Given that if the Americans go for an emissions trading scheme then Abbott is on board, these are sums that are going to dominate any serious carbon debate in Australia.
To illustrate what we are talking about I want to take you through the existing ‘5 per cent from 2000′ cut that the government is talking about and show that if we become serious instead of political and get down to the task there are some big decisions ahead on our use of fuels.
Australia’s 2000 emissions were 553 million tonnes – note the difference to the US level.
Now to cut that by 5 per cent does not look that hard. We merely go down to around 525 million tonnes. The trouble is that we are growing and by 2020 the ball park estimates are that our emissions will rise to around 664 million tonnes even after counting the renewable energy program.
So we have to cut emissions by 139 million tonnes to 525 million tonnes by 2020 on our criteria and much more than that if the American criteria are used.
The most straight forward way of quickly cutting emissions is to shut down Victorian brown coal generation and close the high-emitting South Australian station Playford B. The ill-conceived Rudd/Turnbull scheme has Australia possibly guaranteeing the brown coal power stations’ $7 billion debt. If we replace that with a sensible policy it would cost about $5 billion to eliminate and replace two Latrobe Valley generators with gas. Yallourn and Hazelwood are the two obvious ones. If we replace them with gas fired turbines we save about 26 million tonnes of carbon or about 19 per cent of the 2020 target. Remember that Rudd and Turnbull were going to raise $114 billion by selling permits so that looks good value and it could be funded by a 1.6 per cent lift in power prices over 10 years.
So why not do it again and spend another $5 billion shutting the other two brown coal generators? We would reach 40 per cent of our target by spending less than 10 per cent of the Rudd/Turnbull money.