Saturday, 16 February 2013

Carbon pricing and the problem of mixed political messages

The most important action taken in Australia to reduce carbon emissions is not the federal government's carbon tax with its very modest impact on electricity prices. The real curbs on energy use caused by market mechanisms have come from the prices forced upward by state government authorities investing in distribution infrastructure - more poles and wires. 
That reality is not something the federal Labor government wants to talk about. Instead it has taken the anomalous position of boasting about its carbon tax being a good thing while any other increases that similarly discourage energy use are bad. I really is a case of confusing mixed messages. 
In the United States the administration of Barack Obama has ruled out a carbon tax (he would not be able to get such legislation through the Congress even if he wanted to) but at least he is at last talking about the carbon use problem in a coherent fashion.
He mentioned the need for action on climate change in his recent inaugural address - failure to act "would betray our children and future generations" - and in his State of the Union speech he promised to take executive action if Congress failed to pass any kind of meaningful climate bill.
So far the President has not spelled out what form that executive action would take but restricting emissions from existing coal fired power plants is possible under an existing Clean Air Act. But he did make the case for such regulations during a recent Google+ hangout:
The truth is if you produce power using old power plants, you’re going to be emitting more carbon — but to upgrade those plants, energy’s going to be a little bit more expensive, at least on the front end. At the core, we have to do something that’s really difficult for any society to do, and that is to take actions now where the benefits are coming down the road, or at least we’re avoiding big problems down the road.”

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