Now that they have assured themselves of a Biden victory, the forces profiting from Australian deindustrialisation – the woke and subsidy seekers – are rampant. The AFR has long benefitted from its renewable energy clients. Today it featured Garnauteconomics in urging we impose further burdens on the economy by intensifying the assault on modern energy.
Net zero emissions is the modern clarion call. Oblivious to this requiring a carbon tax of $190 per MWh tax according to the IEA estimate or $650 per MWh estimated in a NZ government analysis, Garnaut urges us to push ahead with new impositions, saying the
big risk to Australia is that it will be left isolated from its developed country trading partners and strategic allies by its historical reluctance to deal with the threat from climate change. Achieving zero net emissions not only in the US but in the world is an important Biden foreign policy goal.
As the editorial in today’s Australian rather apologetic points out, Australia already goes much further in interposing renewable requirements between the energy customer and low cost supplies. We already spend $13 billion a year in direct taxes and their regulatory equivalence in order to kill off the economy that has delivered our present living standards. Adding new taxes to achieve net zero emissions would increase wholesale electricity prices fourfold (on the IEA estimated tax cost) or 10 fold (based on that of NZ the analyses).
Garnaut’s eponymous report a dozen years ago promoted the dire results of global warming (which we should have been experiencing now) and kookie ways of avoiding it, like replacing sheep and cattle with kangaroos. He also projected that “without mitigation, the best estimate for the Murray-Darling Basin (p.258)is that by mid-century it would lose half of its annual irrigated agricultural output” – the system has seen no reduction in precipitation or water supply.
He can however be credited in realising that the measures he proposed would mean a doubling and trebling of electricity prices (Fig 20.14), something about which most alarmists and subsidy-seekers are in denial. His estimates a dozen years ago of the costs and tax equivalent rates needed to get to what we now call net zero emissions were however considerably underestimated by him arbitrarily setting a breakthrough in technology to solve the problem. The prime author of the Garnaut report, Steven Kennedy, now heads the Commonwealth Treasury so we are assured of policy continuity!
The Garnaut report saw a relatively frictionless transition to the low carbon economy with few costs involved. It is now clear this was hopelessly optimistic. Using the data compiled by Mike O’Ceirin, replacing coal and gas by wind and batteries would be unfeasible – in theory, simply to keep the lights on, on the basis of replacing the NSW Bayswater plant of 2765 MW requires:
- 2,700 3 MW turbines at a cost of $32 billion over 50 years.
- 250 GW hours of battery storage at $210 billion, costing, based on Hornsdale’s capacity of 192 megawatt hours at a cost of $161 million.
This would infer a nationwide cost of replacing Australia’s 40,000 MW of coal and gas at $2792 billion ($193B*(40,000/2765)) which is considerably above the nation’s GDP. It would also need tens of billions in new transmission expenditure, while also leaving us decidedly poorer because electricity prices alone would by at least treble those of today and the nation’s industrial base would have been pummelled by the energy cost imposition governments would have imposed on us.
The Biden victory and Australian domestic control of the issue reverting to State Governments that are even greater renewable Pollyannas than the Commonwealth means many more backward steps in energy prices and industrial recovery.