16/06/2017

Voters Prefer Low Emissions Target To Carbon Trading – Guardian Essential Poll

The Guardian

Thirty-six per cent of voters in the Guardian Essential Poll said they didn't know whether a low emissions target or a carbon trading scheme was best. Photograph: Bloomberg via Getty Images
Australian voters would back a new low emissions target over emissions trading as a policy to reduce carbon pollution, but are not sure about including "clean" coal in the mix, according to the latest Guardian Essential poll.
The latest survey of 1,785 voters, which follows Tuesday night's three-hour Coalition party room meeting in which significant concerns were ventilated about the Finkel review, also taps significant community concerns about the rising threat of terrorism in Australia.
Seventy-four per cent of the sample said the threat level in Australia had increased over the past few years, and 46% believe the Turnbull government should be spending more on counter-terrorism measures.
A new clean energy target is the centrepiece of the review of the national electricity market by Australia's chief scientist, Alan Finkel, handed to the prime minister and the state premiers on Friday.
While Coalition MPs spent Tuesday night arguing about the impact of the clean energy target on power prices in the biggest internal Coalition stoush about climate policy since 2009 – and the energy minister, Josh Frydenberg, said afterwards it was too soon to say whether the Coalition would ultimately adopt the policy – Australian voters seem sanguine about the idea.
Forty-five per cent of the Guardian Essential sample preferred a low emissions target to carbon trading, while 20% endorsed an emissions intensity scheme. Thirty-six per cent said they didn't know which option was best.
The voters most likely to prefer a low emissions target were people aged 65+ (51%), Liberal/National voters (51%) and high-income earners. Greens voters preferred carbon trading to a target.
Government conservatives, egged on by the Canberra-based lobby group representing the resources industry, are pushing to have high-efficiency coal included the new scheme, but the new poll suggests voters aren't sure.

The Finkel review - Politics over science

Asked whether they thought coal generation with 100% capture and storage should be considered a "low emission" energy source under the proposed low emissions target, 27% of the sample agreed, 29% said no, and 44% of the sample weren't sure.
In an interview with Guardian Australia this week, Finkel said it would be "surprising" if governments went on to legislate a clean energy target that "incentivised" new coal-fired power stations.
He also pointed out that modelling commissioned as part of the review did not predict any construction of new coal-fired power. "Under the modelling, none came in," the chief scientist said.
But with internal pressure mounting from conservatives, the prime minister used question time to insist Finkel had proposed a clean energy target which "does not penalise coal, [and] does not prohibit the construction of a coal-fired power station or indeed a gas-fired power station".
Turnbull said: "What he seeks to do there is to provide incentives for lower emission technologies including, but not exclusively, renewables."
Frydenberg repeated that sentiment after the internal debate at special party room meeting. "Dr Finkel has made it very clear he is not putting in place any prohibitions on coal or any form of generation capacity".
"He is putting in place incentives for lower emission generation. It is not a price on carbon or a tax on coal. Indeed, it has similarities to what John Howard put forward back in 2007".
Voters most likely to think coal should be in the mix were Coalition supporters (36%), men (33%) and older people. People most likely to have the contrary view were Greens voters (55%), people under 24 (37%), and South Australians (35%), with that state having a high proportion of wind energy.
With the energy fight expected to drag on for many weeks as the government finalises its response to the Finkel review, this week's Guardian Essential poll has Labor still ahead of the Coalition in the national political contest on the two party preferred measure, 52% to 48%.
The gap between the major parties narrowed in the month following the May budget, but within the poll's margin of error, which is 3%. This week's two party preferred result was the same as last week.
The apparent narrowing of the gap between the major parties has come at a time when terrorism has been firmly back in the headlines, both domestically and internationally.
The survey asked voters whether they approved of the way Turnbull was handling the terror threat. Forty-seven per cent approved of the prime minister's handling of the issue, down 9% since October 2015, and 24% disapproved, up 7%.
The questions in 2015 were put to voters during the Turnbull honeymoon – shortly after he took the Liberal party leadership from Abbott.
Voters most likely to approve of Turnbull's handling of the issue were Liberal/National voters (68%) and people aged 65+ (61%). Men (51% approve) were also more likely to approve than women (45%).
Interestingly, the group most likely to disapprove of the prime minister's approach were voters signalling their intention to vote independent or other (38%), followed by Labor voters.
Forty-six per cent thought the government should be spending more on anti-terrorism measures, which is up 7% from when the question was previously asked in March 2015, and 9% thought the government should be spending less (down 3%).
Voters were asked about the balance between security and personal liberty. They were asked whether they thought there should be more restrictions on rights and freedom for some people so there could be more security for others – or whether they thought laws already went too far in restricting freedom.
Fifty-four per cent thought there should be more restrictions on rights and freedom in an attempt to combat terrorism. Twelve per cent thought current restrictions went too far, and 19% thought they struck the right balance.
People more inclined to support restrictions were older voters (79%), "other" party and independent voters (68%) and Liberal/National voters (66%).
The cohort most likely to think the right balance is being struck were Greens voters (36%) and young people (29%).
Concern from voters about the threat level was roughly the same as when questions were previously asked eight months ago.
Voters most likely to think the terror threat had increased were older – 88% of 55-64 year olds, and 87% of over 65s – as well as Liberal/National voters (81%).

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World Coal Production Just Had Its Biggest Drop on Record

Bloomberg - Rakteem Katakey

  • Fossil fuel sees 'decisive break' from period of demand growth
  • Carbon emissions show little or no growth for third year: BP

The Coming Storm of Climate Change

It's the end of an era for coal.
Production of the fossil fuel dropped by a record amount in 2016, according to BP Plc's annual review of global energy trends.
China, the world's biggest energy consumer, burned the least coal in six years and use dropped in the U.S to a level last seen in the 1970s, the company's data show.
Coal, the most polluting fuel that was once the world's fastest growing energy source, has been a target of countries and companies alike as the world begins to work toward the goals of the Paris climate agreement.
Consumption is falling as the world's biggest energy companies promote cleaner-burning natural gas, China's economy evolves to focus more on services than heavy manufacturing and renewable energy like wind and solar becomes cheaper.


"The fortunes of coal appear to have taken a decisive break from the past," BP's Chief Economist Spencer Dale said at a briefing in London on Tuesday. The most important outcome of this "is carbon emissions, which saw little or no growth for a third consecutive year."
The shift away from coal in most of the world's major economies comes as U.S. President Donald Trump is seeking to revive the fuel, having promised during his election campaign to restore lost jobs in mining areas such as West Virginia.
Coal's decline has been driven largely by competition from cheap shale gas, prompting skepticism that the country's withdrawal from the Paris climate agreement will do much to halt the slide.
U.S. demand for coal fell by 33.4 million tons of oil equivalent last year to 358.4 million, the biggest decline in the world in absolute terms, BP data show.
Global consumption dropped 1.7 percent last year compared with an average 1.9 percent yearly increase from 2005 to 2015, according to BP. China, which accounted for about half of the coal burned in the world, used 1.6 percent less of the fuel, compared with an average 3.7 percent annual expansion in the 11 preceding years.
"At the heart of this shift are structural, long-term factors," Dale said. These include "the increasing availability and competitiveness of natural gas and renewable energy, combined with mounting government and societal pressure to shift away from coal towards cleaner, lower-carbon fuels."


Consumption of coal fell in every continent except Africa, the BP data show. Germany, Europe's biggest user, consumed 4.3 percent less coal. U.K. demand fell 52.5 percent, the biggest percentage decline among the world's major economies, according to BP's data.
In Asia, China's decline was partially offset by higher consumption in India and Indonesia, where the fuel is still so cheap and readily available that utilities prefer it over natural gas for electricity generation.
"Chinese hunger for energy is being tempered by moves to a more sustainable growth pathway and the rapid expansion of renewables, which spells even further trouble for coal in the years to come," Jonathan Marshall, an analyst at the London-based Energy and Climate Intelligence Unit, said by email.
Global carbon emissions, which grew at an annual average rate of about 2.5 percent in the 10 years to 2013, remained stagnant in the past three years, Dale said. While some of this reflects weaker economic growth, the majority reflects faster declines in "the average amount of carbon emitted per unit of GDP," he said.


Still, there needs to be a "significant fall" in emissions in order to meet the Paris climate goals, Dale said.
The world consumed 1.6 percent more oil last year, with India's use expanding 7.8 percent, or 325,000 barrels a day, and China's 3.3 percent, according to the data.
Demand from the Organization for Economic Cooperation and Development, a group of industrialized nations, grew 0.9 percent in 2016, compared with an average annual decline of 0.9 percent over the previous decade.

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Memo To Tony Abbott: A Clean Energy Target Will Extend Coal's Life

AFRBen Potter

Abbott and his followers seem determined to perpetuate the current energy policy uncertainty.
If Tony Abbott wants to preserve a role for coal power, he should embrace Alan Finkel's Clean Energy Target plan with both arms rather than declare war on it.
In fact, he should embrace the Emissions Intensity Scheme option - detested by hardline conservatives like Abbott so intensely that the Turnbull government abandoned it in December - because that is the policy option that preserves the largest role for existing coal plants out to 2050.
That's according to the modelling by energy consultants Jacobs Group (Australia) for the Finkel review of energy security.
Abbott and his followers seem determined to perpetuate the current energy policy uncertainty, under which the Renewable Energy Target tops out in 2020 (subsidies are available until 2030) and there is no other policy signal to help guide investment and meet our Paris emissions reduction goals.
Under business as usual, coal power falls to a fifth of total demand. Jacobs Group (Australia)

But Jacobs modelling clearly shows that coal would still be supplying a larger amount of power in 2050 under an Emissions Intensity Scheme (EIS) or a Clean Energy Target (CET) than it would be under the "business as usual" scenario.
Under business as usual, coal's share of grid electricity supply would fall from 137,000 gigawatt hours in 2020 to less than 50,000 GWh in 2050. By contrast, under the CET coal plants would still be pumping out 57,000 GWh by 2050, and under an EIS coal would still be supplying 61,000 GWh.

No-one wins from chaos
The result seems perverse. It comes about, according to Jacobs, because business as usual - essentially the suite of policies bequeathed to the nation by the shortlived Abbott Prime Ministership - is not good for plant owners or investors.
Uncertainty is highest, investment signals are muddy and coal plant owners have the least incentive to invest in the minimal upgrades and maintenance needed to prolong the lives and efficiency of their plant.
Under a Clean Energy Target, coal use would be higher than under business as usual. Jacobs Group (Australia)
Output and reliability fall, plants close earlier, and more costly gas generation is required to fill the gap, pushing prices for consumers and industry higher than if there were clearer investment signals under a CET or an EIS.
In short, no-one wins from chaos. Without continuing policy signals to encourage investment in wind and solar power, which increases supply and reduces wholesale prices because they have near zero marginal operating costs, retail prices are 7-10 per cent higher than they would be under a CET or an EIS. Industrial prices are more than 10 per cent higher under business as usual than under a CET or an EIS.

Coal is in decline
Old King Coal can bow out of the energy mix gracefully or disgracefully.
Coal would retain a larger role under an Emissions Intensity scheme than under business as usual or a Clean Energy Target. Jacobs Group (Australia)
The harsh reality for coal boosters like Abbott is that under any of these scenarios we are managing the decline of coal.
Total demand increases from about 200,000 GWh today to about 230,000 GWh in 2050. Coal's share of total demand falls from just more than two-thirds today to somewhere between a fifth and a quarter in 2050.
As Jacobs modelling shows, the withdrawal can be managed with optimal minimal plant upgrades and maintenance under CET/EIS policies, or the plant owners can do the bare minimum under business as usual, resulting in less efficiency, greater emissions, more unexpected failures and closures.
Hazelwood's closure in March - after just five months notice - is a good example. Owners Engie of France and Mitsui of Japan faced a $400 million bill - partly under pressure from Worksafe Victoria - to make the plant fit for use. They saw the writing on the wall and chose to close it.
Electricity prices are lowest under a Clean Energy Target, the Jacobs than under an Emissions Intensity Scheme or business as usual. Jacobs Group (Australia)
Coal plants are uneconomic
Abbott and some of his followers dismiss Finkel - and by implication Jacobs' modelling - as "magic pudding" economics, or something akin to snakeoil.
All modelling depends on assumptions, and all assumptions are open to challenge.
One of Jacobs' assumptions adds a 5 per cent risk premium to the cost of building new coal plants, on the grounds that it faces risks - stronger climate policies, carbon prices etc - that could curtail their lives early, before the investors or lenders have got their money back.
Coal plant has a much higher cost of capital than renewable or gas plant because of the risks. Jacobs Group (Australia)
Jacobs also assumes coal plant investors can borrow less than wind or gas plant investors, for the same reasons.
On this basis, Jacobs attributes a 14.9 per cent average cost of capital to coal pant, compared to just 8.1 per cent to gas plant and 7.1 per cent for renewable plant.
That helps to make coal plant uneconomic. Coal advocates are likely to seize on it as another reason to dismiss the modelling.
But it doesn't look all that unreasonable. No coal plants have been built in Australia for 10 years, partly because business now ascribes a carbon cost to new investments.

Clean coal is barely competitive
Jacobs' modelling doesn't include a carbon price. BHP Billiton assumes a carbon price of $US24 ($32) a tonne of carbon dioxide under current policies, and $US50 ($62) a tonne of CO2 under stronger policies aimed at limiting temperature increases to 2 degrees Celsius - the baseline Paris commitment.
That would add $22 to $43 a MWh to the $81/MWh price of power from an ultra-supercritical coal plant - the most efficient commercial plant - modelled by the Finkel Review.
The Finkel review finds new ultra-supercritical coal plant costs uncompetitive with wind even without a carbon price and even when some storage is added to a wind plant. They're barely competitive with large scale solar.
BHP applies a carbon price of $US24 ($A32) a tonne to new investments under current policies, rising to $US50 of stronger policies are implemented to limit temperature increases to 2 degrees Celsius. BHP Billiton
If anything, the risks are all on coal. It takes years to approve and build, adding to the risk. In the meantime, the cost of wind, solar and batteries is falling rapidly.
Finkel's findings on all-in costs look conservative. Other forecasters, such as Bloomberg New Energy Finance, find the cost of wind and solar even more competitive with coal than Finkel.
The latest wind farm deals confirm this. Origin Energy's sale of Stockyard Hill and AGL Energy's sale of Silverton wind farm included power purchase agreements at $52/MWh and $65/MWh respectively - less than new coal plant without a carbon price.

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