Oct 19, 2009

Government's climate plan: costly and ineffective

It turns out that treasury modelling indicates that the Rudd governments ETS (in the form of the CPRS) won't actually reduce the emissions of our coal-fired power stations - the largest single contributor to Australia's total emissions:

The bottom-line charge is that while Wong has been relentlessly sounding the alarm about the dramatic action needed now to cut carbon pollution, Treasury modelling buttressing the CPRS shows it will in fact have little or no impact on one of the key offenders -- the coal-fired electricity generation industry -- in our lifetime.
What she (Wong) doesn't tell us is that her CPRS, complex and
impenetrable as it is, does not actually result in the reduction of greenhouse
gas emissions from our coal-fired power stations.

Using graphs taken from Treasury spreadsheets of the CPRS modelling, Denniss argues that when the CPRS comes in there is a slight reduction in the amount of electricity generated from
black coal between 2010 and 2020 and virtually no reduction in brown coal electricity -- the dirtiest form of electricity generation -- over the same period.

After 2020... emissions from black coal-fired power stations are actually forecast to rise slightly before stabilising until about 2033. Brown coal emissions are also stable between 2020 and 2033. It's only after 2033 -- that is, in 24 years -- that emissions from black and brown coal both begin to fall rapidly. Not only that. The decline in electricity generation from black coal is actually driven solely by the introduction of the government's 20per cent renewable energy arget, an entirely different policy instrument from the CPRS. It is the projected increase in the supply of renewable electricity -- unrelated to the introduction of the CPRS -- that will slightly reduce the amount of electricity generated by black coal power stations. The bigger polluting brown coal power stations will be virtually unaffected.
And the reason emissions from black and brown coal-fired power stations plummet in 2033 also has nothing to do with the CPRS... Treasury has simply assumed that in 2033 we will invent clean coal and that, having invented it, it will turn out to be cheap. Further, it assumes that between 2033 and 2043 we can replace or retrofit every coal-fired power station in Australia. Despite the fact that it takes five years to plan and build a normal one, Treasury seems to think we can replace them all in 10 years.

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