Post archive – by topic

Entries in Australia (45)


States of decay: Complementing the federal carbon policy

Updated on Wednesday, April 24, 2013 at 23:10 by Registered CommenterMCJ

With the centrepiece of Australia’s climate policy not even a year old, most Australians are sick of it, or sick of hearing about it – fewer than 13% trust what politicians say about major public issues like climate change. And in the shadow of the Clean Energy Future package (CEF), state and federal governments are quietly letting other climate policies slip.

This “abdication of climate policy”, as Tristan Edis calls it, wouldn’t be so bad if Australia’s climate policy were perfect. But it isn’t; no policy is. The carbon price, while worth having, is a broad, blunt tool that covers but two-thirds of Australia’s greenhouse gas emissions. The rest of the CEF fills in some gaps, but there is ample room for further complementary climate policy at a state and federal level.

I wrote last year on this topic, giving reasons why state (or other federal) climate policies could still be worthwhile under the CEF. This would mean innovative approaches:

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Time-of-use Pricing Uncomfortable, But Not Flawed

Discussing the Government’s renewed push for electricity market reform on ABC Breakfast radio, in particular time-of-use pricing and the ability for households to shift their consumption, Dr. Lynne Chester from USyd said,

we all know when we’ve got a household full of children and teenagers it’s incredibly hard getting them to switch off all those appliances and not use electricity in particular heavy use periods.

Well, yes: getting people – adults or children – to change their behaviour is hard – but it’s also absolutely necessary.

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DEHSt discussion paper: Prospects for CDM in Post 2012 Carbon Markets

Earlier in the year I contributed to a discussion paper about the prospects for the Clean Development Mechanism; the part of the Kyoto protocol that enables the creation of internationally traded carbon offsets.

The German Emissions Trading Authority (DEHSt), part of the Federal Environment Agency (UBA), was/is worried about the fragmentation of international carbon markets without a clear successor to the Kyoto protocol, and wanted to look at provisions for offsetting by potential major carbon credit
buyers such as Australia, California, South Korea, and Japan.

The paper is now live on their website:

Discussion Paper: Prospects for CDM in Post 2012 Carbon Markets


Preventive health response to alcohol problems

Health researchers Michael Thorn (CEO of the Foundation for Alcohol Research and Education) and Professor Sandra Jones (Director of Centre for Health Initiatives at University of Wollongong) had an interesting article in Crikey yesterday pulling together some research on preventive health responses to alcohol problems. It’s paywalled (readable with a free trial), but here are some excerpts:

Price response: Studies consistently show that lower socioeconomic groups and people with limited disposable income (young people, indigenous groups and heavy drinkers) are more responsive to price.

Alcohol floor price: The Australian National Preventive Health Agency has made an economically convincing case that reforming the wine equalisation tax (WET) must come before introducing minimum price regimes. A view supported by brewers, distillers and two of Australia’s largest wine corporations.

Alcohol taxation benefit cost analysis: The research is clear that alcohol taxation reform is justified. 85% of Australians will be better off as a consequence. Access Economics’ analysis has been repudiated and the $20 billion a year cost estimate of alcohol’s “harm to others” confirmed.

Rational thinking: This is not a moral case. There are social, health and economic arguments that fully justify acting to reduce the more than $10 billion a year cost to government. These are tangible alcohol-related police, justice and health care costs that far exceed the $6 billion of alcohol tax collected each year.

Thorn and Jones’ article is in response to Bernard Keane’s piece two days previously decrying preventive health measures as attempts by “taxpayer-funded elites to crack down on what they disapprove of.”


Australian electricity prices (still!) low by OECD standards

Keith Orchison on Tuesday wrote about the little-reported fact that Australian electricity prices, despite having risen 50% in the last five years – see the draft Productivity Commission report into Electricity Network Regulatory Frameworks for more on that – are still amongst the lowest in the OECD (on a PPP basis).

That information comes from the Bureau of Resources and Energy Economics via the Department of Resources, Energy and Tourism, which Senator Xenophon’s quizzed on September 25th in the Senate Select Committee on Electricity Prices about whether Australians were paying above OECD rates for electricity. Here is DRET’s response [PDF], from which I excerpt the following answer and graphs.

Using a PPP measure, residential electricity prices in Australia averaged 12.66 USc PPP/kWh in 2010 and 14.20 USc PPP/kWh in 2011. Using this measure, Australian prices are well below the OECD average in 2010 and 2011.

Graphs after the jump.

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Australian Carbon Demand in 2015-16

Updated on Monday, October 15, 2012 at 23:46 by Registered CommenterMCJ

Updated on Thursday, October 25, 2012 at 16:29 by Registered CommenterMCJ

In the September issue of Point Carbon’s Carbon Market Australia-New Zealand newsletter,  Cecile Langevin writes that

[Point Carbon] expect[s] the emitters covered in Australia’s emissions market will have 57 million fewer permits than they need in the year 2015-2016


the market price will be set by the international cost of U.N. Clean Development Mechanism (CDM) credits for the first two years, and then by EU Allowances (EUAs) the last three years of this decade.

Based on my rough calculations (below), the Australian market should demand 240-245 MtCO2-e in 2015-16, and the government’s (official) projections are even higher, so I’m struggling to reconcile that with Point Carbon’s 57 million estimate.

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Why Drop the Price Floor? Taking a Gamble on the EU

Updated on Wednesday, August 29, 2012 at 14:28 by Registered CommenterMCJ

Updated on Thursday, August 30, 2012 at 16:27 by Registered CommenterMCJ

I couldn’t make much at first of today’s announcement by Greg Combet, Minister for Climate Change and Energy Efficiency, that Australia was going to link its ETS with the EU ETS, and oh, by the way, we’re dropping the price floor.

That Australia and the EU will link their schemes good news, but it’s an expected development. Dropping the price floor, on the hand, had been speculated about (notably by the AFR; well done, Marcus Priest), wasn’t really part of the original plan.

As I wrote back in May, a price floor has some good things going for it, despite being technically challenging, and as it’s only regulation the government has the numbers to pass it even with Rob Oakeshott’s opposition. So my initial reaction was that the floor price had been put in the “too hard” basket and the ETS linkage was just used to hide the announcement somewhat.

I’ve since heard, however, that dropping the price floor was a condition of the EU agreeing to link the schemes. This makes more sense.

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The Nub of the Houston Report

Updated on Tuesday, August 14, 2012 at 19:51 by Registered CommenterMCJ

Updated on Tuesday, August 14, 2012 at 20:46 by Registered CommenterMCJ

Updated on Sunday, August 19, 2012 at 13:57 by Registered CommenterMCJ

I’m far from an expert on asylum seekers, and am still trying to wrap my head around all the stuff in the Report of the Expert Panel on Asylum Seekers (the ‘Houston Report’). Here’s the nub of the matter, though, as far as I understand it – this is essentially thinking out loud, so please do correct me if I’m wrong.

Problem: Asylum seekers are risking, and losing their lives coming to Australia by boat – as ‘irregular maritime arrivals (IMAs) – rather than waiting to be processed in transition countries.

Cause: Asylum seekers believe (rightly?) that they and their family members will be accepted as refugees in Australia more quickly than if they went through the ‘proper’ channels.

Proposed solution: IMAs should not get any advantages over asylum seekers coming to Australia through approved channels, so they will instead be taken and processed somewhere else, with no chance of arriving in Australia more rapidly than if they’d used the proper channels

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A Comment on the Political Discussion of Electricity Regulations

With her speech to the the Energy Policy Institute of Australia on Tuesday, the Prime Minister Julia Gillard has moved (or at least expanded) the discussion of electricity regulations from the roundtable meetings and conferences of industry, academia, and government to the political arena. Hurrah..?

A few points:

Are there problems with dividend policy, reliability standards, and peak demand? Yes.

Have the incentives in the existing regulations led some states to act in a manner that has unnecessarily raised prices for consumers (and thus led to increased profits for the states)? Very probably.

Has this been going on for several years, including under Labor governments? Yes – but so what?

Why shouldn’t we fix these problems now, regardless of why they’ve been raised?

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The Effect of the Carbon Price on Electricity Prices

Updated on Friday, September 13, 2013 at 18:11 by Registered CommenterMCJ

Updated on Sunday, November 3, 2013 at 22:39 by Registered CommenterMCJ

In an otherwise good article, Peter Martin today wrote that

[the TD Securities Melbourne Institute price index] reports a jump in electricity prices of 14.9 per cent and a jump in household gas prices of 10.3 per cent, almost all of which would have been due to the carbon tax. [emphasis mine]

This is incorrect, and, unfortunately, he is not the first journalist to make this mistaken claim. Evidence to the contrary be found in, for example, the reports from the relevant authorities in states that regulate their electricity prices:


New South Wales

IPART’s “Final Report – Changes in regulated electricity retail prices from 1 July 2012

Figure 1-1 Drivers of increase in average regulated retail electricity prices on 1 July 2012, across NSW (nominal, %)

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