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Coalition policy looks like fairyland economics too

Posted By Joanne Nova On May 25, 2011 @ 8:31 pm In Big-Government,Global Warming | Comments Disabled

Greg HuntGreg Hunt tried to explain the Coalition policy on coal power stations on the 7:30 Report last night. It wasn’t a good look. This is what happens when they deny the science telling us that there is no need to reduce CO2. That’s a harsh criticism, because they are closer to reality than the ALP, but ultimately, as long as they say “we need to reduce CO2 by 2020″, and “the science is settled” they are stuck trying to move the immovable mountain.

Chris Uhlmann does a good job trying to fill in the gaps in the reasoning, and Greg Hunt looks silly denying the obvious. Coal provides the cheapest source of energy around, so if we replace it with anything else there will be extra costs. Hunt keeps waving the magic fairyland contradictory combination of “we’ll only use the cheapest alternative” and “we won’t do anything to raise costs.”

Chris UhlmannThe real problem here is that the Coalition are not free to speak about a science theory. Each time they step slightly outside the politically-correct-line they are bullied and derided, which would be fine if it was just by the Greens, but isn’t fine when it includes most of the media too.

It’s difficult for the Coalition — before they can speak freely, they have to conquer the bullying and name-calling, and shame those who use kindergarten tactics to silence debate. Strangely, that’s much harder than understanding climate science.

Until then, we get these kinds of bizarre exchanges where Hunt appears to say there is a free lunch and the Coalition can find it.

Edited Transcript from the ABC site:

CHRIS UHLMANN: If we could go to your direct action plan. Now, the biggest carbon-emitting power stations in Australia are the coal-fired plants in Victoria.

GREG HUNT: Correct.

CHRIS UHLMANN: What would your plan do about this?

GREG HUNT: Well we actually have a plan which could potentially deal with some of those power stations which only last week said they would continue producing in just the same way under the Government’s carbon tax until way into the 2030s.

Our approach would be – potentially – to provide them with incentives, such as the Lorne Power Station, to help it from transition from coal to gas to save so million tonnes a year. Under the Government’s carbon tax, electricity prices will skyrocket but they’ll be passed through to the consumer.

CHRIS UHLMANN: Sure, but would you agree that brown and coal-fired power stations are much cheaper than gas stations, aren’t they?

GREG HUNT: Well, they are.

CHRIS UHLMANN: And so who pays the price difference?

GREG HUNT: We also have a mechanism built in to ensure there are no price differences, no impact on electricity prices as a result.

CHRIS UHLMANN: How do you move from $30 a tonne to $45 a tonne, which is the cost of gas?

GREG HUNT: What we would do is help in the transition process from coal to gas by providing an incentive but it’s only if this is the lowest cost way of reducing emissions. There’s on approach under the Government’s system…

CHRIS UHLMANN: But, sorry, do you say..

GREG HUNT: ..which would allow that, but electricity prices would skyrocket. No change in electricity prices under us.

CHRIS UHLMANN: How could there be in change in electricity prices when the source of power is going up so much? Would you be paying the difference or would that be taxpayers money?

GREG HUNT: We have consciously built into the model that we’ve got, the fact that we would ensure that unless costs remain the same, we would find other means of reducing emissions. But we have spoken with the companies in question, such as the CEO of TRUenergy, which owns the Lorne Power Station, and we can make that transition. The Government cannot. It is a practical example…

CHRIS UHLMANN: And TRUenergy said this can’t be viable unless electricity prices go up 20 per cent. That’s what you’re proposing, isn’t it? A rise in the cost of electricity – either paid for by the consumers or paid for by Government, which is taxpayers’ money.

So which is it? Where is the cost picked up?

GREG HUNT: Sure. There will be no increase in electricity prices to consumers under us. There will be under the carbon-

CHRIS UHLMANN: Who pays?

GREG HUNT: There will be under the carbon tax, and we’ll provide incentives to reduce emissions and ensure that electricity prices do not change.

CHRIS UHLMANN: Greg Hunt, who pays?

… [snip it gets repetitive ]

CHRIS UHLMANN: So where does the money come from? Or you’re spending the money that Joe Hockey is saving.

GREG HUNT: No, we’re making savings of $50 billion. Within that was any new Coalition expenditure proposals, which includes the $3.2 billion for this, and on top of that there was an $11 billion addition to the surplus.

CHRIS UHLMANN: And $3.2 billion you are saying now will cover the cost of that increased gas price – for how long?

GREG HUNT: We were looking at a period out to 2020…

The video is at the same link.

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