Comments on: GW: carbon tax v trading

By: Terje (say tay-a)

Terje (say tay-a) — Mon, 25 Feb 2008 05:04:03 +0000

I’ve been revisting this topic. Just thought I’d throw about some figures. This is based in part on Johns CIS paper: http://www.cis.org.au/policy_monographs/pm80.pdf

From Johns paper a general carbon tax of $30 per tonne of CO2 applied to Coal and the like from the electricity sector as well as to petrol and the like from the transport sector would raise enough revenue to allow us to abolish the existing fuel tax. According to his paper the net effect would be to reduce petrol prices by around 30 cents per litre.

By my calculation given emissions of around 600 kg of CO2 for each 1.0 MWhr of coal based electricity a $30 per tonne carbon tax would increase the wholesale cost of electricity by about $18 per MWhr (1.8 cents per kWhr). Given that electricity currently retails for about 10 cents per kWhr this is a significant but tolerable increase for domestic consumers. For businesses it would depend on the extent to which electricity was a major input cost.

So a $30 per tonne CO2 tax thus applied would likely cause:-

a) Petrol prices to fall by 30 cents per litre.
b) Electricity prices to rise by 1.8+ cents per kWhr.

In political terms that does not seem like such a tough sell although obviously it creates winners and losers.

Given that it would push the cost of coal based power to $53 per MWhr ($35 + $18) it would make some coal alternatives cost competitive. The following suggests the following prices for alternatives.

http://www.geodynamics.com.au/IRM/content/hfr_hfrexplain_economics.html

Total Electricity Costs (A$/MWh)

Coal 35
Natural Gas 40
Hydro 60
Biomass 60
Nuclear 70 (Not full life cycle costs)
Wind 80
Photovoltaic 150
Geothermal 20-40
HFR Geothermal 40-60 (depending on scale)
Solar Thermal 40-60 #

# Solar Termal figures are not from the website but from some back of an envelope guessing on my part.

By: terje (say tay-a)

terje (say tay-a) — Sat, 12 May 2007 01:09:20 +0000

I think that any serious policy approach to controlling carbon emissions has to look first at elliminating the government subsidies and grants to the fossil fuel sector as well as any special tax consessions that the sector receives.

A tax on coal could be as simple as increasing the royalties that the government demands. This would of course effect exports of coal as well as coal consumed domestically.

By: Leon

Leon — Wed, 09 May 2007 12:22:50 +0000

In an interview with Bill Moyers, Ron Paul mentioned (I imagine from a fairly hardcore libertarian perspective) cutting subsidies to oil companies

By: graemebird

graemebird — Wed, 09 May 2007 06:57:29 +0000

Terminology. Why adopt such propaganda-driven TERMINOLOGY?

Clearly industrial-CO2 is a positive externality and you ought to admit such things when there is just no denying it.

By: graemebird

graemebird — Wed, 09 May 2007 06:55:50 +0000

Well why adopt such ridiculous propaganda-driven technology?

I mean I’m not taken in by it.

But you may well be and would be advised to go for precision.

So lets not hear any more unscientific bullshit about dirty coal. Coal is a clean technology and furthermore its the GREENEST.

Since no other energy-source so powerfully stimulates the natural world.

By: terje (say tay-a)

terje (say tay-a) — Mon, 07 May 2007 12:18:19 +0000

Nasty tricky buggers.

By: John Humphreys

John Humphreys — Mon, 07 May 2007 12:01:11 +0000

Actually Terje, talking about “dirty coal” is a logical consequence of talking about “clean coal”, which is a semantic trick introduced by the coal industries to show that coal is part of future energy even in an anti-co2 world.

The greenies tend to oppose the dichotomy, insisting that there is no such thing as “clean coal”.

By: terje (say tay-a)

terje (say tay-a) — Mon, 07 May 2007 11:48:32 +0000

The term “dirty coal” previously applied to brown coal which has a lot more sulphur and impurity than black coal. Black coal was considered clean because it was almost pure carbon. Ironic isn’t it. Some might regard this rather recent “convention” as being a form of green propaganda. CO2 is the stuff of life and in pure form it is no more dirty than a bucket load of rain. When you next look apon a tree take a moment to reflect on the fact that more than 98% of it’s mass is composed of CO2 and water delivered from the atmosphere. A tiny seed takes in these atmosheric nutrients and quite literally sucks itself into existance. Nobody thinks trees are dirty.

By: John Humphreys

John Humphreys — Mon, 07 May 2007 11:01:34 +0000

Graeme: “What is meant by dirty technology Humphreys?”

I’m referring to carbon-intensive energy production, primarily coal. There is a convention to refer to carbon-intensive coal as “dirty coal” to distinguish it from the idea of “clean coal” energy.

By: Terje (say tay-a)

Terje (say tay-a) — Mon, 07 May 2007 10:58:57 +0000

getting the edge on these sorts of technologies (which will hopefully have a greater chance of happening due to such laws) is going to be worth a lot of bucks.

Yes. Why not cut off your legs so you can get a head start in the prosthesis market.

One way to manage the move is by starting with a super-low tax and slowly ramp it up over time.

Ahh. Like boiling frogs hey.