Price on carbon

Price on Carbon

 
 

The simplest solution

The most logical way of decrease the production of CO2 is to make it expensive. A tax is cheap to administer and hard to avoid. Calling it a price on Carbon Dioxide emission would better explain its' purpose.

If the money was used to subsidise clean energy, and the subsidies on coal were removed, then everything would change automatically.

There is a tremendous amount of innovation bottled up waiting to go. A price difference would allow unleash the floodgates. We could develop much of the technology covered on this website.

A government's role is to provide a level playing field, sloping it at times to help get the best long term results for society. If the government would get out of the way and stop subsidising coal, then private enterprise can easily fill the gap.

An increase in the cost of coal fired power will allow:

  • CCS, Carbon Capture and Storage, from flue gas
  • Energy storage
  • Changes in industrial processes such as cement, and steel making
  • Collection of CO2 from the atmosphere
  • Electric vehicles
  • CSG operators will use as little CO2 as possible to push out methane because at present they have to buy it, but if CO2 had a carbon price, they would inject as much as possible.   Source
  • Etc....

 

 

YouTube video of Tony Abbott and his confusing positions on a carbon tax.

https://www.youtube.com/watch?feature=player_embedded&v=lJlWyRIflYI#at=46

Carbon price

Despite political claims to the contrary, research from the OECD finds that 29 countries have higher ‘effective’ carbon prices than Australia.

For example the leader of the Coalition declared ‘the rest of the world was not going anywhere near carbon taxes or emission trading schemes.’ This is untrue.

The Climate Institute  February 01, 2013

The core problem for gas-fired power is that even the newest plants, which offer 60 per cent energy efficiency, cannot compete against standard coal-fired plants currently operating at 35 per cent.
According to Reuters research, an ageing coal plant would still be more than four times more profitable than a new gas power plant.

Source

 

Effect of carbon tax on food prices

This is the cost of food as affected by a carbon price of  A$24.16 per tonne.
 

 

 
Carbon tax impact on food prices (carbon price = $24.15tCO2)
Food item and units
kg CO2 per unit
Price before carbon price
Price after carbon price
% increase
Rump steak (1kg)
3.03
$19.00
$19.07
0.38%
Lamb loin chops (1kg)
4.88
$25.00
$25.12
0.47%
Milk (2l)
1.45
$3.00
$3.04
1.17%
Cheese slices (500g)
1.98
$6.00
$6.05
0.80%
Butter (250g) 
0.99
$2.20
$2.22
1.09%
Classic ice cream (2l)
1.96
$6.30
$6.35
0.75%
Bread (700g)
1.04
$3.00
$3.03
0.83%
Mud cake (600g)
2.98
$5.80
$5.87
1.24%
Oranges (1kg)
1.83
$4.00
$4.04
1.11%
Apples (1kg)
1.78
$5.20
$5.24
0.83%
Bananas (1kg)
1.78
$4.00
$4.04
1.08%
Carrots (1kg)
1.08
$1.30
$1.33
2.01%
Tomatoes (1kg)
1.47
$7.00
$7.04
0.51%
Broccoli (1kg)
1.11
$5.00
$5.03
0.54%
Pasta (500g)
0.63
$1.60
$1.62
0.96%
Breakfast cereal wheat based (750g)
2.41
$3.80
$3.86
1.53%
Eggs free range (700g)
0.67
$5.30
$5.32
0.31%
Chocolate block (200g)
1.38
$3.90
$3.93
0.85%
Beer full strength public bar (285ml)
0.64
$3.85
$3.87
0.40%
Cola (1.25l)
0.80
$1.45
$1.47
1.33%
Fruit juice (2l)
1.84
$4.40
$4.44
1.01%

Source: Tim Grant – Life Cycle Strategies for emissions data.

1► SBS World News, 13 July 2011; Factbox: Carbon taxes around the world
2 ►From: PricewaterhouseCoopers, 2011,The Australian Government’s Climate Change Plan: What should business consider?
 

Investment in power stations - World

Year Renewable Fossil
2004 $52 billion $250 billion
2008 $155 billion $140 billion
2010 $211 billion $90 billion
2011 $260 billion $40 billion

 

Investment in power generation - Australia

Aust Wind Solar PV Gas Coal
2011 41% 6% 36% 17%
 

Carbon tax revenue

This table  provides estimates of the total revenue and the total compensation/assistance associated with the introduction of the carbon pricing package.

Yes, the scheme has the potential to raise significant revenue of $27 billion. But you need to remember the government has already given the coal power stations a billion dollars in compensation before the scheme has even started. Then they’ll give a further $2.054 billion in free permits to coal power stations, plus $9.2 billion free permits to trade exposed industry. This leaves them with almost $15 billion in revenue that they’ll actually get their hands on.

Then the government will provide some considerable cash assistance to coal mines and steel mills, give small business a tax write-off and offer some further support, mainly to manufacturing, to help reduce the impact of the carbon price. This leaves the government with almost $13 billion. This amount completely disappears through tax cuts, pension increases etc. in compensation for households, leaving the government with a net deficit of nearly $2 billion.  

Tristan Edis  Climate Spectator

Source: Clean energy future - Aust gov.