States turn up heat on carbon trading
The states have expressed fears about the impact of the Rudd Government’s intention to impose an emissions trading scheme on the national electricity market, according to the lead story in today’s Australian Financial Review.
The AFR reports that the states warn that Victoria’s $15 billion brown coal power stations would, in effect, be bankrupt in a year. In an editorial, the newspaper warns, “Stand by for a conga line of special pleaders lining up for a financial analgesic to ease the pain of carbon trading.”The AFR continues, “NSW Treasurer Michael Costa is demanding that the scheme include compensation for any electricity generators affected, warning they may withdraw supplies to the $11.5 billion a year national electricity market in the short term or become financially unstable due to huge write-downs on their multibillion-dollar assets.”
The Australian reports that “Australians could be hit with higher electricity prices as new LNG export projects potentially double the price of domestic gas on the east coast just as power generators turn to the greener fuel under the Government’s new emissions trading scheme.”
Today’s Australian also runs a Newspoll on the issue that shows, “Most Australians are prepared to pay higher energy bills to fight global warming but support wanes when households are confronted with the extra spike in fuel prices likely to be caused by the inclusion of petrol in an emissions trading scheme.”
In an opinion piece in The Australian, Henry Ergas, the chairman of Concept Economics, warns about the consequences of following the emissions reduction strategies of green zealots.
Ergas writes that the recommendations made by the Garnaut review or the Government’s green paper “must be backed by estimates of those recommendations’ costs, and the modelling underpinning those estimates needs to be fully disclosed. If all we get is moralising waffle, the community will legitimately conclude that this particular emperor has no clothes. Should that occur, the Government will have no one to blame but itself when its proposals run into strong and sustained opposition.”