Tag Archives: carbon price

Carbon price policy announced today – here’s a summary

A journey of a thousand miles begins with a single step

Let’s be clear, the carbon price policy announced today is not science-based or visionary and won’t achieve that much. However, it can genuinely be described as a small step in the right direction. If Australia is to do its bit towards achieving a safe climate future – a lot more needs to happen. Our hard work campaigning has gotten us this far, but now is not the time to be resting on our laurels.

Written below is not an exhaustive list of what the carbon price policies entail, rather a summary of the most important points as we see them.

 

Summary of policy package

  • $23 a tonne starting price (1 July 2012) rising by 2.5% per annum before an emissions trading scheme starts on 1 July 2015.
  • Compensation through the tax and welfare system means most people will be better off or fully compensated for any increases in costs.
  • Emissions reduction targets of 5% by 2020 and 80% by 2050 on 2000 levels.
  • Stationary energy (electricity generation and gas/oil processing), industrial processes, fugitive emissions and emissions from non-legacy (new) waste are covered by the scheme.
  • Agriculture is not covered, most transport is not covered.
  • $9.2 billion in industry compensation mainly for trade exposed industries, steel, coal and gas – reducing slowly over time.
  • Creation of the Clean Energy Finance Corporation to invest $2 billion a year for five years in “clean” energy – with at least 50% of that money to go to renewable energy. Carbon Capture and Storage (CCS – “clean” coal) is not included as “clean” energy.
  • Creation of an independent Climate Change Authority, which will advise the Government on emissions targets and report annually.

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Is it better than the CPRS?

The Carbon Pollution Reduction Scheme (CPRS) put forward by Kevin Rudd after negotiations with the Malcolm Turnbull-led Coalition in 2008 was worse than nothing. There are a number of key differences with this package that make this package better:

  • For the first three years of the scheme it will be impossible for polluters to buy dodgy overseas offsets rather than pay for their pollution. When the emissions trading scheme starts in 2015 it will limit overseas offsets to 50% of the carbon liability. The CPRS had no limit.
  • Some of the coal “compensation” is conditional on the closure of 2000MW of coal-fired electricity by 2020. This means that it is likely that Hazelwood will be closed within this time (we need to make sure it is sooner rather than later!). The CPRS had no such conditions and only paid coal companies to stay open.
  • The creation of independent bodies for controlling the investment in renewable energy (Clean Energy Finance Corporation and the Australian Renewable Energy Agency) will take the decision making out of the hands of energy ministers, many of whom, like Martin Ferguson currently, have strong links to the fossil fuel and uranium industries and are biased against renewable energy.
  • The creation of independent advisory body the Climate Change Authority to advise on emissions targets and using the Productivity Commission to examine industry compensation will pressure government to improve the scheme over time.
  • Putting aside a minimum of $5 billion over five years (and maximum $10 billion) for investment in renewable energy is a good way to spend the carbon price revenue. The old CPRS had money going only to household and polluter compensation.
  • There are also a whole bunch of small components which improve on the old scheme. For example burning woodchips from native forests can no longer be counted as renewable energy. Also, the Australian Energy Market Operator (AEMO) is being forced to plan for a 100% renewable electricity grid, triggering a shift in thinking within the organisation.

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Where does it fall short?

There is still a very long way to go. Some of the key problems are:

  • The target of 5% emissions reductions by 2020 is pathetically small and well below anything even closely resembling a science-based target (which is closer to 100% by 2020). There is still no vision for a zero emissions economy and a clear pathway for how we will get there.
  • The huge amounts of unjustifiable hand-outs to the big polluters remain. A lot of these handouts will go to shareholders as windfall profits at our expense.
  • Most of the fossil fuel subsidies remain untouched.
  • Large sections of our transport emissions are excluded from this package, meaning there is little incentive to reduce petrol usage.
  • There is no mechanism to stop a transition to gas rather than renewable energy. Allowing our economy to go from being powered by coal to gas is suicidal. A carrot and stick approach to gas and renewable energy, such as banning new gas plants and providing a feed-in tariff for large and medium-scale wind and solar projects is something we need to keep fighting for.

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Final points

While this policy by itself won’t do much, once it has passed parliament and implemented it will represent a significant political victory over the big polluters and the climate change denier faction in the Liberal and National Parties, who have been fighting long and hard against any climate action for around 20 years. It will hopefully be a basis from which to shift the politics further towards prosperity and survival.

Word from some of the negotiators is that that without our doorknocking, emailing, rallying and phone calling, this package would have been a lot worse than it is. And of course without the hung parliament and Adam Bandt being elected in Melbourne, it wouldn’t have happened at all.

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Further information

Government website

Greens website

Crikey coverage

ABC Environment

The Conversation

Yarra Council split on climate stance

On Tuesday night Yarra Council voted four votes to five to reject a motion calling on the Federal Government to implement a large range of measures for achieving a safe climate future. This motion was put to council by Mayor Alison Clarke at the request of Yarra Climate Action Now and was found by a staff member to be consistent with Yarra City Council’s own climate policies.

The proposed motion expressed support for a carbon price as well as the following measures:

  • Offset the financial implications of the carbon price for households, through measures such as rebates for energy efficiency and financial assistance for low-income households, to ensure that they are not further disadvantaged by the effects of taking action on climate change.
  • Adopt a long-term zero-emissions target for the whole Australian economy, and draw up and immediately implement a plan for how to meet this target.
  • Any new power plants constructed should substantially reduce net emissions and assist in the rapid transition of our major baseload power supply from coal to renewables.
  • Invest in a just and rapid transition to less polluting industries for workers and local communities in places such as Victoria’s La Trobe Valley, based on advice that is independent and evidence-based.
  • Invest the carbon tax revenue not required for household and worker/industry compensation in renewable energy generation, including baseload solar thermal.
  • Introduce a gross national feed-in tariff, to pay a guaranteed fair price for all electricity produced by all forms of renewable energy, including baseload solar thermal.
  • Initiate a mass roll-out of energy-efficiency measures, particularly for residential and commercial buildings, in partnership with interested local governments, many of which already have considerable experience and expertise in this area.
  • Shift investment away from roads and into rail freight, walking, cycling and public transport, including urban and regional/rural public transport and high-speed rail between capital cities.
  • End the logging of carbon-dense old growth forests and broad-scale native vegetation clearing, and invest in revegetation projects.
  • Minimise administrative complexity in the carbon price mechanism, and build flexibility into it, so that the price can be adjusted in line with not only inflation but also technological change and updated scientific information about the extent and severity of climate change.

While the Greens and Cr Fristacky voted for the motion, the Labor and Socialist councillors and Cr Smedley voted against it.

YCAN would like to express our extreme disappointment with the councillors that voted against this motion as it represents a clear and comprehensive list of essential policy measures. We aren’t surprised the Labor Party councillors Funder and Barbour voted against it. While the Federal Government is working on implementing a carbon price, it is also funding the new HRL coal-fired power station, and working to expand coal and gas extraction and export. This hypocrisy and continued taxpayer support for the fossil fuel industry means that Labor Party representatives may be constrained in calling for climate action that will make a real difference. When will Labor finally stand up to the big polluters and do the right thing?

We are surprised that Councillors Jolly and Main from the Socialist Party voted against this motion. This is despite Cr Jolly campaigning for a zero emissions economy and the replacement of Hazelwood with renewable energy at the 2010 State Election. YCAN members present at the council meeting reported that the main argument used by the Socialists against the motion was that they didn’t support market-based mechanisms (carbon pricing) and it didn’t call for the re-nationalisation of the electricity sector.

This stance means throwing the baby out with the bathwater. YCAN is also ambivalent about market-based mechanisms, with evidence from Europe showing that they have achieved little in the goal of reducing emissions (although our survey found that 83% of those asked in Nth Fitzroy and Clifton Hill support a price on carbon). However, that is why this motion had a whole range of other demands and policy measures, consistent with YCAN’s own carbon price stance. The climate crisis is bearing down upon us and may require some political compromise for action to occur.

We invite the Yarra Councillors to comment below and explain their stance to YCAN members.

Natural Gas Statement

The Federal Government, with support from the fossil fuel industry, have openly admitted that the price on pollution will lead to coal being replaced with gas, rather than renewable energy – if no further policy initiatives are introduced. Additionally, the Yarra Energy Foundation is exploring gas-fired co-generation and tri-generation as ways to reduce our local area’s emissions.

The statement below clearly shows why shifting from coal to gas, rather than to renewable energy, is suicidal from an economic and environmental standpoint.

 

Contents:

Summary

1. Scientific context

2. What is natural gas?

3. Emissions from gas

4. Other environmental damage from gas

5. Energy security

6. Alternatives to gas

 

Summary

The climate and energy crises that we face demand solutions that fit the scale of the problem. Natural gas is a fossil fuel which produces large amounts of carbon dioxide when burnt to make heat and electricity. Its extraction pollutes land and water and destroys precious farmland.

While gas fired power stations, cogeneration and trigeneration may appear attractive at the moment, there are plenty of zero emissions alternatives available which do not involve locking our society into decades of risky and polluting gas infrastructure.

Gas is not a transitional fuel, it is a dangerous detour.

 

1. Scientific context

Australians are already suffering from the impacts of climate change and fossil fuel dependence. Worsening droughts, heatwaves, bushfires and floods are costing lives, damaging our economy, and increasing the cost of living. The Zero Carbon Australia 2020 Stationary Energy Plan[i] neatly summarises the urgency of the current climate science:

“According to research carried out by NASA and others, current levels of greenhouse gases in the atmosphere are already sufficiently high to carry the climate system past significant tipping points[ii]. They pose an unacceptable risk of dangerous and irreversible changes to the world’s climate, to biodiversity, and therefore to human civilisation. These changes directly affect Australia’s food and water security, and increase the risk of regional instability.

“Using a global carbon budget approach, recent work by the German Advisory Council on Global Change demonstrates that, to have a two-in-three chance of keeping global warming to less than 2°C above pre-industrial temperatures, developed nations with the highest per capita rates of emissions, such as the United States and Australia, would need to decarbonise their economies by 2020[iii]. Atmospheric carbon dioxide must be reduced from the current level of over 390 parts per million (ppm) into the range of 300 to 350 ppm.”

Unfortunately we cannot negotiate with the laws of physics and with natural ecosystems. We need to get to zero emissions and take carbon out of the atmosphere.

2. What is natural gas?

Usually referred to as natural gas, gas is a fossil fuel mainly made up of methane (CH4). Gas has traditionally been a by-product of oil extraction, which has now become a valuable commodity. It is usually extracted from oil and gas wells, as well as less traditional sources such as coal seams.

Natural gas when burned produces carbon dioxide, the main greenhouse gas. When it leaks into the atmosphere (as it often does) as methane, it has a global warming potential 72 times that of carbon dioxide over a 20 year timeframe (that is, one molecule of natural gas causes 72 times the global warming of one molecule of carbon dioxide averaged over a 20 year period).

YCAN is generally supportive of the use of other types of gases that are created within the current carbon cycle, like biogas, as long as they are from truly renewable sources and don’t take up land that would otherwise be used to grow food. Our current understanding is that there is very limited capacity to produce gas in this way and no capacity in the foreseeable future to supply all our current gas needs from renewable sources.

3. Emissions from gas

Gas is most certainly not a zero emissions or renewable energy source.  Those that stand to make a lot of money from gas try to sell it as “clean”, but nothing could be further from the truth. While natural gas-fired power plants are the least carbon intensive out of all fossil fuels (producing about half the emissions of coal), they are still highly emitting. Gas-fired power stations produce about 515kg of CO2 per megawatt hour of energy generated[iv].

However, emissions from gas-fired power stations or cogeneration and trigeneration systems don’t tell the whole story. Before it is burnt to produce heat, natural gas must be extracted, refined and transported. Each step of the way, more emissions are produced and gas leaks into the atmosphere. Very little research has been done into the total life-cycle emissions from natural gas, but a recent study out of Cornell University showed that emissions from shale gas extracted by hydraulic fracturing (fracking) was:

“…greater than that for conventional gas or oil when viewed on any time horizon, but particularly so over 20 years. Compared to coal, the footprint of shale gas is at least 20% greater and perhaps more than twice as great on the 20-year horizon and is comparable when compared over 100 years.” (emphasis added)[v]

Fracking is a particularly dirty way of extracting gas. However, this research also shows that the emissions from conventional gas extraction are no less than coal when the whole life-cycle is examined. It is obvious that gas cannot be called clean, and the claims by the gas industry that it is must be treated as false unless proven otherwise.

4. Other environmental damage from gas

Apart from its emissions, the extraction process for gas is highly damaging to human health and the environment.

Drilling for oil and gas sometimes goes wrong and severe land and water pollution occurs as a result.  Also, coal seam gas extraction has been shown to pollute groundwater and destroy agricultural land[vi]. In Australia the demand for gas is resulting in some of our best farmland being turned into gas fields. As the world faces the increasing challenge of feeding a growing population while the impacts of climate change reduce agricultural production, polluting our groundwater and destroying farmland to obtain gas is pure insanity. Any increase in gas use is contributing to this destruction.

5. Energy security

Using gas as a fuel exposes us to uncertainties as the cost of gas fluctuates in the global marketplace. Australia had previously been shielded from this but as our export infrastructure for natural gas is built, international parity pricing (i.e. paying the same for gas as the global market price) will become the norm.  We are already seeing how our dependence on oil is leaving our economy at the mercy of the fluctuating oil price. Why risk the same thing happening with gas? Renewable energy has no fuel costs.

6. Alternatives to gas

Gas should not be a part of the transition to a zero emissions economy. It is not a transition fuel, it is a detour from the renewable energy future we want and need. Large multinational companies stand to make the most profit from gas-fired power stations. These greedy companies are choosing to develop fossil fuels while trying to drive those developing true renewable energy options out of the market. They have no interest in combatting climate change or energy insecurity, only in making profit.

We don’t want to see investment in gas infrastructure, effectively locking us in to this dangerous and polluting fuel for decades, when there are alternatives available.

At the large scale, alternatives to gas include the well known renewable energy technologies such as solar thermal, wind, solar photovoltaic, hydro and others currently in development like geothermal, wave and tidal power.

Policies like a pollution tax must be accompanied by additional measures that encourage renewable energy development and discourage gas.

At the household scale, gas cooking can be replaced with induction cooktops and gas heating with electric heat pumps (powered with renewable electricity) and solar hot water.

We understand that local councils have a strong attraction to the use of cogeneration and trigeneration, which is currently a cheap way to reduce emissions (compared to coal-fired power) and start generating electricity and heat locally. However, for all the reasons mentioned above, we recommend the following alternatives:

  • Energy efficiency measures;
  • Purchasing greenpower;
  • Installing solar photovoltaic panels and solar hot water;
  • Small-scale hydro[vii], and
  • Directly investing in medium and large scale wind and solar thermal plants

There are potential biofuel sources of gas, for example by processing things like green and food waste. If co-generation and tri-generation are to be considered, then the gas should come from a waste or renewable source.

While most of these measures are currently more expensive than using natural gas, in the medium and long term many will be cheaper.

Now is the time to start investing in a renewable energy future, the time for delay has long passed.

 

YCAN carbon price statement

Australians are already suffering from the impacts of climate change and fossil fuel dependence. Worsening droughts, bushfires and floods are costing lives, damaging our economy, and increasing food prices. Our reliance on oil and gas is exposing us to severe economic shocks as the prices of these fuels increase.

Australia must play its part in rapidly reducing emissions globally, or else these impacts will continue to worsen and more lives will be lost, eventually reaching a point where adaptation will be impossible.

A price on carbon is a good first step (but only a first step) towards a zero emissions economy, provided it is fair and designed appropriately. We congratulate the Labor Party, Greens and independents for committing to a price on carbon and urge them not to capitulate to the bullying and greed of the fossil fuel industry.

A fair and well-designed carbon price mechanism should result in the replacement of fossil fuel infrastructure like Hazelwood Power Station with renewable energy. To that end it must include:

  • No “compensation” for polluting corporations;
  • No right to purchase dodgy offsets here or overseas instead of paying the carbon price;
  • Inclusion of petrol and natural gas;
  • Indexed compensation for low income households so they are better off (on average) under the scheme;
  • All the money left over after low income households are compensated should be invested in renewable energy projects;
  • Indexed annual increases in the carbon price higher than the background inflation; and
  • An initial price of at least $70 per tonne to promote wind energy rather than gas. Solar energy should be promoted through other means (see below).

It is obvious that a price on carbon is nowhere near enough to get us to a prosperous and sustainable economy. Additional measures are urgently needed and should be included as part of this carbon price package. These measures must include:

  • A long-term plan for a zero emissions economy and a roadmap for how to get there;
  • An end to all direct and indirect fossil fuel subsidies;
  • A feed-in tariff for large-scale renewable energy – particularly baseload solar thermal, which is commercially available right now;
  • An end to land clearing and logging of old-growth forests;
  • A ban on new fossil fuel infrastructure, including gas-fired power stations;
  • A transition plan and job guarantees for communities and workers who lose employment and economic activity due to the transition from fossil fuels to renewable energy (renewable energy creates two jobs for every job lost in coal so it won’t be that hard);
  • A mass roll-out of energy efficiency measures, particularly for residential and commercial buildings; and
  • A shift in investment from roads to public transport, including high-speed rail between capital cities.

To send an email to the Multi-Party Climate Change Committee encouraging them to adopt this position click here.

Community Forum: the politics of pollution

What will a price on pollution mean for the community and what else will we need to do to transition to a zero emissions economy?
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Featuring:
Adam Bandt, Federal MP for Melbourne
Cr Alison Clarke, Mayor of the City of Yarra
Richard Denniss, Executive Director of the Australia Institute
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This forum will have a question and answer session after the speakers
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Wednesday 4th May
6.30 – 8pm -Fitzroy Town Hall 201 Napier Street, Fitzroy
Free entry

Climate action vs. climate denial – the battle of the rallies

A climate action rally, organised in a few days, managed to bring together over 8000 people in Melbourne on Saturday 12 March. The rally was organised by GetUp, the Australian Youth Climate Coalition and various other groups in response to the push by climate change deniers, the Liberal Party and various extremist media outlets against action on the climate crisis. YCAN was there.
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There was a rally held at the same time outside Julia Gillard’s office in Werribee. That rally was calling for no action on climate change and managed a far smaller 200 people. That tiny rally was addressed by two Liberal Party Senators.
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While those against action on climate change make very loud noises and have large sections of the media on their side (namely the Australian and Herald Sun newspapers and several commercial radio stations), it seems that their support in the broader community is decidedly weaker than they would like to make out. See below for a short video of the pro-action rally.
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A brief word on the carbon price

By YCAN Convenor Pablo Brait

The Multi-Party Climate Change Committee (MPCCC) made up of Labor, Greens and independents has just released the framework for a carbon price.  There are very few details other than the starting date of 1 July 2012 and the notion that it will be a fixed price (essentially a carbon tax) for the first three to five years before shifting to a cap-and-trade scheme. Agriculture will be excluded but all other sectors are potentially included.
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Predictably the dinosaurs that make up much of the Liberal and National parties together with the usual fossil fuel corporations are launching their scare campaign against action on the climate crisis. It is unfortunate that they continue to deny climate science and lead a charge against action even as the impacts of more frequent and intense weather extremes have been hitting us hard.
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It is important that carbon price debate doesn’t distract us from what we really need to do – that is, reduce emissions in line with what the climate science says is necessary. That means getting to zero emissions and taking carbon out of the atmosphere until it is back to around 300 parts per million.
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A carbon price will not achieve this, although it can help.
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The problem is that the Labor Party and Julia Gillard give the impression that they have no vision for a zero emissions future – rather, they just want to tick the box of climate action, appease the majority of Australians that want “something” to be done so they can move on. This is made obvious by the fact that the Labor Party still supports the expansion of coal exports and the 12 new coal-fired power stations currently planned across Australia.
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Additionally, with policy settings as they currently stand, a carbon price will only achieve a shift from coal to fossil fuel gas – still a highly emitting and non-renewable fuel, with severe climate change and energy security implications. Baseload renewable energy will not be supported by a carbon price unless it is very high (around $200 per tonne), which is not politically feasible or economically desirable.
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What we need is a vision for Australia to reach 100% renewable energy as soon as possible (and the Zero Carbon Australia plan shows it is possible in ten years). No policy will be good enough unless it is incorporated within this framework. To that end what is needed in addition to a carbon price includes:.

  • An end to all direct and indirect fossil fuel subsidies;
  • A feed-in tariff for large-scale renewable energy – particularly baseload solar thermal and wind, which are commercially available right now;
  • An end to land clearing and logging of forests;
  • A ban on new fossil fuel infrastructure;
  • A transition plan for communities and workers who lose employment and economic activity due to the transition from fossil fuels to renewable energy so they can continue to work and prosper in new industries (domestic renewable energy creates two jobs for every job lost in coal so it won’t be that hard).

A carbon price can help as long as it is robust and accompanied by the above initiatives. The MPCCC should design a carbon price that includes:.

  • No “compensation” for polluting corporations;
  • No links to offsets here or overseas;
  • Inclusion of petrol and gas;
  • Adequate compensation for low income households;
  • Indexed increases in the carbon price higher than the background inflation.

Thank goodness (and those that campaigned) we have a hung parliament and the Greens have the balance of power in the Senate. There would be no debate on a carbon price if that had not happened.