Alan Kohler is upset that badly needed investment in electricity in Australia is being stalled due to uncertainty, caused in large part by the Tony Abbott "must revoke the carbon tax" policy.
I'm sure Kohler is not alone in this view. But where are the economists who feel this way? Are they just going to sit on their hands, or wait until an election is looming and then say that dismantling the governments carbon pricing scheme, and replacing it with Abbott's second rate "direct action" really doesn't make sense?
Anyway, here is Kohler's depressing conclusion:
If they're all thrown out, as promised, then the new minister will have to start the process all over again. By the way, the shadow minister is Ian Macfarlane, who came within a bee's willy of negotiating an emissions trading scheme in 2009 with the then minister, Penny Wong.
Presumably he no longer believes in that crazy stuff.
Anyway, aside from whatever carbon abatement costs are imposed by either political party (they both have the same reduction target of 5 per cent by 2020), electricity prices are already set to double by 2017 because of chronic under-investment in east coast transmission and distribution over previous decades.
This price increase cannot be avoided – it is already locked in. In fact, it will be greater than that if the 20 per cent renewable energy target is to be met because renewable generation is always further away, so that transmission costs more.
The only antidote to the huge, looming increase in the price of electricity, not to mention the possibility of brownouts caused by the lack of investment in base load power, including nuclear, is energy efficiency.
Unless urgent action is taken, the rising price of power will destroy manufacturing and retail businesses far more effectively than the internet and the currency, which has a tendency to go down as well as up.
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