Labor’s 50% RET: Rocketing Power Prices Bring Guaranteed Economic Destruction

Bill Shorten: ready to swing 50% RET wrecking ball.

 

Australia’s renewable energy policy is already a disaster. But Labor’s Bill Shorten promises total catastrophe with his National 50% RET.

In yesterday’s post, STT picked up on economic analysis put forward by Dr Brian Fisher, which provided a wake-up call to Australians.

The economic cost of current so-called ‘climate and energy policy’ is in the tens of billions, in terms of reduced growth, lower incomes and higher unemployment.

Should Bill Shorten snatch government come May, his Labor/Green Alliance will introduce a giant carbon tax (aka a mandated cap on carbon dioxide emissions) along with a 50% RET – ie the same policy that throttled South Australia and turned it into an international laughingstock.

On that scenario, the economic cost will be in the hundreds of $billions and the results from blue-collar workers (once championed by the ALP) will be an unmitigated disaster. Whole industries will disappear and with them tens of thousands of well-paid jobs.

Too timid to extricate itself from the current quagmire, the Liberal/National Coalition continues to faff around at the margins.

Coalition to add $1bn to climate fund
The Australian
Ben Packham
22 February 2019

The Coalition is returning to Tony Abbott’s climate change playbook, attacking Labor’s 45 per cent emissions reduction target as a “great big new tax” on wages and power prices, as it puts the finishing touches on a new direct action plan to fund tree-planting and soil-carbon improvements by farmers.

It’s understood the plan, being put together by Environment Minister Melissa Price, would ­involve a top-up of more than $1 billion to the government’s Emis­sions Reduction Fund, which has been depleted from an initial $2.5bn to about $226 million.

The funding boost for the key direct action measure will be used to blunt Labor’s claims to be the only party committed to tackling climate change, while offering practical benefits for farmers and regional communities.

It comes as a new climate change alliance between green groups, forestry and farm organisations ramps up pressure for an enhanced carbon-farming initiative under the ERF.

Greening Australia, the Australian Forestry Products Association, the Red Meat Advisory Council and Farmers for Climate Action met Agriculture Minister David Littleproud and senior Labor frontbenchers in Canberra this week urging extra support for farmers to cut carbon emissions.

Energy Minister Angus Taylor and Resources Minister Matt Canavan yesterday seized on new ­independent modelling showing Labor’s 45 per cent emissions-­reduction target would push up power prices by 50 per cent, cost workers $9000 a year in lower wages and wipe $472bn from the economy, saying the findings were “just common sense”.

“What Labor is doing is putting in another great big new tax on your power bills, on your job, to make it harder for businesses to operate in this country,” Senator Canavan said.

The modelling by former head of the Australian Bureau of Agriculture and Resource Economics Brian Fisher found the Coalition’s commitment to a 26-28 per cent emissions reduction would not be without economic pain, causing $70bn in cumulative economic losses by 2030 and a 2 per cent hit to real wage growth.

Mr Taylor said the government did not pretend cutting emissions was free.

“The Emissions Reduction Fund, a very successful program under this government, has costs attached to it. They are low costs,” he said.

The opposition environment spokes­man, Mark Butler, said Dr Fisher’s modelling was based on “pure speculation” of the impact of Labor’s climate change policies.

He said modelling by Reputex on Labor’s 45 per cent emissions-reduction target had shown it would cut wholesale power prices by 25 per cent, while driving job-creating investment in renewables. “Australians … are crying out for real, credible, well-designed ­climate and energy policies, and that is exactly what a Shorten Labor government will deliver,” Mr Butler said.

But Australian National University economist Warwick McKibbin endorsed Dr Fisher as “highly credible”, and said Dr ­Fisher’s numbers lined up with his own findings in a recent Brookings Institute study.

Mr Abbott attacked Labor’s carbon tax as a “great big tax on everything”, winning the 2013 election on a promise to scrap the policy.

Under the Abbott government’s direct action plan, financial incentives were provided through the ERF for businesses to cut carbon emissions. A review of the policy found about two-thirds of emissions reductions were as a ­result of avoided deforestation and changing the timing of indigenous savanna burning.

A State of the Forests Report released yesterday revealed Australia’s forest area was 134 million hectares, up by almost four million hectares over the past five years.
The Australian

Unwilling to tackle the elephant in the room – $60 billion worth of subsidies to wind and large-scale solar – the Liberal/National Coalition has already consigned Australians to the hollowing out of its remaining industrial sector. Energy hungry industries like aluminium smelting are now a rare and endangered species. Under Labor those industries will quickly become extinct, never to return.

The choice for voters this May is between death by a thousand cuts or one clean shot to the vitals.

Once upon a time, Labor fought for those industries and the jobs that came with them. Now, it’s ready to sacrifice them to hold off rabid Green candidates in inner-city seats. However, Labor’s hostility to the coal industry and coal-fired power may well cost them dearly in Queensland where, west of the Great Divide, coal remains King.

Richard Marles, a senior Labor MP last week reckoned it would be “a good thing” if the thermal coal sector collapsed, despite it being the nation’s No 1 export industry – collecting more than $60 billion worth of export revenues and injecting more than $25 billion into the Australian economy last year.

With ‘friends’ like that, what blue-collar worker really needs an enemy?

At the heart of Brian Fisher’s economic analysis is the social destruction of regions and whole communities, thrown under a bus by Australia’s suicidal energy policies.

Brian Fisher’s paper is available here: Economic consequences of some alternative Australian climate policies

Here’s Judith Sloan explaining what’s in store for Australians should Bill Shorten seize power in May.

The absurdly high cost to Australia of Shorten’s plan to save planet
The Australian
Judith Sloan
22 February 2019

Brian Fisher is no slouch when it comes to the modelling of ­eco­nomic impacts of emissions reducti­on targets.

For many years he was the executive director of the Aust­ralian Bureau of Agricultural and Resource Economics­.

He has also been a reviewer for the UN’s Intergovernmental Panel on Climate Change.

His economy-wide modelling of the impact of particular ­emissions reduction targets is extreme­ly timely.

He has looked at the government’s commitment to cut emissions by between 26 and 28 per cent by 2030 from the 2005 level, as well as Labor’s proposed target of 45 per cent and its renewable energy target of 50 per cent.

The long and short of the story is that there is no free lunch: both scenarios produce economic losses, it’s just that the economic losses of Labor’s policies are much larger.

Under the Coalition’s targeted cuts, there would be nearly 80,000 fewer jobs by 2030. Under Labor, that figure is close to 340,000.

Real wages drop in both cases, much more so under Labor’s target­s. The respective reductions are 2 per cent under the Coalition versus 8.5 per cent under Labor. Under the Coalition’s target, the wholesale electricity price is likely to be $93 per megawatt hour in 2030, compared with $128 per megawatt hour under Labor.

None of this should surprise anyone. These results are completely consistent with those previousl­y presented by the governme­nt agency, the Climate Change Authority. The greater the emissions cut, the greater the advers­e impact on GDP and jobs.

The key to understanding these results is to understand the margin­al abatement cost curve. This curve plots the economic costs as the required abatement rises: that is the emissions target.

The curve is upward-sloping and not linear. At a certain point — about a 30 per cent emissions reduction target — the costs explode, as all the low-hanging fruit of technology gains and efficiency improvements are exhausted.

Agriculture is particularly hard-hit because there is really no efficient or economic way of reducin­g emissions, especially of methane-producing livestock.

Under Labor’s plan there would be no aluminium smelters (or other heavy industry) left in the country, with the loss of associated high-paid jobs.

But replacing the output of these Australian smelters would likely be the output produced by the plants in western China.

And here’s something to think about: Australian coal-fired smelters produce about 8.5 tonnes of CO2 for every tonne of aluminium, whereas the Chinese plants produce 17 tonnes, because Chin­ese plants don’t use the best, patente­d technology.

And just in case someone mention­s the laughable “modelling’’ undertaken by the highly partisan Australia Institute — its conclusion is that Labor’s emissions targets would be economic­ally beneficial — it is only dealing with the National Electricity Market, it is based entirely on assumptions and there are no economy-wide effects taken into account.

In other words, it’s not worth the paper it is printed on.

Just in case you want to put Fisher’s modelling in the same catego­ry, let it be known that his work has been refereed by senior academics at Stanford University and will appear in due course in peer-reviewed journals.

The bottom line is this: cutting CO2 emissions is a costly exercise. It is disproportionately more costly the higher the emissions reductions target. Lower GDP, lower employment, lower real wages, higher electricity prices and significa­nt regional effects — these are the main outcomes.

Bearing in mind Australia can’t save the planet alone, it is worth considering these costs when decidi­ng on appropriate action.
The Australian

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. Reblogged this on ajmarciniak.

  2. There are many loud voices protesting the Adani mine, and the potential impact on the Black-throated Finch.

    Many of these voices will also vote Labor / Greens in the coming election.

    But how many of these voices will turn a blind eye to the bird fatalities caused by the global wind industry?

    Here is but one example.

    An inconvenient truth?

    Wind Energy and Wildlife Conservation White-Tailed Eagles (Haliaeetus albicilla) at the Smøla Wind-Power Plant, Central Norway, Lack Behavioral Flight Responses to Wind Turbines

    Quote…

    Evidence is increasing of bird mortality due to large-scale wind-energy development. Soaring raptors, such as the white-tailed eagle (Haliaeetus albicilla), have proven particularly vulnerable to collisions. In this study, we compared white-tailed eagle flight behavior both inside and outside of the Smøla windpower plant on coastal Central Norway. During the eagle breeding period (mid-Mar-end May 2008), we collected data on flight activity (directional flight, social behavior, and soaring) and flight altitude (below, within, and above the rotor-swept zone [RSZ]) at 12 vantage points; 6 within the wind-power plant and 6 outside (control area). We found that white-tailed eagles did not show any clear avoidance flight responses to the wind turbines. Hence, we found no significant differences in the total amount of flight activity within and outside the power-plant area. However, we found less flight activity among adults than among subadults within the power plant compared with the control area. We also found a slightly increased probability of flight activity in the RSZ within the power plant, which obviously may increase the risk of collision with wind turbines. Our findings may help explain the relatively high mortality rate of white-tailed eagles in the windpower- plant area and the recorded peak in eagle fatalities during the breeding season.

    Link below…

    https://www.researchgate.net/publication/255180255_Wind_Energy_and_Wildlife_Conservation_White-Tailed_Eagles_Haliaeetus_albicilla_at_the_Smola_Wind-Power_Plant_Central_Norway_Lack_Behavioral_Flight_Responses_to_Wind_Turbines

  3. Jackie Rovensky says:

    So, ‘The opposition environment spokes­man, Mark Butler, said Dr Fisher’s modelling was based on “pure speculation” of the impact of Labor’s climate change policies.’
    What else is THEIR position based on but speculation, what a load of old trollop they spit out and unfortunately too many greedily swallow it – including many in the media who see a return to a Labor Federal Government as a return of their power to influence policy to suit their own personal ends, not reporting facts but ideology.
    We do need the Liberals to start standing up to the media and shouting load that they are the current Government NOT Labor and as such the media are responsible to honestly report on their policies not spit out Labors sour mouthed utterance’s.
    We need more of the honest media to speak out loudly and point out the fact that Labors policy has been judged by independent research (Dr Fishers) which is and is continuing to be reviewed and appraised for its uncorrupted analysis.
    We need the honest media to he shouting continually the failings of Labors past and proposed policies and we need them to report on areas of the Federal Governments policies which could be altered to enhance the lives of Australians, ones which shout loud about the offshoring of industries to a country where our high standards of emissions control are not followed.
    We need them to let Politicians know that Australia can continue and increase its heavy industry without destroying the world.
    We need to cancel the emissions target and in doing this there are ways the whole country can work towards better process to reduce emissions – if that’s what’s needed.
    Better ways that will not destroy this Nation’s future, ways that will not send more people onto the unemployment heap, leaving fewer and fewer people to fund the Nation with higher and higher taxes.
    We cannot continue to live as a First World Nation if we destroy everything we have achieved so far. We cannot continue to live the life we live if we allow our Politicians to play games with us, we need to stand up and be heard, we need them to know that they must – GET OUT of the Paris Agreement and start to work for Australia and Australians. We have done our bit now let others do theirs.

  4. Sarcastic Cynic says:

    I have my comfy chair, generator and popcorn ready. The coming political nightmare is going to be entertaining to watch as Labor takes charge. Currently it’s like a comical policy auction. Labor says “We bid 50%.” The Liberals counter with “Okay, then we bid 27%.” Say what?
    Is there anyone in the Liberal party who can see the insanity of their game plan? Any past and present Turnbull supporters should be booted off to the Greens where they belong.
    It’s going to be fun after the next election to watch Labor try and stop money and business leaving the country in the tried and true fashion of…less business…less tax revenue…raise taxes…less business…less tax revenue…government knows best and takes control of businesses…costs balloon…raise taxes…value of currency plummets…inflation eats into revenue…raise taxes…
    Seems like it is going to take a massive economic downturn for the bulk of Australians to realize there is no free lunch, solar and wind energy are neither free nor reliable, their public transport home from work in the afternoon does not run when their isn’t enough electricity for the grid, their superannuation investments have been squandered and plundered by banks and other insiders, and they have trouble getting food on the table when electricity supplies are intermittent. Such is life.

  5. Thanks SOG, great clip of lightness in these dark times!

  6. Terry Conn says:

    Day after day, week after week, month after month, year after year STT holds the wind industry ( and renewables generally) to account with facts based analysis together with respected opinion pieces from informed individuals in respect to efficacy, price, environmental destruction, destruction of individuals and destruction of industry – there were individuals within the Coalition who stood up and attempted to do the same thing, but now they are mute and committed to the status quo of Malcolm Turnbull’s labor lite policies. To me, this acquiescence by the Coalition in policies they know are wrong is worse than the fantasy fuelled folly of their deluded opponents – many of my acquaintances feel the same way on this issue and certainly cannot bring themselves to vote for them as a result, and why should they, the informed electorate has no stomach for seeing their country destroyed by gutless pandering to a ‘fad’. If STT can consistently and correctly point out to the public the reality of ‘a wind powered future’ why can’t the huge resources of the Liberals and Nationals do the same!

  7. Son of a goat says:

    A hearty congratulations to the team at STT’s as they pass through a milestone of 3 million hits on their blog, without the effort of people such as you, who knows how much deeper Australia would have entrenched itself in this renewable energy quagmire. I’m positive the next 3 million will be in a fraction of the time.

    As I drove my tractor today and listened to “their ABC”, and the Liberals half arsed policy announcement and then a chorus of condemnation from the likes of Butler, Shorten, Yoda Yates etc. I just kept hearing the name Tony Abbott.

    Them zealots are playing with my mind,I felt like the poor bastard in the car in the cult movie “Super Trooper”.

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