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Climate change solutions. A Carbon tax may be one answer.

Updated on April 9, 2011

As reported in the New York Times today ~ Climate Change is going to be a very serious issue!

"WASHINGTON — The changing global climate will pose profound strategic challenges to the United States in coming decades, raising the prospect of military intervention to deal with the effects of violent storms, drought, mass migration and pandemics, military and intelligence analysts say

Such climate-induced crises could topple governments, feed terrorist movements or destabilize entire regions, say the analysts, experts at the Pentagon and intelligence agencies who for the first time are taking a serious look at the national security implications of..."

Australia and Climate Change policies

Climate change solutions- Much of the public and political debate on global warming has focused on finding substitutes for fossil fuels. Reducing emissions that contribute to greenhouse gases and furthering negotiations toward an international climate treaty — not potential security challenges. Increasing threat posed by climate change such as here in the Pacific near Australia Will cause considerable security concerns. For instance low lying Islands near Australia are set to be inundated and completely covered by the sea. This has massive ramifications for the geo political situation such as people movements & refugees escaping from the effects of climate change.

It has been predicted that large segments of global energy capital will either black ban Australia or demand much higher returns with enormous consequences to the nation. These include consequences for new renewable energy projects. Most of the Government policies so far have encouraged householders to reduce their carbon footprint by installing water reduction taps and other conservation measures such as solar hot water systems. In addition the Federal Government is set this week to introduce a global carbon emissions scheme, an (ETS). Under this scheme polluter will be able to offset or buy credits to offset the carbon that it emits. However large carbon polluters such as the coal, gas and other large energy users are demanding cash and concessions in return for joining the scheme. If the government grants the concessions they are seeking that they will have to dovery little in regards to altering their behaviour and reducing their global carbon footprint

Let’s go through what is about to happen to our nation because of a the government policy. Worse an incompetent opposition who appear to have failed to grasp what will happen to peoples behaviour from the implementation of an ETS scheme. Rather than change behaviour which is what everyone is hoping for it is likely to entrench existing bad habits rather than create new ones. For instance if we give massive concessions to heavy polluting industry whilst encouraging householders to be frugal with their energy use the effects on carbon emissions will be minimal. Further such measures will not off-set the increasing demand for power. Robert Gottleibsen1 a distinguished economist who now has a column in the highly regarded publication Business Spectator says, An ETS is so indirect in it's taxing arrangement that it will have no effect on business or indiviuals behaviour. This is the fundamental flaw in the design of the ETS. The demand for the power in the form of electricity is likely to keep increasing into the foreseeable future. For instance call centres and computer hubs use massive amounts of energy.

Add this to the growth in the population in Australia as a whole and you have an increasing need for power and products that use a lot of power in their production..
In most parts of the world, apart from Australia, it is believed that the form of carbon trading scheme being proposed by Australia will not promote investment in lower carbon energy alternatives. We are about to prove the rest of the world right.

If and when a nation or a company is doing something silly there will be a trigger that explodes the wrong strategy. In this case it is the Latrobe Valley brown coal power stations. These stations have huge debt repayments to make. As well they emit a lot of carbon so the Canberra plan was that they should go broke and be bought at token prices.

Plans was that the market would do its job and the power companies that own the stations and the banks that funded them will suffer well-deserved losses.

The reason is because the banks knew the risks they were taking when they made the investments and loans. If only it were so simple.
A number of large global players who invested in the Latrobe Valley, and they have not had big returns. Accepted practice in the US and Europe is that while there are no big profits for investors in legacy coal power stations there are no big losses. Power station groups need to have 'strong balance sheets' to invest in renewable, gas and other low carbon power generating alternatives. Australia is turning a blind eye to the giants and global bankers and wants the world to follow us. We are about to learn what happens when you play that game and get it wrong.

A number of the Latrobe Valley Power companies will halt long term maintenance.

Truenergy has already announced this, but at least one or two other Latrobe stations follow. The power stations say who in their right mind would spend cash when they have no idea whether the generators will be viable in the short and long term because the level of carbon charges and carbon policy is not known. Last summer every Latrobe Valley station went without a break down – the first time that has happened. This summer the odds are that they will break down. The companies are gradually abandoning long term contracts and going for the spot market which means that when there is a power station failure they will go into an Australian wide bidding process for power sending prices through the roof.

The banks will have the power to take control of at least one Latrobe Valley power station within six to nine months. They will be trying to extract as much money from the station as possible so will also cease long term maintenance and go for spot prices. If Australian and Victoria think the blackouts next summer are going to be bad wait for the following year when the full impact hits the nation.

Premier John Brumby’s staff know exactly what is going to happen to their state and realise that although this is a Canberra induced crisis they will cop the blame. Brumby’s people have gone to Canberra and been met with a wall of Bureaucrats. .

So how do we get out of this? We can only hope that the legislation is voted down. The crazy carbon trading legislation and forget the massive grants needed to offset the cost of carbon permits.

There will be no double dissolution because by the time one is due the disaster will be apparent. We have to devise a plan that phases out brown coal without sending the stations broke. We will need to foster low carbon gas-fired stations in the Latrobe Valley plus a lot more renewable projects. What we will need is a carbon-certain environment.

Right now the answer seems to be lost in Canberra. If we go to elsewhere such as China, the US, India or Europe we will find the answers.

According to experts in the field the real answer now is 4th Generation Nuclear Power Plants.



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