Friday, July 15, 2011


Climate cops coming

HUNDREDS of "carbon cops" will police compliance with the carbon tax and will have the power to inspect premises, take companies to court and impose financial penalties.

Yet the 200 workers employed at the new $256 million Clean Energy Regulator might actually contribute to climate change, like the government's Department of Climate Change and Energy Efficiency.

The government arm responsible for the implementation of the carbon tax yesterday admitted it was not carbon neutral and it was too early to say if tax enforcement would add to the department's pollution output.

A spokesman for the Department of Climate Change said it used green power but its emissions were still 12.5 tonnes a year - about the same as a family home. The figure was an underestimate as it does not include staff plane travel and taxis.

Staff at the Clean Energy Regulator will allocate carbon permits to businesses for the $23 per tonne carbon charge and will also hand out the free permits to big polluting industries scheduled to receive assistance.

The spokesman said the regulator would be responsible for educating companies on administrative arrangements, assessing emissions data to determine liability and operating a registry of emissions.

"The Clean Energy Regulator will be a statutory authority with substantial powers to enforce the carbon pricing mechanism," the spokesman said. He said the regulator would have the power to initiate audits of emissions, inspect premises, impose penalties and initiate court proceedings.

The government's carbon tax documents, released on Sunday, showed companies would face an emissions charge if their "emissions obligations were not met through the surrender of eligible emissions units".

Emissions charges will be $29.90 a tonne next year and $31.40 and $33 in following years.

Carbon permits will be considered financial products and will have a unique identification number.


The real winners of Gillard's carbon price plan

BIG banks, accountants and lawyers are among the big winners to cash in on the carbon plan, as companies wrestle with reporting requirements arising from the tax.

Research by IBIS World shows the demand for accountants will surge by 3.4 per cent in the next year because of the Government’s clean action plan, The Australian reported.

The research shows that demand for accounting and business advisory services will boom over the next five years, as businesses try to adapt their practices to “mitigate the downside - or capitalise on the upside of the new legislation".

Financial services firms are also likely to profit from the overhaul of the tax system announced as part of the carbon plan.

Banks will be involved in trading carbon permits when emissions trading starts in 2015, and will develop new products to help polluters reduce their carbon exposure.

Australian Bankers' Association chief executive Steven Munchenberg said the Government's carbon price was "essentially creating a new market".

"We would therefore expect to see a range of instruments developed to help companies manage their carbon exposure," he said.

Lawyers will also benefit from the boom, with Ibis predicting demand for services to rise by 3.8 per cent.

Big law firms are set to be major winners if energy-intensive companies try to challenge the legislation.


Barking mad - a nation howling at fireflies

Australia's carbon tax

You don’t need to study any numbers to know it doesn’t add up. The statistical chicanery in a patchwork tax, with a complex compo plan, and offsets, subsidies, and a$10 billion renewable energy* Christmas wish list is as complex as a climate model. But this time no one is saying “it’s settled”, and is seriously expecting to get their extra 20 cents a week.

Lost among the bedazzling array of numbers are one pair of figures that put the central dumbness of this plan on display.

Australians will pay about $10 billion* a year in carbon fees, overachieving their European competitors who only paid $2.6 billion over, wait for it, six whole years. On a per capita basis the numbers are stark. While Europeans chip in 96 cents a year, Australian’s will be told to pay $500.

The bottom line — figure this — is that we as a nation have “decided” to voluntarily^ pay somewhere from 2 – 5 times as much for our energy, and there are no cheap “technologies” on the horizon unless someone somewhere discovers them (and they’ve been looking for decades). Julia Gillard tried to compare this to other major economic moves like floating the dollar. But those big moves had selling points known as “benefits”.

Let’s list all the advantages, both of them, from this masochistic macroeconomics move:

* It will reduce global man made human emissions for the next eight years from 64,000 mt to just 63,840 mt (roughly). (I can’t see people opting to pay much for that).

* It will rocket Australia to the top spot on the IPCC’s Miss-Popularity National Rankings.

Yes, we have earned the death-defying Kamikazee-Sovereign-Economy award for 2011. (Competition closed early. There’s no point waiting til Dec 31. ) This will come in handy for some ALP personnel wishing to move onto UN unelected positions after the next election, but otherwise be generally a source of mirth for non-Australians.

The Australian share market took the news of the economic suicide gracefully, losing only $7 billion dollars in the first day. (And that tallies up only the top 25 companies which are going to cop the big carbon-speeding-ticket.)

Julie Novak explains the rise of the Carbonocrats (also known as the Green Police).

Michael Stutchbury, Economics Editor, The Australian, thinks it will be a miracle if the package survives.

Labor’s support falls again in the polls. And while I’ve generously pro rata’d the total revenue estimate to be $10b, Wong guessed $18 b, Pyne guessed $21b and apparently, the number is really $25 billion. Who knew? Not the ALP finance minister eh?.

Don’t forget to keep reminding those Labor Marginal Seats of their new favourite piece of legislation. There are groups forming in Greenway and La Trobe, so let us know if you want to join them, or start a new group elsewhere.

Me, I just wish we were spending $25 billion on medical research instead. What would you rather have? A cure for cancer or second hand windmill made in China?


Carbon tax plan to hit bus, train commuters

COMMUTERS could be hit with public transport fare increases of up to $150 a year when the carbon tax kicks in, confidential state government figures show.

Fears of fare rises came as retail giant David Jones' boss Paul Zahra yesterday blamed consumer concerns about the carbon tax, the high Australian dollar and the federal government's flood levy for a record 12 per cent sales slump.

The federal government claimed the overall cost-of-living impact on prices from the tax would be only 0.7 per cent of CPI.

However the NSW Treasury estimated that the potential fare rises for all modes of public transport in NSW alone - due to increased electricity costs for trains and fuel costs for buses and ferries - could be expected at an average 3.4 per cent.Some fare increases would be expected to be hit from the date of the carbon tax, July 1, 2012 - while others would start in 2013 and 2014.

Commuters travelling longer distances to the city from places such as Blacktown, Penrith, Campbelltown, Gosford and Heathcote would be worst affected.

The Treasury document assumed that the full cost of the carbon tax would be borne by commuters rather than by taxpayers.

Blog with Tony Abbott - carbon tax will hurt families

It is understood that Mr O'Farrell wrote to Prime Minister Julia Gillard last night, asking for a full briefing on carbon tax impacts on state government services - in particular public transport.

Mr O'Farrell said yesterday it was "crazy" that public transport would be hit by the tax when petrol for cars would be exempt: "This will create more pollution and defeat the whole purpose of a carbon tax.

"The federal government is crazy if it thinks this tax is going to reduce carbon emissions when it will lead to higher public transport fares and create an incentive for people to use their cars."

Public transport fares are set by the Independent Pricing and Regulatory Tribunal.

An inquiry into the carbon tax impacts on fares would need to be held before fare rises could be approved.



Buried under the snow the Warmists said wouldn't fall

March 2000:

According to Dr David Viner, a senior research scientist at the climatic research unit (CRU) of the University of East Anglia, within a few years winter snowfall will become “a very rare and exciting event”. “Children just aren’t going to know what snow is,” he said.

May, 2008:

Scientists say Australian skiers should prepare for shorter ski seasons because of global warming… CSIRO climate change expert Dr Penny Whetton says Australia’s mountain snow cover could be reduced by up to 54 per cent by 2020.

July 2011:

THE deepest snow in 21 years has been recorded by Snowy Hydro at Spencer’s Creek. The 158.9cm-deep snow promises plenty of powder this season. The last time there was snow this thick early in July was in 1990.


The price of Greenie dam hatred continues to rise

Desalination plant to keep sucking taxpayer cash

SYDNEY'S desalination plant has asked the pricing regulator to let it have $579,500 a day in "availability charges" when it is shut down because Warragamba Dam levels are high.

The Sydney Desalination Plant, which the O'Farrell government plans to privatise, wants to be paid just $12,900 more each day to be available when it is supplying water. Under the arrangement, it would be paid a "water security" charge of $592,400 a day when operational.

"This is an unusual situation for a substantial infrastructure asset and arises as a result of the high variability of rainfall over Warragamba Dam, which provides about 80 per cent of the water supply for Sydney," the plant has said in a new submission to the regulator.

NSW Finance and Services Minister Greg Pearce has decided that the desalination plant should be able to charge for providing water supply services, irrespective of dam levels.

The availability charge covers the fixed costs of operating the $1.9 billion plant at Kurnell, on Botany Bay, such as insurance, land tax and council rates, and electricity standby costs.

When it is operating, the plant wants to charge $533.30 for every megalitre of water it supplies in 2012-13. This is lower than the current charge of $620/ML but much higher than the price for dam water of $271.10/ML this year.

The availability charge at the moment is $12.7 million per month, which equates to about $418,000 a day. The pricing proposals are revealed in a new submission to the NSW Independent Pricing and Regulatory Tribunal.

The desalination charges for the plant -- which can provide up to 15 per cent of Sydney's water supply -- are being set independently for the first time, with the new charges to take effect from July 1 next year.

The submission also confirms that the energy-guzzling plant is seeking to pass on its green power costs to Sydney Water -- which would then pass them on to consumers in their water bills.

"This will ensure that the cost of providing desalinated water is borne by those who receive the associated water security benefits, and is not subsidised by water consumers outside of Sydney Water's supply zone," the submission says.

"It will also ensure that water customers receive any benefit from the sale of surplus renewable energy certificates in the future."

Because of requirements imposed by the former NSW Labor government, the plant is 100 per cent powered by renewable energy, under a 20-year deal with Infigen.

The costs of renewable energy certificates for the plant are forecast to rise from $18.3m in 2011-12 to $23.8m in 2016-17, while electricity prices will rise $24.2m to $32.5m over this time.

The submission argues that the cost of renewable energy "is not expected to be an ongoing burden" because the contract with Infigen precludes them passing on costs associated with Julia Gillard's carbon pricing scheme.


Rooftop panels penalise poor

THIS week I signed off on a cheque for several thousand dollars (yes, I'm trying to use up my old chequebook before being forced to a paperless bank account) and I felt just a little grubby as a result.

Yet, in answering the greatest moral challenge of our time, I'm supposed to feel a warm inner glow at the thought of helping global greenhouse gas emissions and my grandchildren, Grace, Paddy and Fred.

My cheque wasn't for some grubby purpose; it was the final payment for putting a mini, greenhouse-gas friendly electricity generator on my roof, a series of photovoltaic cells.

In Canberra -- as elsewhere in Australia -- households with PV cells producing solar energy for their own use and for feeding back into the electricity grid get reductions to their electricity bills and even cash dividends.

Some people have seen the opportunity to do much more than offset their own electricity bill and have vast shiny seas of cells on their suburban roofs in expectation of generous income in the years to come.

For myself, the outlay, while sizeable, was more modest than many and was directed towards ameliorating my electricity bills in the years ahead when I become a self-funded retiree.

So why should I feel grubby about such a transaction, such a global-friendly decision and something that is going to save me money?

Well, the truth of it is I wasn't acting to save the planet and it was arguably against the interests of my grandchildren, who have to have heating during Canberra's chill winters.

Like China "acting on climate change", the actions I have taken will contribute to cutting greenhouse gas emissions from coal or gas-fired power stations, but it's not the reason I'm doing it. I'm doing it to save myself money.

There is no doubt that my actions, like China's investment in renewable energy sources -- and yes, the solar panels on my roof were all made in China although the inverter box is German -- is directed at saving money.

My actions, and China's, will be listed in the positive column for fighting climate change and some may say the motivation doesn't matter.

Others will point out that taking self-serving action is not the same as taking steps that cost a lot of money and don't have a positive personal return or economic saving.

But, as with most people and most economies, there is a finite limit, and it's pretty low, as to how much you are willing to spend without getting a financial return or tangible dividend.

For years I had signed up to planet-saving measures that added only a few cents to a bill here or there, but the thought of forking over thousands of dollars in a big lump and not getting a return is daunting to say the least.

In reaction to this natural human response, governments across the world, starting in Europe where Germany is the home of roof-top power generation, have offered incentives to technological developers, manufacturers, installers and households to buy green-friendly technology. These incentives take the form of renewable energy credits and guaranteed returns on renewable energy.

Governments have gone further to legislate MRETs -- mandatory renewable energy targets -- of varying sizes to be reached by various target dates. They were introduced as a measure independent of an emissions trading scheme or carbon tax. Indeed, when Labor was still in opposition and advocating an ETS and the level of the renewable energy target was an issue in contest with the Howard government, then frontbencher Joel Fitzgibbon, who is still the member for the coal-rich seat of Hunter in NSW, made the point that the MRET should be scrapped when an ETS came into force.

The valid reason for this was that artificial or mandatory targets for renewable energy distort the carbon market and the ability of the national energy supply market to deliver an orderly and cost-effective system for power.

This point is of such concern to Australia's energy ministers that they have requested the Australian Energy Market Commission to conduct a review of the RET schemes to assess their influence on power supply and costs.

The AEMC agrees with the government's chief climate change adviser Ross Garnaut that the RET schemes need to be reassessed in light of a carbon price.

In a previously confidential response to Garnaut's recommendations on the electricity industry, the AEMC said: "Careful consideration should be given to the overall impact on energy customers of a carbon price and the other measures that directly or indirectly provide incentives to reduce carbon emissions such as RET.

"The review of these policies should consider whether the existing policies are still required following the introduction of a carbon price and the potential for unintended, but foreseeable, consequences for energy customers from continuing a range of different measures. The overall aim should be to find policy settings that achieve the government's policy objectives as efficiently as possible, including minimising costs to consumers."

The report also noted the RET would have an effect on electricity prices, carbon emissions and the security of the electricity supply. On the latter point there have been other warnings that South Australia's highly successful achievement of a target of 20 per cent renewable energy raises questions about the extent of the sustainable contribution of renewable sources and where those sources can be concentrated in the national grid.

This brings us back to the point of why I don't feel comfortable about making the perfectly acceptable, socially admired and financially advantageous decision to spend several thousand dollars now to save money when I am thrown back on my own resources, which governments have been telling me to anticipate for years.

Because the feed-in tariffs are guaranteed by governments and new governments, such as Liberal Barry O'Farrell's government in NSW, seem incapable of rescinding the deals, then the distortion in the market, recognised by those framing the climate change response and trying to ensure energy security, is permanent.

What's more, I can afford PV cells to offset my electricity bills but, through the years, the little old lady across the street, the university students renting flats around the corner and my grandchildren's parents, none of whom could afford the cells, will be paying higher prices to offset my offset. That's why I feel grubby doing something legitimate, legal, encouraged, green-friendly and financially helpful for me. It distorts the market and is inequitable.


1 comment:

Paul said...

"Financial services firms are also likely to profit from the overhaul of the tax system announced as part of the carbon plan."

Which has been the plan all along if you look at the backers of all the environmental front groups and UN committees charged with fabricating this. This is true the face of global governance (As opposed to global government). Gillard has actually committed treason against the Australian people for the benefit of global banking.