Brown coal and the cost of living
Comment: Victoria has announced it is tripling the royalty it charges brown coal miners to raise an extra quarter of a billion dollars over the next four years.
PT2M3S 620 349"You want people to do less of something, you jack up the tax on it," Prime Minister Turnbull declared over the weekend.
No, of course that wasn't in the context of anything about carbon emissions.
Coincidentally, the Victorian Labor government in its budget today is tripling up the tax on the state's infamously dirty brown coal to raise an extra quarter of a billion dollars over the next four years - but it's at pains to stress that consumers shouldn't really notice if the electricity generators know what's good for 'em.
A giant dredging machine at work in the brown coal mine at Loy Yang in the Latrobe Valley. Photo: John Woudstra
The government reportedly is concerned about electors being concerned about increased cost of living pressures, hence the warning to generators to absorb the brown coal royalty hike.
Despite being overwhelmingly reliant on burning brown coal, Victoria keeps its electricity cheap, so burn away.
CPI figures
Many of Victoria's coal-fired generators are effectively museum pieces. Photo: James Davies
For lovers of contradictions, of political bombast conflicting with reality, it's a nice day as we also get the Australian Bureau of Statistics March quarter consumer price index. The CPI release will show the cost of living actually isn't rising much at all. Today's figures are tipped to show a headline rise of just 0.2 per cent for the March quarter and 1.7 per cent for the past year.
We're so used to being whipped up by tabloid cost of living stories, many people believe them. And it's human nature to remember the things that cost more while overlooking those that have become cheaper.
Victoria effectively is just bringing its little carbon tax into line with what's charged in New South Wales and Queensland.
Nonetheless, at a time of very low inflation, the government doesn't want voters to blame it for their dirty coal making their electricity a little more expensive.
Memo Bill Shorten: if you're going to the barricades over a carbon tax at some stage, don't count on your Victorian state colleagues for any support.
Burning mud
If we took climate change seriously, Victoria wouldn't have any brown coal royalties income as it wouldn't have mines for brown coal.
Compared with the good black stuff, it's like burning mud. And it's being done in less than state-of-the-art generators.
There's a story, perhaps apocryphal, of a group of Chinese engineers being shown a Victorian generator and saying amongst themselves that they should bring their students there – to see a working museum piece.
In the first year after the abolition of the federal carbon tax, our national carbon dioxide emissions increased by 4.3 per cent – 6.4 million tonnes – mainly thanks to Victoria's four large brown coal generators running at greater capacity more often as the electricity they generated became cheaper.
The latest Carbon Emissions Index from consultants Pitt & Sherry and The Australia Institute shows carbon emissions have continued to grow from there, but now with black coal burning leading the way thanks to increased demand for electricity in Queensland and Victoria ceasing to supply Tasmania.
What's particularly appealing for contradiction lovers is that electricity use in Queensland's coal seam gas industry is the main driver for burning more coal.
Annual electricity demand for coal seam gas production pushed a 9 per cent increase in total state demand from the November 2014 level. So we're burning more coal, producing more carbon emissions, to produce gas which will produce less carbon than coal-fired generators when it reaches its foreign destinations.
Record summer temperatures also play their part in boosting carbon emissions. As well as being full of bemusing contradictions, the world also can seem a little circular at times.
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