Fossil Fuels and the Carbon Tax

The carbon tax is seeking to do by indirect means that which is perceived to be unachievable by direct means. I would have preferred a more direct method to reduce carbon emissions.

Direct method? What direct method?

The point of the carbon tax is to reduce CO2 emissions caused by the burning of fossil fuels.  (Other sources tend to be homeostatic, or “neutral” in today’s parlance, over a long enough baseline.)  Taxing CO2 emissions will increase the price of power because the tax is passed on to consumers.  This is supposed to reduce fossil fuel use as consumers choose, on price alone, to move to renewable energy sources.  The problem is that, at present, there are no viable alternatives, not for the majority of consumers.

And, of course, the government introduced a means test for the solar panel subsidy, and also reduced grid return prices, so “wealthy” consumers (the only ones who could ever afford to do it anyway) are choosing not to on price alone.  There are some folks with a sufficiently masochistic siege mentality who go alternate no matter the cost — they aren’t normal consumers.

By “direct method” I mean this: stop digging it up.  Leave the fossil fuels in the ground.  If you don’t burn them, they don’t enter the atmosphere.

How, smarty pants?  Legislate that there is to be a 5% reduction every year.  The Commonwealth (federal government) actually owns all minerals (even though the States are responsible for all administration and revenue collection) it can simply say “no”, incrementally.  In 20 years we will reach zero.  This will result in gradual price rises, just like the carbon tax, but due to limited supply, rather than an arbitrary and poorly aimed tax.

A progressive reduction in the available fossil fuels will motivate the power industry to locate and invest in alternative energy, rather than keeping on doing what it has always done, and just passing along the tax to consumers. The carbon tax does not motivate innovation and change by the incumbents.  Only by actually taking the fossil fuels away will they be motivated to actually change.

To be clear: A 5% reduction in natural gas volume extracted, every year.  A 5% reduction in crude oil volume extracted, every year.  A 5% reduction in coal tonnage extracted, every year.  A 5% reduction coal seem gas volume extracted, every year.  A 5% reduction of every fossil fuel, every year.  Exports will fall, naturally, particularly when the permitted extraction level approaches and then falls below the needs of the local power industry incumbents.

To be clear: this also includes a 5% reduction on fossil fuel imports, every year.  This is essential so that the local power industry doesn’t just switch to more expensive imported fossil fuels, rather than invest in and switch to renewable energy sources.

Carbon Sequestration

Why can’t we just bury it again, after we use it? It has been suggested that investing in carbon sequestration technologies could offset the deleterious effects on CO2 emissions.  Firstly, no existing technique sequesters carbon at densities as high as in-the-ground fossil fuels — which makes them inadequate to the task.  The next best sequestration technique is planting trees (like that’s ever going to happen) and it isn’t at a high enough density to get us out of this hole.  And at some point some idiot will call them a “renewable” energy source and burn them, making trees neutral (aka pointless) at best.

The very best carbon sequestration technique is to leave the carbon where it lies.  Where is has been naturally sequestered for 150 million years, and often longer.  Stop digging it up.  A concept so simple that politicians cannot understand it.

Social Consequences

But what about the mining magnates, how will they sustain their corporate cocaine budgets?  They will invest their money in whatever keeps them filthy rich, of course.  You don’t seriously think they are in business for the benefit of their employees, do you?

What about all those poor miners who will be out of a job?  They will probably still be miners, but for iron ore, aluminium, nickel, and lots of other things, including “rare earth” minerals needed to make alternative and renewable power devices.  Or they may move into the emerging alternate and renewable power industries, which will likely be less highly automated than the mining industry, and thus actually employ more people.  The point is to do it gradually over 20 years, rather than 100% immediately, so that jobs and innovations and opportunities emerge progressively, allowing a smooth transition.

What about my car?!?  Consumers have been paying less than the true environmental price of their petrol for decades.  Eventually, these rising costs will change consumer behaviour.  Leaving the oil in the ground, and not importing any either, brings forward the day when we switch to hybrid and alternative energy cars, but that day is coming, no matter what we do.

Global Consequences

Wont this hurt Australia’s balance of trade?  If Australia gradually stops exporting coal, there will be a reduction of income, but there will also be a reduction of greenhouse gas emissions by other countries.  This is a good thing.  Plus, Australian industries have the motivation to invent new renewable energy technologies and products before the rest of the world, giving Australia new export opportunities.  The point is to do it gradually.

Australia haemorrhages about $30 billion per year in balance-of-trade, and it gets worse every year. Australia also exports far more minerals than just coal, and those minerals would not be restricted.  It is possible that the reduction in coal income will be just a drop in a the bucket.

Update:

The arithmetic and the politics of climate change, and the difficultly of leaving the carbon in the ground.

A government report: Most coal ‘must stay in ground’ to save climate: 7 News.  Climate Commission Reports.