Carbon pricing is all too hard when the economy is the way it is. That is something Obama has found out the hard way. All people see it what affects them directly and at this time in the United States this is stability and jobs. So carbon trading takes a back seat. In Australia amazingly the same thing may happen using America as an excuse for sitting back and doing nothing. Still solar in Western Australia will continue with its strong momentum while we still have up front RECS discounts as well as a decent feed-in tariff. Get it while you can!
When Julia Gillard and Hillary Clinton announced they wanted to ”make solar power competitive with conventional power sources” within five years, they left out one important detail.
Their goal was based on solar being competitive with coal-fired power after a carbon price had been imposed.
When you think about it this is obvious – if solar power could provide electricity as cheaply as coal-fired power without putting a cost on the emissions from coal, then we wouldn’t need to impose that cost. The problem would be solved. We could forget the whole carbon price thing, because the only reason to have one is to give a leg-up to more expensive, low-emission sources of power.
But according to the executive director of the Australian Solar Institute, Mark Twidell – who will be managing the $50 million the federal government has stumped up for the initiative – cost-competitive solar without a carbon price sounds too good to be true because it is too good to be true.
”Solar is getting cheaper but the prediction that it could enter the market as a competitive alternative in 2015 is based on the assumption that conventional forms of power will be also more expensive by then for a number of reasons, and one important reason would be a carbon price,” he said.
The office of Resources Minister Martin Ferguson was unable to say what carbon price assumptions lay behind the big US-Australian solar announcement or on what basis the prediction of competitiveness within five years was made.
Whatever the assumed carbon price is in the calculation, the obvious problem is that neither US Secretary of State Hillary Clinton nor Prime Minister Julia Gillard has a carbon price in place yet.
US President Barack Obama has acknowledged the results of the midterm elections mean he is unlikely to get his cap-and-trade scheme through, certainly not this term. Gillard’s cross-party climate committee meets for only the second time tomorrow, so she has a way to go, too.
Politicians know that reducing greenhouse emissions involves two calculations – what changes to make and how to finance them.
The ”how” always involves the cost, which is why they often dwell on the ”what”. What about solar, they say? What about nuclear?
But the gap between the price of coal and solar, or coal and nuclear, or coal and any other power source, has to be bridged by a cost on the emissions from coal-fired power, or by big government subsidies for the alternatives, or by forcing the generators to pay the price gap and then pass it on to consumers. Whichever way, it can’t just be ignored.