TiP

It’s an art form to deliver a long speech on a major policy while imparting the least possible information.

Greg Combet managed it at the National Press Club, Canberra, this week.

His eight-page speech entitled “Tackling climate change in the national interest,” contains exactly five short sentences of what might be seen as new information.

The most interesting of these sentences is the assertion that “millions of households will be better off under the carbon price.”

Now there are, in round terms, about nine million householders in Australia.

How do I know?

I look at the number of residential customers listed in the Energy Supply Association yearbook. At 30 June 2009 the number exceeded 8.6 million. Allowing for annual growth, it will now be close to nine million.

My understanding is that there are roughly three million households classified as low income.

The denizens of the Press Club could have asked Combet how many of the remaining six million will given “generous assistance” – his expression. They didn’t.

He said that pensioners and low and middle income households will be a priority, but he did not repeat the claim that the Labor Party made last year that “90 per cent of all households will receive assistance.”

His predecessor, Penny Wong, also claimed in one of her speeches promoting the Rudd government’s CPRS that “8.1 million working families” would receive “$660 a year on average” in compensation under the original scheme.

The Sydney Morning Herald recalls that, under the Rudd scheme, singles earning up to $30,000 a year and dual-income families with two small children earning up to $100,000 would receive compensation.

Combet also asserted at the Press Club that “demand for clean energy will grow because it will become cheaper relative to the current cost of burning coal for electricity.”

Which forms of clean energy does he have in mind?

His government believes that most of the change that will occur between now and 2030 will be through the use of gas for power generation, taking it up six-fold to 37 per cent of the electricity supplied at that point.

It believes renewable energy will be at 20 per cent of demand in 2030, driven by the renewable energy target.

It believes that coal-fired power supply will be just a fifth less in 2030, in terms of actual output, than it is today.

The $20 per tonne carbon price Combet used in his speech as an example of the cost impact on steel and aluminium producers will not bring about a massive change in the electricity industry’s current emissions.

It is unlikely to even drive the switch to baseload gas generation to meet new demand requirements.

It won’t be enough to help the wind industry overcome the problem that renewable energy certificates, as a result of the RET subsidies for solat power, are now too low in value to justify building new farms.

The purpose of a carbon price is not to encourage householders to be more energy efficient – and why would they be if heavily compensated? – but to ensure that resources for power generation other than coal overcome their current cost disadvantages.

Beyond 2030, it will require a price sufficiently high to enable renewable energy to overtake gas as a major resource. (Nuclear power is banned, remember.) But that is for the longer term.

The immediate future is 2020 and the government’s abatement target for then will not be achieved by a $20 carbon price this decade.

Federal Treasury, in recently released documents, canvasses a $40 per tonne price with a $1,100 overall annual household impact, if the tax includes petrol.

What level of compensation does the government have it mind? And for whom?

How can it commit future governments to ensure that the compensation it proposes to make available will be “permanent,” as Combert claims?

An unkind critic could suggest that Combet’s speech raises more questions than it answers.

Comments are closed.