Wednesday, November 22, 2006

Australia's nuclear future?

Dr Switkowski says there is “no case” for nuclear power without some sort of carbon tax. The Prime Minister says such a tax would mean that “Australians would pay more for electricity while jobs and investment would be exported offshore”.

Or that’s what he said three months ago. Since then his language has subtly shifted.

He is not alone. Dr Switkowski told the Press Club yesterday that opinions are shifting quickly. The former nuclear physicist said that as recently as a year ago he felt intense community opposition to nuclear power. Now he says feelings are more moderate.

And so too is John Howard’s desire to protect the coal industry. Asked in Vietnam yesterday for his view about a carbon tax the Prime Minister said: “Well at the moment dirty coal is cheaper than nuclear power… but I thought everybody was in favour of reducing greenhouse gas emissions and if you’re going to reduce greenhouse gas emissions, even things like clean coal technology will make the use of coal a bit more expensive.”

Mr Howard may still be against “ a carbon tax” but he appears to no longer be against imposing a cost on Australia’s coal-fired power industry in order to reduce emissions of carbon...

Free-marketeers such as the ANU’s Professor Warwick McKibbin, a member of the Switkowski Nuclear Review would prefer that coal and gas-fuelled power stations be made to pay for the carbon they belch out by buying permits.

(The free-market bit is that they would be allowed to buy and sell the permits so that firms that cut their carbon emissions early and have spare permits can sell them at a profit.)

Dr Switkowski said yesterday that the permits would need to be priced high enough to force up the cost of coal and gas-fired power by 20 to 50 per cent.

John Howard appears to be talking about a requirement for coal-fired power stations to use clean coal technology, which would “make the use of coal a bit more expensive.”

As it happens clean coal technology (which is very difficult to install, but easy to introduce when a power station is replaced) is quite a bit more expensive – it can double the cost of power produced from coal according to CSIRO calculations.

John Howard’s approach may not be as different from Ziggy Switkowski’s as it seems.

Both would push up the price of coal-fired power by imposing big costs on those plants, and both could do it enough to meet Australia’s greenhouse obligations and make nuclear power financially attractive.

Mr Howard would do it by requiring Australia’s existing power stations to install an expensive technology, Dr Switkowski would do it by allowing them to trade expensive permits.

The two aren’t that far apart at all.