Moving to a world carbon price … or not

Bill Leak’s cartoon in The Aus today is a ripper, with own Jools trying to flog Austalian CO2 at $23 a tonne, but with no takers, while the Chinese trader is offering cans at just $1.55, and a long queue of customers.  And Bob Brown’s suggestion to Jools – what about rising the price?

And now comes the analysis of Deutsche Bank in relation to European carbon prices:

The analysis on European Emissions credits gives a forecast SURPLUS of 566Mt from now to 2020 and prices remaining near flat at € 10/t for the medium term.

So that would be about $A12 to $A13 per tonne, depending on how low the Euro goes.

And note that the proposed Chinese carbon tax is narrow and will be applied to non-CO2 emissions in the first instance.

(It is interesting that much of the commentary is interpreting the Chinese announcement as an attempt on their part to sucker in other countries so they can continue to flog green-related products, subsidised by the taxpayers of these countries.  But it hard to see the US, Canada, India, etc. falling for this trick.)

There is now little doubt that Australia will be leading the world – which for a carbon intensive economy, makes no sense at all.

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59 Responses to Moving to a world carbon price … or not

  1. Lloyd

    Well, it could have been worse. We could have had an ETS by now. Trust Labor, when faced with a Morton’s fork of either an ETS or a carbon tax to try to find a way to implement them both instead of taking the sanest option which is to do nothing.

  2. Winston Smith

    The Leak cartoon:
    Snork snork snork, guffaw…

  3. Jack Lee

    way to kill a cartoon judith. humour bypass still operational then. next time a link will suffice…

  4. val majkus

    I was checking out the NZCSC site today and can recommend this article and its links
    http://nzclimatescience.net/index.php?option=com_content&task=view&id=811&Itemid=1

    bit of cut and paste
    If ‘sovereign debt’ is now acceptable as economic jargon popularised by the global financial meltdown, let me have a crack at inventing a new term, ‘sovereign eco-cide” as descriptive of how nations can inflict on themselves economic suicide by means of carbon taxes, emissions trading schemes, cap-and-trade madness , etc, caused by the myth that human and animal emissions of carbon dioxide can cause ‘dangerous global warming’. For what led to this invention, see three links below – Terry Dunleavy, New Zealand Climate Science Coalition.

    sovereign eco cide describes well what the Aust Govt are trying to do

    and as for the $10B green slush fund I love this comment at http://conservativehome.blogs.com/platform/2012/01/david-merlin-jones-of-civitas_uk-the-eu-should-scrap-the-emissions-trading-system-if-it-cares-about-.html

    by Engineer (remember this is a UK site)

    Worth stating again, for the benefit of new bloggers, that renewable energy is costly, inefficient, intermittent, difficult to distribute and virtually impossible to control; that it requires conventional gas-turbine back-up which costs and pollutes on stand-by. That it is marketed by a bunch of liars who are defrauding us all through subsidies. Otherwise it is fine as a provider of perhaps 5% of our energy needs.

  5. johno

    ‘And note that the proposed Chinese carbon tax is narrow and will be applied to non-CO2 emissions in the first instance’

    Judith, could you expand on this point. how can you have a carbon (di oxide (?)) tax that is applied to non-CO2 emissions?

    Does this mean it is essentially a revenue raising tax rather than a CO2 emmissions reductions tax?

  6. Lloyd

    Non CO2 emissions would most likely be methane emissions. The idea is to tax Greenhouse Gases of which CO2 is the most notorious.

  7. Rafe

    The most notorious? Quite likely the most harmless and useful.

  8. Lazlo

    The Chinese are targetting real pollutants initially, such as sulphur dioxide and nitrogen oxide. Along with other particulates, these are what cause the smogs now so common in China.

    They are trying to tackle actual pollution, not colourless, odourless and harmless CO2.

  9. C.L.

    Carbon dioxide is “notorious”?

    Like Carl Williams?

  10. val majkus

    http://www.theaustralian.com.au/national-affairs/china-to-tax-carbon-by-2015/story-fn59niix-1226238633181
    reports pollutants such as sulfur dioxide, COD (chemical oxygen demand) and nitrogen oxide would be the first to incur tax and, as conditions matured, other emissions would be included.

  11. PSC

    depending on how low the Euro goes

    One thing that drives me batty is the lack of recognition that the fundamental issue with a carbon tax and renewables is the currency.

    When you actually try to model anything you very quickly get to the point where you can throw away pretty much everything other than currency in your model.

    And this is now my filter for putatively serious discussions about carbon taxes or renewables – is at least 30% of the article talking about the currency impacts.

    Because if the $A doubles in value in the next ten years (as it did in the last ten), $23 is very high. If it reverses and halves, $23 is quite low.

    Similarly the big difference between renewables and traditional energy is the proportion of domestic expenditure. Renewables are essentially all imported. We swap a ship full of iron ore for a ship full of windmills and solar panels, the installation cost is trivial. So the biggest driver of the economics of wind/solar is … the currency – e.g. how many windmills can we swap for a shipload of iron ore. If there’s a lot of demand for iron ore (as an example Aussie export), then wind (which effectively uses cheap labor offshore) is very efficient. If there’s no demand for Australian exports, then coal (for which the big cost is domestic labor) is very efficient.

  12. Viva

    If the Australian editorialises one more time that it supports a price on carbon as the most economic alternative (with all sorts of hedging provisos about the need for the rest of the world to act as well) – I’ll ….(fill in blank).

  13. Roy Morgan on underutilisation rates by voter affiliation:

    “Unemployment & underemployment combined is 14.9% for ALP voters; 9.5% for Liberal voters; 17.5% for National voters; 18.2% for Greens voters; 19.5% for Independent/ Other voters and 19.4% for those that say ‘can’t say’”.

    I suspect paid employment isn’t really a priority for Green voters and most of this is a lifestyle choice, in contrast to National voters living in struggling small towns and regional centres.

    An industry and job killing carbon tax isn’t an issue if you don’t plan on having a stake in the labour market.

  14. johno

    Thanks for the link, val.

    When you read the whole story, it is obvious that this is NOT a carbon dioxide tax, it is a pollution/particles tax which has very little to do with ‘tackling climate change’.

    Typical warmerist media like The Oz are all to ready to spin in favour of the government and the Greens.

    Greg Hunt was the only one to hint at this con.

  15. JC

    PSC

    But you’re forgetting one thing. For the currency to have an impact it means that people would be able to purchase credits overseas, but you can’t as far as I understand it under this regime, so any movement in the Australian dollar won’t have any material impact.

  16. Lloyd

    @Rafe. Agreed, however I meant notorious to refer to the fact that people fixate on CO2 instead of methane or water vapour as GHGs. Possibly a poor word choice on my part.

  17. val majkus

    Viva, totally agree and I’ve never forgiven it for editoralising before the Rudd election for a vote for Rudd
    still it has some good conservative writers like Judith and Sinc and others
    unlike the Age and SMH who only have Costello (might be others but I don’t read them)
    so for news I go to the Australian and I’ll probably subscribe to the digital version but I’m not going to follow their editorial advice on the virtues of the carbon tax or another labor Govt – I’m old enough to make up my own mind thanks
    I’m thankful that we still have the conservative blogs like the Cats, Blair and Bolt and for a committed sceptic like me the Australian science blogs like Warwick Hughes and Jo Nova
    (and other overseas blogs I frequent but just keeping it local for the purpose of this post)

  18. Elizabeth (Lizzie) B.

    Just change that ‘going upmarket’ sign to going up a certain creek without a paddle. I’m sure that’s what Bill Leak really means anyway.

    And lay off Judith, Jack Lee, you sententious twit.

  19. No Worries

    17.5% for National voters

    Yep, must have been in the towns, if they’d tried to interview farming families, they would have found everyone was too darn busy to answer.

  20. No Worries

    Yeah Lizzie, grumpy Jack has a fling at Judith for being humourless. Oh the irony.

  21. blogstrop

    Whenever I see that drop-kick Kudelka (or Moir, or any other no-talent dauber) do Abbott in budgie smugglers I know the organisation paying for the product has been dudded, and we as the consumer are taken for fools.
    Leak is one of the best cartoonists ever, combining the artistic ability to depict a scene, understanding of the situations in play, and an accomplished wit aimed at anyone in the Political game.

  22. JB Goode

    Elizabeth (Lizzie) B.
    ‘you sententious twit’
    What does ‘sententious’ mean?
    Keep it simple lizzie, just call him a stupid twat then we all know what you mean.

  23. JC

    “And Bob Brown’s suggestion to Jools – what about rising the price?”

    hahhahahhahaha one of the best cartoons of all time.

    Ya know, Leak’s cartoon implies a little sarc. However I wouldn’t be at all shocked if those mutton heads would arrive at these conclusions in their party meets.

  24. PSC

    JC – nope.

    Up to 50% of the permits can be imported after they become tradable in 2015 up to 2020, after which the importable percentage varies and is set by the regulatory body.

  25. JC

    Okay

    hey PSC, you’re analyst right? What multiple should a baseload power plant sell for that produced 100% green energy?

    would you stick a 12 multiple of that?

  26. JC

    Failing that , how would you derive an implied multiple?

  27. blogstrop

    A baseload powerplant that is 100% green energy? I Think we’re into the the realms of fantasy here.

  28. blogstrop

    Italics off, sorry!

  29. Gab

    “I Think we’re into the the realms of fantasy here.”

    Look at this way – which is how Brown and Gillard view it: not everyone has to have electricity. Hey Presto! 100% baseload green energy.

  30. Myrrdin Seren

    Gab

    Well spotted in the Iron Alliance rhetoric of 100% renewable electricity.

    It may be 100% birdchoppers, sunbeams and the rest.

    But it won’t be remotely like the availability, reliability, cost and convenience that keeps modern society ticking from conventional, dense energy sources.

  31. ar

    Carbon dioxide is “notorious”?

    Like Carl Williams?

    The pudgster was also infamous.

    Eg, “CO2, notorious for being exploited by scaremongers, was shown to be harmless to life and essential to healthy plant growth.”

  32. bruce

    Diamonds are carbon.

    Can I buy diamonds at $23 a tonne?

    If not, is the govt guilty of falsely advertising a ‘carbon price’?

  33. Frank Roberts

    Maybe I am different but I see leaks cartoon as an accountant an economist
    – the question why CO2 is the target is that it is measurable and there is a lot of it. So it can be taxed. Why taxed??? because the socialists in the world want to redistribute income. Fine but it will only work if the whole world does it, Copenhagen killed that, The last conference in South Africa ( the butt of the cartoon) just managed to hold on to the dream with the resolution of nothing but a communique that pretends something is happening to keep the dream alive.

    The biggest hoax ever, even bigger that Y2K

  34. JC

    JC – nope.

    Up to 50% of the permits can be imported after they become tradable in 2015 up to 2020, after which the importable percentage varies and is set by the regulatory body.

    Well that may go against their objective of meeting the target then and therefore it would have to be the overseas permits that would have to go.

    They say we have to reach 5% baseline by 2020 with 20% renewables. If the target looks like not being met they will have to squeeze harder and they won’t be able to if people are buying cheap credits overseas. Theoretically it could get much cheaper after 2015 and the target is shot to pieces.

    I’m not sure if they can allow credits to be purchased overseas unless there is no danger to the target.

  35. Oh come on

    Damn. I used /em – let’s try /i

    ok now?

  36. Elizabeth (Lizzie) B.

    sententious – Merriam-Webster Online
    Nowadays, “sententious” is usually uncomplimentary, implying banality, oversimplification, and excessive moralizing.

    Also means self-righteous.

    JB Goode – hope this clears things up for you.

    ‘Stupid twat’, as you suggest, will do too.

  37. Lazlo

    \item \textit{Bollocks} that should do it..

  38. Gab

    Did you break the thread, Lazlo?

  39. Lazlo

    Not guilty Gab! It was someone else, your honour..

  40. Lazlo

    Nos da was a nice touch..

  41. Lazlo

    Unless you are an Anglo-Saxon, or Norman -Longshanks Forever!

  42. Lazlo

    More of a William Wallace sort of person then..

  43. Gab

    lol, no, Lazlo. Whenever i travelled a foreign-speaking country, I always made it a point to learn a few of the basic phrases. You know, stuff like, hello, goodbye, goodnight, can I have two beers, where can I buy aspirin, please get me strong black coffee urgently etc. So I was interested to find out the Welsh word for good night.

  44. Lazlo

    I know, just having you on. I must go, but look up the Monty Python dirty Hungarian phrase book: ‘my nipples are exploding with delight’

    Oyasuminasai

  45. Frank Roberts

    pity debate got into stupidity

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