This week, the lower house of Parliament approved Australia's controversial carbon tax and the 18 Bills that are part of Labor's climate change policies.
Australia's industrial leaders and energy experts generally agree that carbon pricing will cause much financial pain with little environmental gain. And domestic energy consumers, already hit with surging electricity prices, face the future with deep anxiety.
The four years of stormy debate that preceded this vote have been messy. It has been lacking in both informed realism and sound science. The originally proposed carbon pollution reduction scheme, which incorporated an emissions-trading scheme, had already been defeated in Federal Parliament in August and December of 2009. Almost as if to confuse the electorate, laws for a renewable energy target, known as RET, were passed in August 2009. These require large industrial users and electricity retailers to buy at least 20per cent of their electricity from ''renewable'' energy sources by 2020.
The RET is essentially another tax mandating the purchase of renewable energy certificates in either Australia or overseas. It necessitates the use of highly costly and technically inefficient energy forms such as wind, solar, wave, tide and geothermal. This increases the operational cost of Australia's manufacturing and value-adding industries and inflates overall living costs. An even worse aspect of the RET is that it provides fiscal rewards to politically selected industries at taxpayers' expense.
Recent Federal Government ''educational advertising'' relating to the ''clean energy pathway'' for Australia is both technically deceptive and environmentally naive. It contains all the seductive and soothing semantics of green pseudo-science but avoids any reference to the severe technical limits and enormous costs associated with dilute and discontinuous energy sources. Little ''investment certainty'' can arise from this exercise. It is indeed certain that energy prices will surge. It is also obvious that a new service industry based on environmental lawyers and regulators will flourish as they seek to drive Australia's energy industry into politically approved channels.
The Treasury's present modelling of the nation's electricity portfolio under the carbon pricing policy scenario in 2050 is fanciful to say the least. International energy experts have described it as ''wishful thinking''. The approximate share of total generation is made up as follows: renewables 41per cent, coal (with no carbon capture and sequestration) 15.5per cent and gas and oil 21per cent. The breakdown of the ''renewables'' is as follows: biomass 1per cent, solar 4per cent, hydro 5per cent, wind 13per cent and geothermal 18per cent. Consider the risks associated with such a simulation, when it's well known that commercial carbon capture and sequestration technology still does not exist and geothermal technology is unproven. Consider the fact that, when Treasury modelled the global energy scenario for 2050, it arrived at a contribution of about 30per cent to the clean-energy portfolio by nuclear power. This is a conservative figure which is greatly exceeded by the International Energy Agency's predictions. It is indeed a sad fact that of the world's top 25 economies that will attend the next United Nations climate conference in South Africa, at the end of this year, only Australia has excluded nuclear power from its electricity-generating capacity. And from the South-East Asia region, only New Zealand and Brunei are ''nuclear deniers''.
It would be sad if Australia followed the Spanish path. In that country, the politics of protectionism and subsidisation of the ''renewable'' energy industry has helped to produce 19 per cent unemployment and now threatens to break down the power industry. It has been estimated that each ''green job'' is costing Spanish taxpayers between 540,000 and 1million euros ($A733,000 to $A1.35million). Every ''green job'' leads to the loss of 2.2ordinary positions through the misallocation of capital. And worse, despite a huge $A60billion subsidy to the solar industry, it is still a minor component of the energy mix and leaves Spain unable to comply with its ratified commitment to the Kyoto Protocol. Such issues are never reported in Australia. Our politicians invariably return from their overseas ''fact-finding'' trips with glowing reports of a ''solar-thermal'' plant in Spain or the United States, or wind turbines in China. They either do not understand the severe limits of such technologies or refuse to divulge their true findings.
Our own calculations indicate that, at a carbon price of $23 a tonne, nuclear power is already competitive with coal in Australia. It is also clear that the Gillard Government's ''clean-energy'' technology will inevitably drive the carbon price towards hundreds of dollars. However, the gradual replacement of chemical combustion with nuclear fission will eventually decrease the carbon price and reduce the number of renewable energy certificates needed to be bought in Australia or overseas. Such a policy would ensure that both energy security and real environmental benefits would be made available to the Australian taxpayer. Australia's emission reduction targets will not be achieved either with Gillard's ''clean coal'' and ''renewable'' policy or with Opposition Leader Tony Abbott's ''carbon storage in the soil'' plus ''20 million trees'' planting scheme. A 5 to 20per cent emissions reduction, together with energy security for the nation, is certainly possible with the commissioning and operation of five 1GW(e) nuclear power stations by 2020.
By 2050, 25GW(e) of nuclear power will be needed to support a population of more than 36million and an energy demand of about 100GW(e). This will facilitate the supply of electrical energy at a generating cost under 3cper kilowatt hour. As well, it will save Australia's remaining manufacturing, value-adding and agricultural industries and prevent the nation from becoming a mere ''quarry to planet Earth''.
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