A carbonless economy comes at too high a price

Bookmark and Share Economics & Deregulation, Energy and Climate Change | Alan Moran
Herald Sun 30th May, 2014

Economists estimate that if increased carbon dioxide emissions raise global temperatures by a degree or two over the next century, world income might be 1 or 2 per cent lower than it would otherwise be.

In the context of overall income doubling over the same period that's tiny, especially since the costs do not account for the massive disruption in moving to a carbonless economy.

For electricity alone, Australia's energy taxes and regulations increase bills by 25 per cent.

Labor and the Greens want to see emissions falling to 20 per cent of their current levels.

This could only be met by blasting our living standards to below those of our great grandparents.

Even then, meaningful emission reductions would require the rest of the world to adopt similar measures.

The fact is that cheap energy is the key to modern living standards.

Without this everything from the ABC to zucchinis would be as unattainable now as they were 200 years ago.

Terry McCrann correctly pointed out that removing energy taxes and renewable requirements on electricity is more important to the economy than passing the Commonwealth Budget.

This week Victoria moved in the wrong direction when Energy Minister Russell Northe spinelessly surrendered to green alarmism by banning gas drilling.

Last week, however, he took a positive step by closing Victoria's Energy Efficiency Target (VEET).

Abandoning the scheme saves Victorians $700 million over the next 15 years and reduces household electricity bills by $50 a year.

The VEET scheme was introduced by the Labor Government which idiotically claimed that without it Victoria would obtain insufficient industry development.

One spin-off, a taxpayer investment in a windmill blade factory, was to take the world by storm.

Like all such Pollyanna projects dreamt up by wide-eyed politicians, it closed after a few months. Since then another $140 million has been wasted on pie-in-the sky low emission proposals under the state's grandly but inaccurately named Energy Technology Innovation Strategy.

The VEET also helped to attract $2 billion investment in hopelessly uneconomic renewable energy which costs three times its worth in electricity production.

Victoria is following the Commonwealth in lightening the regulatory load on electricity.

As well as repealing the carbon tax and reviewing the damaging Renewable Energy Target, Canberra has cut $5 billion in carbon-reducing subsidies.

This entails dismantling the Australian Renewable Energy Administration (ARENA), the Clean Energy Finance Corporation and monies spent on chasing the mirage of carbon capture and storage for coal.

However, in setting up these bodies, the Gillard/Milne government sought to make them immune from any future government's attempts to curb their wasteful spending.

And they ensured the agencies were led by green zealots, supported by over-remunerated public servants - the Clean Energy regulator gets $486,000 a year and the head of ARENA $358,000.

Government measures to reduce carbon dioxide emissions have proved costly to the economy and the consumer.

The process of dismantling them has commenced but ALP obstructiveness will make reform difficult.