I said nuclear, dammit!

It never ceases to amaze me how proponents of nuclear power can be against a carbon price, the very piece of policy required in this country to make it economic. At the moment, nuclear power remains significantly more expensive than fossil-fueled power, at around twice the cost.

Yet Ziggy Switkowski, one of the country’s most ardent promoter of nuclear-powered energy supply for Australia, rails against the open letter from economists supporting such a policy, in his piece yesterday Refuse the Carbon Tax’s Junk Mail.

Perhaps unwittingly, his contribution powerfully illustrates the point that the economists and Garnaut are making: that our national interest is served by letting the carbon price be the arbiter of the best abatement solutions, and not the bureaucracy, the politicians and the advisers.

We should start by acknowledging that Switkowski accepts the underlying science of climate change, including the contribution of man-made fossil fuel emissions to the higher concentrations of CO2 and other greenhouse gases in the upper atmosphere. It would, of course, be untenable to be trying to promote a nuclear industry in Australia while also saying that the science was unfounded. But nevertheless, if one accepts the science, then the next question is what to do about it.

Switkowski says that “economists should be helping us understand whether such a tax is the best catalyst for a generational transformation of our economy (as Garnaut asserts), or whether it derives from a political ideology consistent with social engineering, income redistribution and pork barrelling”. Given the title of his piece, we are led to presume that a carbon price is more the latter rather than the former, yet he offers not a single piece of critique as to what the economists or Garnaut are actually saying and where their arguments might be flawed. What they are actually saying, consistently, is that the carbon price IS the best catalyst for generational transformation of our economy. It leads to a much lower cost way of reducing emissions, because it unleashes the power of the market and innovation to deploy existing technologies to optimal effect and to pull forward new technologies.

The irony here is that the “political ideology consistent with social engineering, income redistribution and pork barrelling” all come from the alternative policy. In eschewing a market-based approach, we rely on a small number of politicians and their advisers to make decisions about abatement; a process that is highly susceptible to lobbying. If abatement is taxpayer funded and susceptible to a political process, then we are almost guaranteed to end up with a higher cost way of meeting any given abatement task. As Garnaut puts it “we would rely on a the ideas of a much smaller number of politicians and their advisers [and] while some of these ideas might be brilliant, in sum they would not be as creative or productive as millions of Australians minds responding to the incentives provided by carbon pricing and a competitive marketplace”.

At the same time, the abatement challenge gets even harder because without a carbon price our emissions continue to grow, as our energy system continues to be based on last century’s coal-dominated fuel mix. We would be playing catch up, with emissions growing out of control and taxpayers trying to subsidise abatement to control it.

Case in point, Ziggy calls for a “disciplined [Energy] White Paper process” and then “adopting best practice energy technologies and solutions”, before (if ever) adopting a carbon price. A White Paper process is a government piece of work, susceptible to consultation/lobbying. There will be lobbying, for example, for nuclear to be included in the energy mix. Others will lobby for renewables, and others for carbon capture and storage. The choice will be made by some faceless bureaucrat that has no hope of getting it done with the efficiency of the million minds at work in the marketplace.

The alternative of a market-based approach takes this role off government, and uses the price to decide the best abatement solutions and to pull through new technology. Moreover, without a carbon price, the new technologies, or existing but more expensive low emission technologies, will struggle to eek out a role.

Today we are reaping the benefits of the liberalisation of the energy markets in the 1990’s. Generators compete with each other to offer their power to the market for each half hour period, and this has led to wholesale power costs very close to long term marginal costs. The policy vision underpinning this was not to specify the plant mix going forward (that was the preserve of the old state-owned utilities like the SECV), but to ensure least cost and reliable energy supply. Similarly, the policy vision now is to overlay a carbon constraint on the same energy market, to then deliver least cost energy while also minimising total greenhouse emissions. There is no need, as Ziggy would prefer, to go back to the central planning days and define the required plant mix. Doing that would guarantee high cost energy supply.

It might make you wonder why Switkowski would prefer the White Paper route. Is nuclear not quite as economic as he would like to think? Would it not cut it in the market against other alternatives? Is convincing the Minister or the Department the only way of it seeing the light of day? Is it easier to convince taxpayers to part with the billions to support an industry than going head to head with the competition?

Economists have been relatively clear about why a carbon price is required. Ignoring them will consign future generations to much lower prosperity.

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Comments

  1. Who ever you are.
    Thanks for the link to Ziggy Switkowski’s article.

    Surprised that you’re unable to comprehend his logic.

    Guess were all opinions are set in concrete.

    • Yeah I read that piece from Ziggy yesterday and couldn’t make head nor tail of it. We don’t need any more friggin’ white papers, green papers, or papers of any colour. If you want the market to sort out the least-cost abatement, put a price on carbon emissions and get the hell out of the way.

      It never ceases to amaze me how many so-called “capitalists” like the Zigster abandon this concept when it comes to the issue of climate change. Denial is fine, but how a supporter of free markets can accept the consensus science and insist that pricing carbon is not the best way to go, I don’t know.

      Interestingly, there are plenty in the denialist camp that are huge supporters of nuclear energy. I’m not sure why, probably because most Greens despise nukes, so of the Greens are against it, denialists must be for it. Denialists aren’t exactly deep thinkers after all, they’re just reactionaries.

      FWIW, I don’t think the world is going to get out of this bind without resorting to nukes. Renewables might be able to carry the load in certain places (e.g. Iceland with geothermal) but not in the wider world. The French have the lowest emissions of any major industrialised country, and they achieved that with nukes. They have have far more progress than the Germans with their gazillions of solar panels and thousands of wind farms.

      Sad, but true.

      • “Denialists aren’t exactly deep thinkers after all, they’re just reactionaries. ”

        /sigh

        Why are childish and idiotic smears like this not being deleted?

          • Yes I can imagine. Still, to call someone a ‘denier’ is to equate a skeptic with a holocaust denier. It’s a pretty big smear.

            To be honest, I don’t mind it all that much (in the ‘give them enough rope’) kind of way. I just don’t think it’s the kind of thing you want on your blog.

          • MattR – There was a great article recently where Paul Murray pointed at the new McCarthyism directed to any that held an alternate view – disparaging condescending references to ‘denialists’ and the like. A form of totalitarian censorship of views not deemed acceptable to a self-appointed carbon tax cabal. Will try and find the link.

  2. France (85% Nuclear) still manages to get a much cheaper electricity than Australia with all its cheap coal.

    • As said before most of the energy cost in Nuclear Energy/Green Energy is the financing cost as these type need large up front investment but are cheap to run (unlike Gas/Coal).

      Offer public financing as the State can borrow much cheaply than private entities and we do not need to increase dramatically the energy cost and feed the financial service industry.

      Most of the $$$ of the cost increase by pricing carbon will go to the bankers, not the manufacturers/managers of our energy facilities.

  3. But will nuclear power be discussed?

    No use to try and beat this drum if one is going to be excluded from the equation.

    If nuclear power is on the table, why not rather subsidise it and make sure it gets utilise as soon as possible? Why penalise the industry first to force them to change? Why not offer incentives then?

    I don’t understand. On the one hand the progressives tell us that we should offer children incentives to change and not enforce change by punishment, but yet on the other hand they say the exact opposite for adults and business.

    Actually I do understand. It is very simple. They can only view things in isolation and can never see the big picture. Proof?

    If the whole picture was taken into account wrt carbon mitigation, then the wisest thing will be to offer incentives for change in Australia until such time as the WHOLE world signs up.

    The result of viewing issues in isolation is the foundation for the creation of the nanny state. It reminds me of a toy that my baby daughter has. 4 worms in a box. She can hit the one on the head into the box and one of the other ones pops out. That is exactly what is happening in the world dictated by the socalled progressives. They go full blown to “fix” one issue as a pet project, but then ignore the other “worm” that pops out.

    Exactly what happened with the easy credit issuance. Yes it started maybe with the very honorable idea of the home ownership dream, but alot of people are still ignoring the consumption debt worm in the other corner.

    • Carbon E Coyote

      It is wrong, IMO, to characterise a carbon price as a “stick” (or penalty) and budget measures as “carrot” (or incentive). The carbon price is both stick and carrot in one … it enhances economic return of lower emission technologies while also disincentivising higher emission technologies.

      Q: Where do the subsidies come from?
      A: Taxpayer funds.

      There’s no bottomless pit of money.

      • Read my post again. The carbon price will only be a penalty if you go it alone.

        If 3rd world countries could develop and invest in nuclear energy technology 20 years ago already from a very much shallower pit of money, then surely Australia could do it?

        Why not address my point of nuclear on the agenda? It is not, so my point was that your critisism of Twiggy is no more than a cheap shot.

        Nuclear will not be on the agenda as apparently it is too dangerous.

        That being the case the carbon price in Australia IMO is a farce. If they were serious, carbon was such great moral challenge & this decade was so crucial, then you find the quickest, cost effective way to make a difference. That means nuclear.

    • Sooo – you are really comparing bringing up children and the machinations of the energy market ?

      I suppose, not being a “progressive” you like to leave your kids in a room and let them compete for limited resources in the belief that only the fittest and meanest will survive ?

  4. The fact that both geothermal and nuclear will get a better run under a carbon dioxide tax is a sliver lining, not a reason to support it.

    It is still a tax designed to take from the resources from the productive and give them to the unproductive.

    I can well understand the conflict in a nuclear supporter. Nuclear engineering is the most demanding technical, science/engineering based discipline there is. Climate science is the least. Politics is the sole problem facing nuclear energy; it is the sole reason for a carbon dioxide tax.

    The fact that it is potentially beneficial to the nuclear industry creates a distinct tension between rationale and pragmatism. Is the (potential) (personal) benefit of introducing nuclear power worth the (certain) (community) costs of a carbon dioxide tax?

    • Whatever path you choose for pricing carbon is to do take from the productive and give to the unproductive as you put it. The whole point is that carbon has never been priced before so doing so is likely to make things once cheap, more expensive.

      Actually, a better way to put it would be to say you are shifting resources from something that had the illusion of being productive (through unpriced carbon) to something more productive that does price carbon.

      The question is do you want to do in the most efficient manner possible through a market price or through central planning which is likely to be less efficient.

      • The question there is whether carbon dioxide is something that should be monopolized by the state, and thus have a resource rent placed upon it.

        Given that the atmosphere is a worldwide resource, in a self-stablizing system… It would be a bit like the effect of a council charging a full land value tax. The value of the land will quickly approach zero – which is the outcome seen anywhere the market approach has been tried.

        In this way, the ‘imperfect’ mechanism of central planning may well better emulate the effect of a worldwide application of the system.

  5. You lot wont even consider nuclear power, so why bother with this post?

    Your argument here seems disingenuous at best.

    • Carbon E Coyote

      Not sure who you are referring to as “you lot”. The original post only makes sense if nuclear is being considered. Economics never rules anything in or out; that’s for the politicians.

    • Who is you lot? You accuse us bias yet you have a far bigger one against some notion of ‘us’. A carbon price will deliver nuclear if it is efficient enough to compete. QED.

      • “you lot” here (and i apologise for being lazy here) refers to the group supporting carbon taxes and action against anthropogenic warming. Nuclear has always been off the table when discussing carbon taxes, emissions trading and alternative energies.

        Stating that a carbon tax will deliver nuclear when it is plainly off the table, just to respond to Ziggy’s comments, is disingenuous. I dont see how you can justify your position by simply ignoring the political side of the equation nd claim to argue ‘economics’; the entire premise of a carbon tax is based on political and bureaucratic will and not ‘the market’ nor economic forces.

        It is not a ‘market’ if you are forcing participation through an external mechanism (ie government decree). It is not a ‘market’ if you are restricting options using political will. Saying that ‘the market’ will find an efficient outcome in that environment is completely off base.

        You may criticise Ziggy for having a pro-nuclear stance hidden in his call for a white paper, however i humbly suggest that this is simply reflective of your own blog posts which promote your ideology using some pretty strained economic arguments.

  6. Nuclear power is not the answer. It is cost prohibitive – low ROI. Germany has stated it will start to decommission its Uranium power plants with concerns over safety. Thorium is a better alternative, but still not the answer.

    I’ve been reading a number of scientific journals over the past 20 years and some promote the ideology that sometime in the near future there will be a move away from centralised power distribution.

    Having the ability to supply your own household needs (and even transport) with your own low cost, safe and clean energy source is fast approaching. This will cause a gigantic effect to the world economy (if not greater) as did the Internet revolution of the mid to late 90s. Maybe this is what’s needed to help pull this world out of the economic depression heading our way.

    I’ve been arguing the alternative energy path with a number of my skeptical engineer mates, who’ve been stuck in left-brain mode, for years. With the recent developments, they are beginning to entertain the possibility.

    • Nod, I’d love to believe you’re right, but I can’t delude myself that we can run our civilisation on a decentralised grid based on renewables.

      I think nukes are inevitable. Lets hope we can make them safer.

      • Nukes are the safest power yet devised. Take recent events in Japan for instance. Deaths related to hydro – 1800. Deaths related to fossil fuels – dozens. Deaths related to nuclear – 1.

        More radioactivity is released by a coal power plant than a nuclear one, kWh for kWh.

        We don’t need to make nuclear safer.

        • “Nukes are the safest power yet devised.”

          Totally disagree!

          We ain’t seen nothing yet with the economic and social implications of Fukashima. Tepco has been lying to the world along with the Japanese government. There are 3 reactors in total meltdown right now and excessive radiation has already reached the US.

          This disaster is going to dwarf Chernobyl!!!

          http://edition.cnn.com/2011/WORLD/asiapcf/06/06/japan.nuclear.meltdown/index.html?hpt=hp_t2

          http://www.chrismartenson.com/blog/exclusive-arnie-gundersen-interview-dangers-fukushima-are-worse-and-longer-lived-we-think/58689

          • There was no nuclear explosion in japan. The partial meltdowns (like three mile island) led to a build up of hydrogen which exploded. There was release of steam which contained short lived radioactive isotope (only dangerous for short period) and release of radioactive coolant onto the reactor floor.
            Now compare that to airborne nuclear tests and you are clearly overreacting.
            No one has been killed in this nuclear disaster, although the economic cost is huge.

          • Rob, have you bothered to read the article links?

            Arnie Gundersen is widely-regarded to be the best nuclear analyst covering Japan’s Fukushima disaster and he (and CNN) is saying there are three reactors in TOTAL MELTDOWN.

            Three Mile Island was only a partial meltdown and was brought under control. Fukashima is out of control and is going to be far worse!

      • Lorax, removing the reliance households have to the grid should be quite practical with fusion technology.

        I own a remote property with a 5kw solar array and a 3kw wind turbine with a bank of batteries – and this more than fulfils my energy needs – but it came at a cost of $80K. The average household cannot afford this.

        Andrea Rossi’s cold fusion device (Energy Catalyzer) will hopefully fulfil this for around $2k per Kw – and a 2 kw unit will suffice a household – as this will produce 2kw per hour – 24/7. Batteries will still be needed to boost supply when there are additional load requirements.

        There’s also a new generation of capacitors (although expensive at the moment) but far more efficient than batteries, having quicker charging and discharging rates without the inherent limitations of gel cell or acid cell batteries, and with a greater lifespan.

        The Energy Catalyzer’s running cost is estimated to be less than 1 cent per kilowatt-hour. This can be up scaled to megawatts if required and retrofitted into existing power stations.

        Here’s a link that will explain the progress of Fusion further and commercial release date of Oct 2011: http://pesn.com/2011/05/31/9501837_Cold-Fusion_Number-1_Claims_NASA_Chief/

        Andrea Rossi is self-funded which must speak volumes.

        I’m just gob-smacked he’s been able to get this far without mysteriously dying of a heart attack!

        • Yeah well, excuse me if I remain extremely skeptical of the Energy Catalyzer. I’ve been following this for a while (with interest) but I’ll be astonished (pleasantly) if it develops into anything commercially viable.

          • We’re just 4 months away – and hoping too mate, but probably a little more optimistic than yourself.

            There are also positive advancements made in overunity magnetic motors (real free energy devices) and an announcement may come from Japan in this area in the very near future.

            The technology exists for fuel cells and overunity magnetic motors – it’s the suppression factor by the energy cartels and associated BS factor about defying the laws of physics.

            We see less than 10% of our known universe and have trouble explaining a fraction of what we see. The existing nuclear and gravitational theory of our universe is now being challenged by the electric/plasma model that puts more ‘pegs in the right holes’ than our current model.

            Mainstream archaeologist can’t seem to properly explain or agree on how the damn pyramids and larger megalithic structures were constructed. What did the ancients know that we don’t?

            There are so many unknowns and an infinite number of unknown unknowns.

            What Andrea Rossi discovered is by combining two elements together in a chamber and by applying the correct frequency and power factor, it causes a shattering of the forces that hold molecular structures together releasing more energy than what is required. In a less sophisticated form, it’s a bit like when an opera singer hits a high note and is able to shatter glass in close proximity. She had reached the resonant frequency that binds glass together.

          • Yes Nod, thanks to your previous links, I too will follow this. Could be extraordinary.

          • Indeed 3d1k.

            This argument reminds me of the fall of the Roman Empire along with the rise of the Roman church and Islam and the ensuing crusades which evoked the Dark Ages – the decline of civilization in Western Europe. All non-Christian books were burned in Rome, Athens and the Library of Alexandria in Egypt reducing the science of a millennium to ash. All scientific thought which contradicted the Bible was suppressed. If rationality and observation contradicted the “revealed Word of God” then it was rationality and the observer who were in error.

            Humanity’s Renaissance (overunity energy sources) hopefully isn’t too far away…

        • “Andrea Rossi is self-funded which must speak volumes. ”

          Unfortunatly what it tell us is that no one else believes in it …

          I would love it to be true, but one thing we have to think about is the speed at which we can bring any new technology into production.

        • Carbon E Coyote

          The Nod, I’d like to make a bold prediction: I think this technology will always be (at least) 4 months away. Happy to be proven wrong, because I agree that on those economics it could revolutionise energy supply. But it has all the hallmarks of something that will never actually see the light of day. The main problem is that assumes a source of hydrogen. Hydrogen is one of the most energy intensive molecules to obtain because it is highly reactive and has already reacted to form something else (like water). It doesn’t look to me like the economics include the cost of producing the hydrogen (electrolysis of water or reformation of natural gas, either of which require large amounts of energy and are fossil-fuel based).

          I look forward to your posts in October 2011 when all will be revealed.

  7. “Given the title of his piece, we are led to presume that a carbon price is more the latter rather than the former, yet he offers not a single piece of critique as to what the economists or Garnaut are actually saying and where their arguments might be flawed.”

    Ziggy is a physicist. The reason he has not specifically critiqued anything is because the justification for a Carbon Tax has largely been limited to emotive hand-waving arguments. There is nothing to critique.

    His article is saying: ffs guys, get some numbers. Analyse this stuff, don’t just foist it upon us.

    • That is not his point. That is what he is hoodwinking you with. He is lobbying for nuclear. A carbon price will deliver nuclear if that is the most efficient outcome. If not, why the hell would you want it?

      • Of course he is biased towards Nuclear.

        Why the hell would you want it is exactly his point. Do we want it? Is it a constructive way to use our time/energy/money? or are we just screwing ourselves over for no reason at all?

        The debate has largely been run by people who can’t do maths. He is suggesting that we think a bit about this rather than just being trendy.

    • “Ziggy is a physicist”.

      He’s also a businessman. He ran a little telco for a while there IIRC.

      Pricing carbon means you don’t need some bureaucrats to “analyse this stuff”. The invisible hand just produces the cheapest form of abatement.

      Of course ideally the market would set the carbon price as well, but that idea brought down a Prime Minister.

      • “Pricing carbon means you don’t need some bureaucrats to “analyse this stuff”. The invisible hand just produces the cheapest form of abatement.”

        This is a massive economic fallacy. The ‘price’ only exists through government intervention. There is no ‘invisible hand’ the hand is there for all to see.

        It’s made of iron and it’s clenched in a fist.

        • I’ve read a lot of your comments on this and other threads, and it seems you don’t understand the concept of a negative externality. In such cases, free markets will not simply arise by themselves.

          Secondly, are you aware that even the stockmarket would not exist in its current form without “government intervention”? Limited liability for shareholders, various securities laws, regulation by the SEC, etc. All necessary for capitalism to run smoothly — all enforced by the government.

          • The ‘externality’ argument relies entirely on ‘the science’ being correct. I have argued, very strongly, as have many others that it’s not. Therefore I do not accept that there are any externalities at all.

            For markets to exist all you need are goods and services to be traded. They even existed before money did. Governments created money to make it easier, but the goods and services are what make free markets.

            The idea that carbon dioxide, an invisible trace gas, should be some good for people to trade is absurd. Although, if you disagree, I have a tower in France you might like to buy.

          • Matt – Think of a coal fired power station for example. You don’t accept there are any negative externalities here??

            Asthma? Mercury poisoning? Respiratory disease?

          • “You don’t accept there are any negative externalities here??
            Asthma? Mercury poisoning? Respiratory disease?”

            Of course I accept this. I also accept the need for governments to intervene and impliment pollution controls to stop them from happening.

            As a whole we have done very well reducing our pollution levels. China are replacing their old, dirty, Coal power plants with the ones we use. Look outside, our skies are clear, the air is breathable.

            Pollution controls provide tangible benefits for the betterment of society. CO2 is not pollution.

        • The iron fist is only required because carbon emissions have been zero cost for centuries, a situation the global fossil fuel lobby would very much like to see continue.

          • Right “let the plebs eat cake” “the little people must be told what’s best for them.”

            As an ardent libertarian and freedom loving Australian I find your comments detestable.

        • Im glad you picked up on this MattR, you dont get the invisible hand by use of the iron fist…

          why stop at carbon, lets manufacture a market for sunlight, we Australians get far too much lets see how the invisible hand works so we can redistribute that to England…

        • Not pricing carbon is a market failure. It is therefore appropriate to price it via rules.

          If left entirely to itself the market would give us efficient power until the world melted.

          I’m in favour of markets, Matt, but with a balance of rules.

          There is nothing in pricing carbon that prevents nuclear from becoming a real option. If markets determine it will make them the most money, it will happen. That will intrinsically include pricing such things as community resistance to the idea…

          • “Not pricing carbon is a market failure. It is therefore appropriate to price it via rules. If left entirely to itself the market would give us efficient power until the world melted. ”

            Only if you accept ‘the science’ which is based on an unproven hypothesis. Don’t you see the issue here? You have to accept that emissions of a harmless trace gas are somehow damaging the world. There is absolutely no evidence to support this theory conclusively. All we have are models, exaggerations and in some cases, fraud.

            Co2 levels have been MUCH higher than they are today and life absolutely thrived. Personally I’m not worried.

            I support nuclear because it’s the future and we have so much Uranium here it’s idiotic that we don’t use it. The idea that it will somehow save us from the four horsemen? Laughable.

          • MattR

            You are right on with your comments. It is based on science that is not accurate what so ever. Yet the US has record snow fall this winter and its still GW. Yet Al Gore and the rest of these lunatic GW alarmists fly around on their big jets, cars, and have houses that are massive. It just blows my mind that Australia wants to implement a carbon tax on junk science.

            “Only if you accept ‘the science’ which is based on an unproven hypothesis. Don’t you see the issue here? You have to accept that emissions of a harmless trace gas are somehow damaging the world. There is absolutely no evidence to support this theory conclusively. All we have are models, exaggerations and in some cases, fraud.
            Co2 levels have been MUCH higher than they are today and life absolutely thrived. Personally I’m not worried”

  8. “that our national interest is served by letting the carbon price be the arbiter of the best abatement solutions, and not the bureaucracy, the politicians and the advisers”.

    Mr Coyote, you are either ignorant of, or brazenly ignoring the contradiction in your statement above. Who is setting this carbon ‘price’ & more importantly who is guaranteeing that there is a carbon ‘price’ at all if not the “bureaucracy, the politicians and the advisers (such as yourself)”.

    I issue a challenge to you & your fellow carbon creditors;

    Issue your own carbon credit, WITHOUT government backing, let’s see who hits your offer, let’s see just how marketable your carbon paper is without the guarantee of government bond equivalence.

    Let’s see just how ‘money good’ your carbon credit is. These carbon credits sound like such a good deal I’m sure your ‘private label’ CC’s will be snapped up by investors.

    • “Let’s see just how ‘money good’ your carbon credit is. These carbon credits sound like such a good deal I’m sure your ‘private label’ CC’s will be snapped up by investors”

      Perhaps CeC should invest on the Chicago Carbon Exchange 😀

    • Exactly. You cannot have market failure where no market exists.

      This is a decree based passed down by the government and not the market place.

      Markets in a free market sense are created in the market place.

      Arr, Cap’n MattR, we’ve been passed the black spot!

  9. I, for one, am 100% in favour of nuclear power, but not for the reasons stated in this article. Nuclear is the way of the future and there are far better ways of implimenting it than by forcing other companies to raise their cost of power production.

    As I have stated several times before, making one thing more expensive does not make it’s competing product ‘more economical’ that product is just as inefficient as it was before, it’s just that it’s competitor is now JUST as inefficient.

    Nuclear is only expensive in the production phase. Once completed it is extremely cheap to run. Using a ‘market based approach’ by making other forms of generation won’t change the fact that Nuclears biggest cost is incurred before any power is generated.

    “But nevertheless, if one accepts the science, then the next question is what to do about it.”

    Yep, IF one accepts ‘the science’. That science that is not anywhere NEAR supported by enough evidence to justify any action. That ‘science’ that is accepted by so many on nothing but religious faith. Good to see you used the correct word there, that being “if”.

    “Economists have been relatively clear about why a carbon price is required. Ignoring them will consign future generations to much lower prosperity.”

    Aside from the fact that this is utter nonsense (for every economist saying it’s a good idea there are more that say it’s a terrible one) what’s funny is, other contributers of macrobusiness have had blog posts complaining of just how wrong most economists are. So all of a sudden a few select economists, basing their views on absolutely NO real world data (just look at the EU’s ‘abatement’ record, it’s laughable, as is the economic result), we are supposed to take their word for it.

    Excuse me if I pass on that one thank you very much.

    I also wanted to touch on the fallacy of the ‘market based approach’. This is nothing but pure spin. The only thing ‘market based’ about this policy is that it is a massive government intervention in to free markets. Thus any ETS is pure bubble. Once again, for a blog that prides itself on spotting bubbles, for you to now advocate the government creating one is ridiculous.

    The market has dictated the cost of emissions of carbon dioxide (a harmless odourless gas required for life on Earth), that cost is $0 per tonne. Any cost implemented on that by a government is nothing but a price floor above equilibrium, feel free to ask any first year economics student what happens when you do that.

    (a link for anyone interested in the science of it – no comment from me http://joannenova.com.au/2010/02/4-carbon-dioxide-is-already-absorbing-almost-all-it-can/)

      • The biggest cost of nuclear is the contruction. I’m not against governments building vital infrastructure.

        After that, power generation is very cheap. I’d fully support them building nuclear power stations and selling them at a loss.

        Australia has so much uranium and so much empty space (for nuclear waste storage) it is insane that we aren’t using it.

          • I know I know, wikipedia. Sources are all listed though.

            http://en.wikipedia.org/wiki/Economics_of_new_nuclear_power_plants#Capital_costs

            Enjoy.

            The article quotes an article from a business magazine (there are other sources but this one is a good one):

            “One of the big problems with nuclear power is the enormous upfront cost. These reactors are extremely expensive to build. While the returns may be very great, they’re also very slow. It can sometimes take decades to recoup initial costs. Since many investors have a short attention span, they don’t like to wait that long for their investment to pay off.[6]”

  10. Alex Heyworth

    Seems to me that nobody has yet engaged with the main point of Dr Switkowski’s article, which is that despite all the huffing and puffing, despite the myriad international meetings, despite all the overblown rhetoric, CO2 emissions continue their inexorable rise and seem certain to continue this rise for the foreseeable future.

    In this context, a carbon tax in Australia is a complete waste of time. There is no evidence that it would even lead to lower global emissions (even assuming it does lower Australian emissions).

    • “In this context, a carbon tax in Australia is a complete waste of time. There is no evidence that it would even lead to lower global emissions (even assuming it does lower Australian emissions”

      Exactly, it staggers me that people can still be pushing this despite the fact that even Spain has higher emissions and they have destroyed their economy for the Green dream.

      • “Exactly, it staggers me that people can still be pushing this despite the fact that even Spain has higher emissions and they have destroyed their economy for the Green dream.”

        And this Aussie Govt is stupid enough to think they will be different….. makes me laugh

        • Alex Heyworth

          The devil is in the detail. How much is the tax going to be, and who is going to get compensated by how much? Until these details are known, we cannot know what the effect will be.

          The level of tax being bandied around at the moment ($20-30 a tonne) might be enough to slow the growth in Australia’s emissions. I doubt it will actually reduce them.

          As to the effect on global emissions, if the carbon tax here leads to lower use of coal for power generation, won’t that lower the price of coal, and make it more desirable to overseas power generators who don’t face a carbon tax?

        • It could, but only if you make the price so high that it results in a massive economic decline.

          Right now, growth = increasing emissions. Simply because efficient energy generation requires emissions.

          If you want to truly reduce emissions without killing the economy or even increasing the cost of living. The best thing to do is to fund research in to things that can provide baseline power (eg Fusion)then sit back and wait until it’s possible.

        • You are asking the wrong question here. the statement was that it would not lower global emissions, even if it lowers Australian emissions.

          Our emissions are too low to make any kind of difference globally. if you accept the premise that there is a global temperature that will rise as a result, then not matter what we do with our emissions it wont make a lick of difference to global the global temperature.

          Additionally, we continue to export coal, and hence even if we are changing our own energy generation mix we are exporting the emissions from that coal elsewhere. If we are exporting to countries using ‘dirtier’ coal plants (quite possible) we may even increase global emissions by reducing our own reliance on coal.

          However you look at it, any carbon tax or carbon trading scheme in Australia will make no material difference to global emissions or temperatures.

  11. Lets imagine some Venn diagrams shall we?

    We’ll draw four circles:
    – Alarmists
    – Denialists
    – Creationists
    – Supporters of nuclear energy

    It strikes me that the intersection of Creationists and Denialists would be large, especially in the US. This suggests a strong anti-science bias, and IMO, stupidity. Case in point: Sarah Palin.

    Its also striking that the intersection of Alarmists and Creationists would be near zero. I can’t think of anyone who is both a Creationist and accepts the consensus science on climate change. Not one … well, perhaps some Church leaders, but then I doubt such people believe in the literal creation story.

    I’d also suggest that the intersection of Denialists and pro-Nukes would be large, and oddly, the intersection of Alarmists and pro-Nukes quite small, even though nukes are the largest source of low-carbon energy at present.

    • The alarmists are in fact closely aligned to creationists. Zealous in belief, belief in the unprovable, shared apocalyptic vision, divine faith in their righteousness and steadfastness in their own correctness.

      Sounds like an evangelical religion to me – and carbon trading is its mammon.

        • Thanks, excellent, I agree – recommended reading to all who post here, whatever side of the debate.

        • Excellent?! I click through hopeful to find something remotely balanced and I see a photo of rusted-on denialist and sci-fi author Michael Crichton.

          Please guys, you’re not helping your case.

          Instead, please send me a link to a study in Science or Nature that supports your view. Oh that’s right, you can’t…

          • Explain this to me why is it Mt Kilimanjaro now has more snow than back in 2000. Look at the picture of 2008 wow there is more snow. Al Gore talked about it would lose all its ice and be gone…. Well it has gained ice. Explain this to me. Or are you going to tell me its Global Warming that is putting all the ice and snow back on the mountain. There is tons of evidence to prove that GW is a hoax.

            http://wattsupwiththat.com/2008/02/25/yet-another-inconvenient-story-ignored-by-the-msm/

          • LBS – i just did that.

            I clicked on the headline story on that site and it took me too …

            The UK’s Daily Mail. A newspaper famous for being scientificly inept, right wing and alarmist ( as in “gays are taking over our schools” “the shopkeeper down the road is a terrorist” kind of thing.)

            The story didn’t make any sense either …

          • You miss the point – Crichton is discussing environmentalism in terms of it being another belief system analogous to a religion – as I was equating alarmists with creationists. A certain religious conviction. Read it again.

          • The other side of the coin is also true. You show me scientific proof that it is real. NOT models based on assumptions. Actual, accurate, non manipulated data.

            Statistics emphasises the fact that you need a representative sample to draw meaning full conclusions.

            Lets say we have 250 years worth of data out of 20000 years. Is that sample representative seeing that it is only the last 1.25% of the population?

            Would any of you draw economic conclusions on the value of a share price if that was the information available?

          • Is that for me Matt?

            I didn’t mention the article, i only mentioned the evidence provided. I made no reference to the author at all …

          • Zentau it got deleted (not sure why, I was merely refering to abuse not actually abusing), and no it was meant for The Lorax 🙂

    • You don’t need to have an anti-science bias to think that much of the climate change rhetoric lacks rigor and fails to adequately distinguish important factors, such as the impact of any underlying (ex-humans) climate variation.

    • Actually the Alarmists cross pro-nukes is bigger than you think. This is populated by those with a strong and vigerous scientific view …

    • While I guess this is supposed to be toungue in check it presents the whole problem. Putting people in ‘boxes’ and thinking the other side is ‘stupid’ and being smug about it.

    • Lorax,
      Shit stirring is always welcome.

      But I would like you to add one more circle to your Diagram.

      -Peak oilers

      Who doesn’t think that circle wouldn’t be equidistant positive offset with the Alarmists?

      life as we know it will end because we run out of fossil fuel AND the icebergs melt.

      Tell me thats not like having a fly in your chardonay?

  12. Que sera, sera. What will be, will be.

    What concerns me is what the derivitive hooligans, GS and others will do in the OTC arena?

    Beware what you wish for.

    • I think it’s pretty obvious this is the only reason the idea has become politically popular over the last few years.

  13. I am not even willing to participate in this ‘climate religion’ debate. It has moved from science and economic reality to dogma and political ideology.

    The same people who don’t believe in ‘free lunch’ suddenly believe in ‘free market’ for carbon trading.
    The policy and the debate is completely absurd at all levels.

    • “The policy and the debate is completely absurd at all levels.”

      Agree. I just wish this was the end of it.

  14. Saw Hot cities, last night on SBS2, and they were interviewing a bloke who has been up on the Andes glaciers since 1974 taking ice cores. Even though it bloody cold today, the world is getting warmer.
    The two hot cities last night were Lima and Adelaide.

    I support Nuke power, I am lukewarm on a carbon price, given that 7 billion people are spewing forth a lot of hot air. I think the Chinese are the only ones that will end up benefiting and maybe GS.

  15. Thought I’d better mention ,I’m an
    Electrical Engineer…started working with
    Auto-electrics and Earth-moving machinery../DC..and early in my 25years progressed to the marine world…440v/AC right down to a potential involving electrolysis .o5 volts and milliamp
    drivers…Now,I build motor-homes and large sailing yachts..at present..of the standalone sort ,suit travelers..
    However,
    On this energy/pollution debate I,
    Have trouble getting a percentage of the problems that we as humans seem to have with the weather..So
    What percentage of the weather problems are we dealing with when comparing the time ,as in years to the total weather systems time…that’s
    What precentage of time have humans had problems with the weather cycle as a whole..(humans years troubled,of x billions years old weather patterns = %).
    Following on,
    I See we only appear to have trouble every 30-40 odd years,which correlates to other man-made problems more than I like to research…(booms/busts)and I have researched,over the years…
    But in and,
    I understand each-time that more and more demand is placed(globalization)and therefore a demand price is to leading more and more discharge ,but there seems no plan before placement to this extra growth ?, just extra costs as by extra demand and exhaust…very much a sell first,charge later environment…is the lack of plan..I question…
    With,
    Tis a strange piper ,too build desalination plants,while,selling to/fit-out/cool/heat,over-sized Mcmansions to large population increases of urban sprawl and then consider charging for energy generation inefficiencies…of no plan,to increased costings of restricted use..
    Finishing,
    With-out answers and a way to solve the problem of cleaner more efficient demand capable supply..It’s all pay the piper with-out the pipe..and that’s my gripe…cheers JR

  16. Reply to Nod from higher up:

    “I own a remote property with a 5kw solar array and a 3kw wind turbine with a bank of batteries – and this more than fulfils my energy needs – but it came at a cost of $80K. The average household cannot afford this.”

    What is a shame is that if houses weren’t $450k median, perhaps household could……

    Another example of housing as an unproductive investment sink

    • Yeah,and just in case you missed it ,be a shame… We could charge electric cars it almost seems…n
      run a bit of the house too..with Improvement Between
      Looks Lukey…

      PLT New Inventors.ABC

      http://www.sbs.com.au/dateline/story/about/id/601181/n/Electric-Dreams

      Funny thing about the sun solar relevance,
      it’s never running out and pretty reliable,free,..yet,still leaves us in the dark every-night..and never been voted out..I trust it ….cheers JR