Where are the Asia Pacific Leaders in Emission Reductions?

A carbon price would not force any big change
in the largest source of greenhouse gases – the electricity generation sector -
until after 2020, expert modelling shows. Most change will be due to the
existing 20% renewable energy target, with the carbon price slicing a further
11% from power sector emissions. Meanwhile, critics of the carbon price mechanism
– those who say Australia is taking action before other economies and therefore
exposing businesses to competitive disadvantage – are clearly mistaken, as
shown in a Carbon Ratings report by Connection Research.

Media reports in June – before the Government
announced its carbon price mechanism – paid little attention to a report on Carbon
Ratings for the top 100 companies listed on the Australian Stock Exchange
(ASX). This report in the Sydney Morning Herald also failed to mention that Asia
Pacific major trading partners were actually also doing much more than
Australia to reduce emissions:

A $20 CARBON tax would have shaved just 2.3
per cent from the net profits of Australia’s top 100 companies last year, a
report has found.

BHP, Rio, Qantas, Bluescope Steel and
Wesfarmers would face the biggest liabilities, it said.

The tax hit would have been 5 per cent in
2009, when profits were cut by the global financial crisis, and would have
averaged 2.95 per cent over the past four years, the report by Connection
Research for major Australian investors found.

Its chief executive, William Ehmcke, said the
report showed ”most ASX 100 companies would be able to comfortably absorb the
cost of the tax, even if they were not eligible for free permits”.

With many high-emitting electricity
generators not among the 100 listed companies, they account for 24 per cent of
Australian emissions – and of that the mining giants Rio Tinto and BHP Billiton
emit about one third.

Also in the top emitters are Bluescope Steel
and OneSteel, likely to gain extra assistance in the final carbon package.

Reported in June in the Sydney Morning Herald
by Lenore Taylor

Critics of the Carbon Price Mechanism say
Australia is taking action before other economies and therefore is exposing
businesses to competitive disadvantage. Such claims are not supported by facts,
especially for carbon reduction targets, as shown by a comparison with Australia’s
major trading partners in the Asia Pacific region.

The report shows a map which sets out the
commitments made by Australia’s major trading partners – New Zealand, China,
India, South Korea and Japan – which have all made much higher commitments to
reduce greenhouse gas emissions than Australia.

See the full Carbon Rating report by
Connection Research at www.carbonratings.com.au

A decade until carbon tax pays off

Another report by Lenore Taylor on the carbon
price, this time in in Farm Weekly (5 June 2011):

A carbon price would not force any big change
in the largest source of greenhouse gases – the electricity generation sector -
until after 2020, expert modelling shows.

Until 2020 most change in electricity
generation would be due to the existing 20 per cent renewable energy target,
with the carbon price slicing a further 11 per cent from power sector emissions
through a small shift away from brown coal-fired power and reduced consumer
demand.

But the modelling, done for the federal
Treasury by MMA and ROAM Consulting and released yesterday, did not include the
government’s announced policy to pay for the early retirement of one or two
brown-coal generators, which could lead to much bigger emissions cuts in the
sector.

And it does show significant cuts to
electricity emissions between 2020 and 2050, as the carbon price rises and
clean coal, gas and geothermal power become the dominant sources of Australia’s
power.

By 2050, electricity generation accounts for
almost half of total emissions reductions.

Both modellers found that some regions
producing coal-fired power, particularly the Latrobe Valley and Gippsland in
Victoria, would not shrink economically as power production changed, because
they were well positioned to shift to the new sources of generation.

NSW, hardest hit by the carbon price with job
losses and reduced economic output according to separate modelling conducted
for the state government, is shown in the federal government modelling to
steadily increase its generation capacity.

According to the ROAM results, the state’s
generation capacity would double by 2050, with wind, new coal generation with
carbon capture and storage, and gas-fired power gradually taking over from the
black-coal plants.

Regarding Latrobe Valley and Gippsland, the
MMA analysis said, ”the level of generation with brown coal falls with a
carbon pricing regime. However … [the] region has close proximity to a major
natural gas resource and parts of eastern Victoria have access to good wind,
biomass and potentially geothermal resources.

”This leads to increased investment in
generation exploiting these resources, particularly natural gas resources. The
exploitation of these resources under carbon pricing means that the overall
level of electricity generation may not fall.”

And ROAM Consulting predicted electricity
generation in the Latrobe Valley might increase, as old brown-coal plants close
but gas, renewable and new carbon capture and storage plants are built.

Just like the Treasury modelling it informed,
both MMA and ROAM base their calculations on a $20 carbon price, not the $23
price the multi-party climate change committee eventually agreed upon.

Another model by the CSIRO, of what would
happen to road transport emissions, modelled a very different policy to the one
eventually announced.

According to the government procurement
system AusTender, MMA was paid $32,907 for its work and ROAM $145,200.

Both models showed a higher carbon price
would have driven a much faster transformation of the electricity sector.

The Coalition has attacked the assumptions
used in the Treasury modelling, which found household electricity prices would
rise 10 per cent owing to the carbon price, and has called for it to be scrapped
and redone.

However, the Climate Change Minister, Greg
Combet, maintained it was ”detailed and rigorous”.

Source: www.fw.farmonline.com.au