Wenzel, MN
      Jun 12, 05:29
      # 5

      Ms. Kaileen Reynolds, TX
      Jun 12, 04:00
      # 4

      Mr. Serdar Murat, Austria
      Jun 12, 02:55
      # 3

      Mr. John Forbes, United Kingdom
      Jun 11, 21:42
      # 2

      A. G. Gelbert, VT
      Jun 11, 18:51
      # 1

      Please pass this on; the planet you save may be your own.[img]http://www.pic4ever.com/images/computer3.gif[/img]

      http://www.thepetitionsite.com/420/529/456/demand-liberty-from-fossil-fuels-through-100-renewable-energy-wwii-style-effort/

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