That article is mostly about unilateral vs multilateral action. It does not give a view favouring direct intervention over price signals. In fact, it agrees with me on the issue:

For its part, Treasury is rightly concerned about economic inefficiencies produced by the mish-mash of federal and state-based abatement measures like the Mandatory Renewable Energy Target (MRET), Generator Efficiency Standards, NSW Greenhouse Gas Reduction Scheme, the Queensland 13 per cent gas scheme and others. Treasury is keen to sweep them all aside to level the national playing field.

Nowhere in the article does it say that government mandates are better for the economy than price signals. It is a mish-mash of 'concerns', but the only time it does give an opinion, it is against government mandates. You need to work on your critical reading. 'IF ET turns out to be a white elephant' is not the same as saying it will be a white elephant.

Most of the article has nothing to do with the question at hand and the issues raised would apply equally well to pricing mechanisms and direct mandates.

pjb05 wrote on Jun 4^th, 2008 at 5:09pm:


Renewable technology has already been in place for many years in the form of thermal solar generation in California for example, where thermal solar has the same cost per unit (or possibly lower now) than natural gas derived energy generation.  With coal at over $200 US per tonne, the cost differential will continue to reduce, and the viability of clean coal is looking much less likely.  

It's clean coal that's 'out there'. That is totally unproven blue sky territory if ever I saw it. We don't know if it's going to work.

Here's an interesting link:

"By 2015, concentrating solar power will be cheaper than carbon capture and storage coal-fired power. This is very important. Power plants take a long to time to plan and build. A new power plant proposed today would be lucky to get on line by 2011. Given that few new coal-fired power plants are expected in Australia until about 2015-2020, the earliest time in which still untested carbon capture and storage might be available, so called 'clean coal' will be priced out of the market by cheaper solar."

http://www.trec.net.au/content/costCSP.html

The prices would be based on the current price of electricity from that method (if it is already running), the price trends, etc. If it is a fossil fuel based system, it would include projected price rises due to the fuel running out. For clean coal, a premium would be added for the cost of burying the CO2, and some value taken off for the lower emissions.

IGCC is coal gasification.

http://www.tampaelectric.com/news/powerstation/polk/IGCC/

Yes I did say that. Not every blogger is an economist though. Obviously when I said economists I did not mean every economic commentator, as there are plenty of those with no understanding of economics at all.

Check their 'about us' page:

http://www.thenewcity.info/about_us.htm

We are longtime Labor Party members who believe the urban progressive-left has turned its back on ordinary working people: the 70 per cent of the workforce who hold blue-collar and routine white-collar ‘jobs’, as distinct from the 30 per cent who enjoy professional ‘careers’.

While one of us has worked for Labor politicians, and both of us are past or present local branch office-holders, we do not depend on any branch of the labour movement for our living, so we are free to speak our minds. We have diverse private and public sector work histories: currently one of us is a bureaucrat and one a lawyer.

An example of one of the consensus statements:

http://www.ozpolitic.com/green-tax-shift/economics-hopeful-science.html

Obviously we know how to pump CO2 underground. I think it's a technique already used in oil mining. It's making sure it stays there and doing it on a large scale in a cost feasible manner that is unproven.

Also do you think that governments will scrap their existing coal fire power stations

No. Once you have a station built, the marginal price of electricity from it is very low. In fact, Australia is still building more coal fired plants. First you would stop building more. Then the natural decommissioning process would see a sufficiently rapid transition to alternatives to satisfy the IPCC recommendations. And of course, there is always the possibility of capturing some of their emissions as you point out.

Well yes, California does import electricity. I don't see how that's relevant.  The state of California would be the 8th biggest economy in the world, however they have a clean objective of converting 20% of their power generation to renewables by 2020.  

It's very relevant. It's just another example of the fact that wherever renewables have been tried they need massive back up from conventional sources of baseload power. When you say 20% renewables that is very misleading because that 20% is not there all the time. FD says the way around this is to reconstruct industry and society to work on variable power. No thanks - I have just been sitting in the cold and dark for two hours and unable to cook my dinner due to a power black out!

Do you think you could simply convert an existing Coal fired power station to a full-blown carbon capture plant? That sounds a bit naïve. Some of the research is being conducted in decommissioned power stations, but a  full scale CCS Power station would have to be built from the ground up.

There are plans on retro fitting them. You would start with a ground up version naturally and then move on to retro fitting as the technology is refined.

The main issue is not so much pumping the CO2 underground, but ensuring that the leakage rate is low enough to make it viable. That's where the real uncertainty lies, apart from the economic feasibility.

Leakage doesn't seem to be much of a problem, it's under a lot of pressure remember. Sure it comes with a cost - so does every other low emission technology. Being a major coal miner and exporter it would surely be in our interests to pursure the technology in case the world becomes carbon constrained.