Industry abandons script: This was not what the Howard government wanted to hear. It had held up the idea of carbon capture – or storing greenhouse gases deep underground – as one of its great hopes for combating climate change without hurting Australia’s coal-hungry economy. But Prime Minister John Howard had also refused to countenance any kind of greenhouse emissions trading system.
Electricity price would double: Over and again the committee heard that carbon capture – also called geosequestration – was a hugely promising technology. But it would cost a lot. Installing it at existing power stations would double the cost of electricity, according to CSIRO’s evidence to the inquiry. Even after 15 or 20 years perfecting it, geosequestration would still push the cost of electricity up by 30 per cent, CSIRO said.
Industry baulks at cost:Industry was telling the government that it would not bear this cost unless it had to. So either the government paid much of the enormous cost of installing carbon capture technology through tax concessions or direct funding, or it put a price on carbon emissions so there was an economic incentive for industry to make the investment slowly.
Santos sees no incentive: Oil and gas company Santos put it this way: “A viable carbon emission abatement trading system with a carbon dioxide price signal does not currently exist in Australia, hence there is no economic incentive to consider geosequestration as a long-term business proposition.”
Emissions trade is the only way:The Energy Supply Association of Australia – representing 46 electricity and gas CE0s – said much the same. Even the Australian Coal Association said carbon capture would only happen when there was an emissions trading scheme so that electricity generators could recoup their investment. “There needs to be a market signal that puts a price on carbon,” said Stanwell Corp’s acting chief executive, Gary Humphrys.
The Australian Financial Review, 16/9/2006, p. 26