Upload
transitionkenmore
View
222
Download
0
Embed Size (px)
Citation preview
8/4/2019 Carbon Price Package
1/35
The Carbon Price Package
Mike Clark
TTKD August 2011
8/4/2019 Carbon Price Package
2/35
The warming world
Source: NASA GISS
Temperature trend 1970-2010
8/4/2019 Carbon Price Package
3/35
Fingerprints of human-caused
climate change
Source: skepticalscience.com
8/4/2019 Carbon Price Package
4/35
Why act on climate change?
Picture: Skeptical Science.com Source: Doran 2009, Anderegg 2010
8/4/2019 Carbon Price Package
5/35
*What are you sinking about?
Cartoon adapted from Jip Lenstra by Bart Verheggen (http://ourchangingclimate.wordpress.com/
)
and then again by me.
8/4/2019 Carbon Price Package
6/35
Tackling climate change is in
Australias best interest Australia risks being hit hard by climate change impacts. It is in our interest to play our part in global action to
keep warming to under 2 degrees.
Being a laggard doesnt encourage action from othercountries, it encourages others to be laggards (Garnaut).
Oz is responsible for 1.5% of the world carbon pollutionand is one of the worlds top 20 emitters.
Countries with similar and smaller levels of pollution toOz are responsible for ~40% of the worlds pollution,without action from these countries we cant stoptemperature rises.
8/4/2019 Carbon Price Package
7/35
Analysing climate action
Affordable (Will it be cost effective?) Sensible (Can we manage it?) Innovative (Will it spur innovation and
transformation to a low carbon economy?)
Effective (Will it work?)
8/4/2019 Carbon Price Package
8/35
Guts of the scheme
1. Carbon price2. Household and business compensation3. Renewable electricity4. Supplementary measures (brown coal
buy out, carbon farming etc)
5. Independent governance
8/4/2019 Carbon Price Package
9/35
The carbon price
Carbon pricing means polluters pay to pollute Polluters now have a financial incentive to
reduce pollution (no pollute = no cost= profit)
Carbon pricing is the cheapest way to reduceemissions (Source: Productivity commission, (2011); Garnaut (2011))
Reduce pollution No action
Pay price =Lower profitorGoods cost
more
Dont pay =Higher profitorGoods cost
less
8/4/2019 Carbon Price Package
10/35
How the carbon price will work
Paid by ~500 biggest polluters Starts at $23 ton in 2012 Fixed price, by rises 5% yearly for 3 years
the carbon tax
Moves to floating price in 2015, where totalemissions are capped and decrease yearly the ETS
8/4/2019 Carbon Price Package
11/35
Transport and fuels
Household cars and business light vehicles donot pay a carbon price
Farm, fishing and forestry vehicles also dont payfor off-road use
Domestic aviation, shipping etc and non-transport use of fuels do pay
Charged through an increase in fuel excise or adecrease in fuel subsidies equivalent to carbonprice (I think ~6c/l)
8/4/2019 Carbon Price Package
12/35
Electricitygeneration; 36%
Direct fuelcombustion;15%
Agriculture;15%
Transport; 14%
Sources of carbon pollution in Oz and
those under carbon price
Source: Australian Govt, DEECC analysis ofNational Greenhouse Gas Inventory, 2009
Excluded:-Agriculture-Land use emissions-Household andbusiness light vehicle use
-International transport
Fugitiveemissions; 7%
Industrial processes; 5%
Deforestation; 5%Waste; 3%
8/4/2019 Carbon Price Package
13/35
Who pays the carbon price?
Source: APH.gov
8/4/2019 Carbon Price Package
14/35
Effect on jobs and the economy
The Australian economy will continue to prosper while cuttingcarbon emissions
Employment is projected to grow strongly with a carbon priceSource: The Treasury, Australian Government
GDP
8/4/2019 Carbon Price Package
15/35
Electricity generation to 2050
A carbon price makes polluting electricity more expensive Renewables become a better long term investment
i.e. Conventional coal is almost completely gone by 2050
i.e. Over 40% of electricity comes from renewables
Source: The Treasury,Australian Government
8/4/2019 Carbon Price Package
16/35
Effect on prices
Prices will rise a total of 0.9% between now and 2016 due to thecarbon price
Average household bills will increase $9.90/wk before anycompensation and assuming you do not take action to avoid this
Source: The Treasury,
Australian Government
8/4/2019 Carbon Price Package
17/35
Household compensation
Over 50% of money from carbon price Tax cuts, pension and benefit increases Tax free threshold tripled to over $18 000 Average household compensation $10.10/
wk compared to average cost of $9.90/wk
https://www.cleanenergyfuture.gov.au/
Household-assistance-estimator
8/4/2019 Carbon Price Package
18/35
Household compensation
Take home message:- Oz has ~9 million households- 6 million will be fully compensated
- 8 million will receive some compensation, many onlyface costs of $1 or $2 /wk
Source: Australian Govt
Household
adjustedtaxable
income
Single
Couple
withoutchildren
Couple
withchildren
Single
parent
%
households
%
Receivingsome
assistance
%receiving>100% of
expectedcost of
living
impact
Low (less
than)
$30,000 $45,000 $60,000 $60,000 34 100 100
Middle(between)
$30,000-$80,000
$45,000-$120,000
$60,000-$150,000
$60,000-$150,000
40 97 66
High (above) $80,000 $120,000 $150,000 $150,000 26 74 18
8/4/2019 Carbon Price Package
19/35
Business compensation
Includes both free permits and grants for emissionreduction investments
Trade exposed emissions intensive industries getvery generous support
- Receive ~95% or 66% of emission permits for free- % of free permits decreases at 1.3% a year
- Compensation based on industry average whichcreates an incentive to reduce emissions
- Assistance worth $9.2 billion over 4 years
- Level of assistance to be reviewed by the PC
8/4/2019 Carbon Price Package
20/35
Business Compensation $1.2 billion Clean technology program for
manufacturers- help for less emissions intensive manufacturers
- grants to improve energy efficiency and decrease theirenergy use
- grants for business R&D into emissions reductions
- government and industry share the costs of investments
Clean energy skills program Small business assistance (asset write-off) Assistance for any regions heavily affected by the
carbon price
8/4/2019 Carbon Price Package
21/35
Renewable energy
$10 billion dollar Green bank- Clean energy finance corporation
- Support renewable energy, energy efficiency and low
pollution technology- Invest in commercialization and deployment of plants plusin businesses that manufacture components
Australian renewable energy agency- Merge $3.2 billion of existing programs (i.e: solar flagshipsinto one agency)
- Includes R&D
Renewable energy target (20% by 2020) retained
8/4/2019 Carbon Price Package
22/35
Other measures
Coal buy out - money to close ~2000 Mw of themost polluting coal plants
5.5 billion over 6 years to coal generators (freepermits and cash)
Extra help for Steeland Gassy coal mines
- government specific
measure
Source: Simpsons fan 66 at en.wikimedia
Hazelwood power station
8/4/2019 Carbon Price Package
23/35
Biochar
Other measures Carbon farming
- Reducing pollution and capturing and storing
carbon in soil and trees
- Farmers who do this will earn credits they can sell to
offset other business pollution
Billion dollar biodiversity fund
8/4/2019 Carbon Price Package
24/35
Governance
An independent climate change authority- recommend short and long term targets
- review progress- aims to remove some of politics from CC action
Clean energy regulator- will administer the carbon price scheme
Productivity commission-
review industry assistance, watch for windfall gainsetc.
- track international action Governance gives scheme flexibility
8/4/2019 Carbon Price Package
25/35
Targets and Emissions
Minimum 5% decrease by2020 (24% decrease on
BAU) 80% decrease by 2050 During emissions trading up
to half of emission reductions
can come from internationalcredits/offsets
Source: The Treasury, Australian Government
8/4/2019 Carbon Price Package
26/35
Is it EASI?
Effective- package will reduce emissions
- current 2020 target is below our fair share but scheme has flexibility tochange this
- exemptions for some, makes cuts harder for others
Affordable- carbon pricing is cheapest method to cut pollution, but giveaways to
various companies increase the cost of the scheme
Sensible- only modest effects on the economy, little overall effect on jobs, bothwill grow strongly
Innovative- package moves Oz towards a low carbon economy, essential for
affordable long-term emissions cuts
8/4/2019 Carbon Price Package
27/35
Main criticisms
2020 target too low Doesnt cover transport Too many polluter giveaways
But do these undermine the scheme?
Answer: No
8/4/2019 Carbon Price Package
28/35
Dont throw out the good inpreference for best.
Professor Ross Garnaut, July, 2011
8/4/2019 Carbon Price Package
29/35
8/4/2019 Carbon Price Package
30/35
Thermometer and satellite
temperature datasets all agree
Source: skepticalscience.com
8/4/2019 Carbon Price Package
31/35
Why it is warming?
The principal warming and cooling influences on climate since 1750
Source: IPCC AR4
8/4/2019 Carbon Price Package
32/35
Why are electricity prices rising?
Garnaut update paper 8. (2011)
8/4/2019 Carbon Price Package
33/35
China
Pledged to reduce its emissions intensity by 40-45% by 2020.Chinas actions represent by far the largest contribution to reducing global
emissions below what they would have been under business as usual Garnaut,final report (2011)Actions include: closing inefficient power plants and factories, raised taxes onsome emissions intensive industries, massive support for low emissions powergeneration and transport, emissions trading schemes in pipeline.
Source: Garnaut,
final report (2011)
8/4/2019 Carbon Price Package
34/35
Voluntary action
Voluntary action (VA) will be treated asadditional to the cap. I.e.: with a 5% target to2020, if VA reduced emission 1% the 5% target
would mean a 6% total drop. VA include
1. A tax deductable pledge fund that will helpindividuals buy and cancel pollution permits
2. Greenpower purchases. Remember to keep the effect of VA in
perspective: the total cap will be ~500 milliontons
8/4/2019 Carbon Price Package
35/35