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Australia resource minister backs energy carbon price
Source: Agencies |
September 21, 2010, Tuesday
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AUSTRALIA'S Resources and Energy Minister Martin Ferguson today backed a targeted price on carbon to underpin billions of dollars in new power plant investments and to prevent blackouts in the future.
Ferguson, in an interview with the Australian Financial Review newspaper, said there was a risk of large blackouts in 10 to 15 years because of the carbon price uncertainty now hanging over power generation investment.
"I know from my responsibilities as minister for energy that the energy sector knows that something has to be done, because if you don't have a price on carbon, you cannot price investment which goes to energy security," he said.
Prime Minister Julia Gillard has promised multi-party talks next year to build consensus on carbon pricing after the dead-heat August 21 vote left Labor needing support from three independents and one Greens member of parliament to pass laws in the lower house.
Gillard's Labor went to the election promising a 5 percent cut in 2000-level emissions by 2020, and to seek consensus for a carbon trading plan twice rejected by parliament and currently shelved.
But under a deal with the Greens, who will wield sole balance of power in the Senate from mid-2011, Labor has promised a new committee of lawmakers and experts to work on a policy to price carbon pollution and promote renewable energy.
The Greens want the government to introduce a carbon tax as an interim step ahead of market-based carbon trading, although the government has previously ruled out a carbon tax.
The chief executive of AGL Energy, Michael Fraser, last week called for a staggered approach to climate change by introducing an emissions trade scheme that covered only power plants, as stationary energy accounted for 40 percent of Australia's greenhouse gas emissions.
"This would leave other more contentious sectors, including transport, agriculture and waste, out of the scheme until later in the piece," Fraser said.
Energy generators argue that until there is a clear price on carbon, there is no incentive to build the baseload gas power plants needed to replace polluting coal-fired stations.
About 80 percent of Australia's electricity comes from burning coal, the dirtiest of the fossil fuels used in power generation.
Ferguson said power in Australia had historically been low priced, but electricity costs would have to rise.
"That's ... because we have to invest a huge amount of money over the next decade just to maintain our existing distribution and retail network," he said. "It's A$100 billion (US$94.6 billion) over the decade, of which A$40 billion is already committed."
He said he was optimistic a carbon price would be established within the current parliament, but the solution would have to stand the test of time economically, while also curbing Australia's per-capita emissions, among the highest in the developed world.
"Community expectations aren't just built on the back of environmental desires, but also premised on having a strong economy which also allows you to take action on climate change," he told the newspaper.
Ferguson, in an interview with the Australian Financial Review newspaper, said there was a risk of large blackouts in 10 to 15 years because of the carbon price uncertainty now hanging over power generation investment.
"I know from my responsibilities as minister for energy that the energy sector knows that something has to be done, because if you don't have a price on carbon, you cannot price investment which goes to energy security," he said.
Prime Minister Julia Gillard has promised multi-party talks next year to build consensus on carbon pricing after the dead-heat August 21 vote left Labor needing support from three independents and one Greens member of parliament to pass laws in the lower house.
Gillard's Labor went to the election promising a 5 percent cut in 2000-level emissions by 2020, and to seek consensus for a carbon trading plan twice rejected by parliament and currently shelved.
But under a deal with the Greens, who will wield sole balance of power in the Senate from mid-2011, Labor has promised a new committee of lawmakers and experts to work on a policy to price carbon pollution and promote renewable energy.
The Greens want the government to introduce a carbon tax as an interim step ahead of market-based carbon trading, although the government has previously ruled out a carbon tax.
The chief executive of AGL Energy, Michael Fraser, last week called for a staggered approach to climate change by introducing an emissions trade scheme that covered only power plants, as stationary energy accounted for 40 percent of Australia's greenhouse gas emissions.
"This would leave other more contentious sectors, including transport, agriculture and waste, out of the scheme until later in the piece," Fraser said.
Energy generators argue that until there is a clear price on carbon, there is no incentive to build the baseload gas power plants needed to replace polluting coal-fired stations.
About 80 percent of Australia's electricity comes from burning coal, the dirtiest of the fossil fuels used in power generation.
Ferguson said power in Australia had historically been low priced, but electricity costs would have to rise.
"That's ... because we have to invest a huge amount of money over the next decade just to maintain our existing distribution and retail network," he said. "It's A$100 billion (US$94.6 billion) over the decade, of which A$40 billion is already committed."
He said he was optimistic a carbon price would be established within the current parliament, but the solution would have to stand the test of time economically, while also curbing Australia's per-capita emissions, among the highest in the developed world.
"Community expectations aren't just built on the back of environmental desires, but also premised on having a strong economy which also allows you to take action on climate change," he told the newspaper.
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