The Productivity Commission primarily focused on the electricity generation industry.
An efficient carbon price in Australia might mean electricity is sold for $150 per xxxKWh while in another country it might be sold at $100 per xxxKWh to achieve the same emissions reductions (for the same amount of electricity).
I think they might be saying that this is because we generate our electricity from coal which is so cheap that even if they put the price up heaps we’d still buy electricity generated from coal rather than closing the coal-fired power station and using something else.
But if we were in New Zealand where they generate a lot of electricity from hydro and some from carbon fuels if there were multiple prices on electricity depending on its source we’d try to stop using the electricity from carbon fuels. Could we? We couldn’t simply transfer to hydro because there wouldn’t be enough of it. Its price would go up because of demand.
If we were in the Sahara Desert we might decide just to use solar and wind rather than imported coal which is more expensive.
But Australia has fantastic solar wind and wave resources.
It seems to keep coming back to the fact Australia has a lot of coal and it is cheap. So we keep using that rather than using anything else that we have a lot of.
It is like petrol. We love our cars SO much petrol prices would have to go up a hell of a lot to really reduce our driving.
How many of us seriously take into account electricity costs when deciding to buy an air-conditioner or TV or simply deciding to turn off power and adjust to the climate?
How many of us think about climate change and reducing global carbon emissions when talking about going on an overseas trip? The ultimate party-poop! We just don’t do it. We talk about our trip and that has excitement and status not shame because of the carbon emissions we are generating. We collude in delusions like ‘buying carbon offsets on airline tickets’. You have to be kidding.