{"id":35691,"date":"2020-01-06T11:49:01","date_gmt":"2020-01-06T01:19:01","guid":{"rendered":"https:\/\/www.solarquotes.com.au\/blog\/?p=35691"},"modified":"2020-01-06T12:17:58","modified_gmt":"2020-01-06T01:47:58","slug":"aemo-2020-isp-evil","status":"publish","type":"post","link":"https:\/\/www.solarquotes.com.au\/blog\/aemo-2020-isp-evil\/","title":{"rendered":"AEMO Says They Will Support A Broken Market System That Puts Lives In Danger"},"content":{"rendered":"<div id=\"attachment_36168\" style=\"width: 1210px\" class=\"wp-caption alignnone\"><img decoding=\"async\" aria-describedby=\"caption-attachment-36168\" class=\"wp-image-36168 size-full\" src=\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/aemo2020isp.jpg\" alt=\"AEMO 2020 Integrated System Plan\" width=\"1200\" height=\"628\" srcset=\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/aemo2020isp.jpg 1200w, https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/aemo2020isp-300x157.jpg 300w, https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/aemo2020isp-1024x536.jpg 1024w, https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/aemo2020isp-768x402.jpg 768w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><p id=\"caption-attachment-36168\" class=\"wp-caption-text\">Australia&#8217;s Energy Markets Are Broken Because They Ignore Externalities<\/p><\/div>\n<p>You would think the middle of a horrendous bushfire season &#8212; at a time when large areas of New South Wales were ablaze and air quality in Sydney was worse than Shanghai thanks to smoke hanging in the air like the ghost of gums before drifting out to sea &#8212; would be a bad time for the Australia Energy Market Operator (<a href=\"https:\/\/www.aemo.com.au\/\" target=\"_blank\" rel=\"noopener noreferrer\">AEMO<\/a>) to announce they are okay with people dying from fossil fuel use as long as someone is making money from it.<!--more--><\/p>\n<p>You&#8217;d think they&#8217;d really do their best to avoid that, but they went and did it anyway in their <a href=\"https:\/\/www.aemo.com.au\/Electricity\/National-Electricity-Market-NEM\/Planning-and-forecasting\/Integrated-System-Plan\/2019-Integrated-System-Plan\" target=\"_blank\" rel=\"noopener noreferrer\">Draft 2020 Integrated System Plan<\/a>. All I can say is, thank god it&#8217;s a draft report, because they have a chance to take the evil out before it&#8217;s final.<\/p>\n<div id=\"attachment_35752\" style=\"width: 1023px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" aria-describedby=\"caption-attachment-35752\" class=\"wp-image-35752 size-full\" src=\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2019\/12\/fullevil.jpg\" alt=\"\" width=\"1013\" height=\"719\" srcset=\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2019\/12\/fullevil.jpg 1013w, https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2019\/12\/fullevil-300x213.jpg 300w, https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2019\/12\/fullevil-768x545.jpg 768w\" sizes=\"(max-width: 1013px) 100vw, 1013px\" \/><p id=\"caption-attachment-35752\" class=\"wp-caption-text\">Australian actor, Kirk Lazarus, gives good advice.<\/p><\/div>\n<p>The problem is clearly stated in part A of the executive summary of the draft Integrated System Plan (ISP):<\/p>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-35753 size-full\" src=\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2019\/12\/execsum.gif\" alt=\"AEMO Draft 2020 Integrated System Plan executive summary\" width=\"942\" height=\"153\" \/><\/p>\n<p>For those that don&#8217;t spend hours a day thinking about these things or have simply become numb to corporate buzz-speak, you may not see what the problem is.\u00a0 So, for clarity, I&#8217;ll underline the evil part and then launch into a protracted explanation\/rant on why it&#8217;s evil and why the AEMO should be fighting to change the system and not saying they&#8217;re okay with people dying as long as the market&#8217;s doing well:<\/p>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-35754 size-full\" src=\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2019\/12\/problem.gif\" alt=\"maximise net market benefits\" width=\"942\" height=\"85\" \/><\/p>\n<h2>Our Energy Markets Are Broken<\/h2>\n<p>The problem with &#8220;maximising net market benefits&#8221;<sup class='endnote'><a href='https:\/\/www.solarquotes.com.au\/blog\/aemo-2020-isp-evil\/#en-35691-1' id='enref-35691-1' onclick='return hhEndnotes_show(35691)'>1<\/a><\/sup> is our energy markets are broken.\u00a0 Broken in a way that breaks bodies.\u00a0 This is because they ignore externalities, which are costs society pays but are not included in market prices.\u00a0 This allows fossil fuel power stations to sell the electricity they produce without paying for the harm it causes.<\/p>\n<p>For energy the two main externalities are:<\/p>\n<ul>\n<li>Health costs from particulates and toxins released into the atmosphere from burning fossil fuels.\u00a0 These can cause sickness, disability, and death.<\/li>\n<li>Costs of global warming from greenhouse gases emitted by burning fossil fuels.<\/li>\n<\/ul>\n<p>There are other externalities such as:<\/p>\n<ul>\n<li>Reduced agricultural production from <a href=\"https:\/\/www.ars.usda.gov\/southeast-area\/raleigh-nc\/plant-science-research\/docs\/climate-changeair-quality-laboratory\/ozone-effects-on-plants\/\" target=\"_blank\" rel=\"noopener noreferrer\">ground level ozone<\/a> and other toxins emitted by coal power.<\/li>\n<li>Water consumption and pollution.<\/li>\n<li>Increased global warming from <a href=\"http:\/\/users.clas.ufl.edu\/prwaylen\/GEO2200%20Readings\/Readings\/Climate%20change\/Soot%20is%20warming%20the%20world%20even%20more%20than%20we%20thought..pdf\" target=\"_blank\" rel=\"noopener noreferrer\">coal and diesel soot<\/a> darkening ice, snow, and other surfaces; causing them to reflect less sunlight energy back into space.<\/li>\n<li>Increased cleaning costs caused by soot.<\/li>\n<\/ul>\n<p>But the first two are more than enough to make reducing fossil fuel consumption a much higher priority than Hawaiian holidays or hobnobbing with cricket players.<\/p>\n<h2>An Externalities Example<\/h2>\n<p>In our current broken system, if there are two companies:<\/p>\n<ul>\n<li>Company D for dirty, which uses coal and gas to generate electricity, and&#8230;<\/li>\n<li>Company MC for mostly clean, which uses solar, wind, gas, and battery storage.<\/li>\n<\/ul>\n<p>If these two companies supply identical amounts of electrical energy at identical times, then they will receive exactly the same reward but no punishment for the harm they cause. This is despite the fact emissions from the smokestacks of Company D may have killed 10 people while Company MC&#8217;s meager emissions may not have killed anyone.<\/p>\n<p>If you were choosing a roommate you&#8217;d obviously go for the one that probably didn&#8217;t kill anyone, rather than the one that killed roughly 10 people but insists:<\/p>\n<blockquote><p>&#8220;It was only business.&#8221;<\/p><\/blockquote>\n<div class=\"youtube-wrapper\"><iframe title=\"It &#039;s strictly business.wmv\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/Bo7zkd0kRS4?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/div>\n<p>If you were instead choosing which electricity generation company you were going to allow to operate in your state, you&#8217;d be nuts to allow Company D, as that would be the action of a sadist.<\/p>\n<p>If Company D was already operating in your state and your state was dependent on the electricity it produced then, assuming you&#8217;re not a sadist, you&#8217;d obviously want them to stop killing people.\u00a0 If immediately shutting down their most polluting capacity wasn&#8217;t feasible, then the most economically efficient way to encourage them to clean up their act would be to make them pay for the cost of their externalities.<\/p>\n<p>Being forced to pay for the health and environmental costs of their pollution gives Company D a strong incentive to produce cleaner energy.\u00a0 But if it&#8217;s not possible to produce enough clean energy to meet demand, then dirty energy can be produced.\u00a0 It may cost more as they have to pay for externalities, but there&#8217;s no need for the lights to go off.<\/p>\n<h2>Generators Paying For Externalities Does Not Make Us Poorer<\/h2>\n<p>If fossil fuel generators are made to pay for their externalities we don&#8217;t end up poorer as a result.\u00a0 This is because it doesn&#8217;t increase costs, it only changes who is responsible for them.<sup class='endnote'><a href='https:\/\/www.solarquotes.com.au\/blog\/aemo-2020-isp-evil\/#en-35691-2' id='enref-35691-2' onclick='return hhEndnotes_show(35691)'>2<\/a><\/sup><\/p>\n<p>If generators are made to pay for the health costs of burning fossil fuels then, even though they&#8217;ll try to pass along as much of that cost as they can in electricity bills, it means less money from other sources, whether government tax revenue or from our own pockets, will be needed to pay for healthcare and days of work and life lost.<sup class='endnote'><a href='https:\/\/www.solarquotes.com.au\/blog\/aemo-2020-isp-evil\/#en-35691-3' id='enref-35691-3' onclick='return hhEndnotes_show(35691)'>3<\/a><\/sup><\/p>\n<p>We will be better off than before because once generators have to pay for their health and environmental externalities they will have an incentive to stop polluting so much and build cleaner generating capacity.\u00a0 We will end up better than we were before, both healthier and safer, by making the responsible parties pay for the harm they cause.<\/p>\n<h2>The Health Costs Of Coal Are Real<\/h2>\n<p>One <a href=\"https:\/\/apo.org.au\/sites\/default\/files\/resource-files\/2009\/03\/apo-nid4196-1189331.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">report that addresses the health costs of coal<\/a> gives a a figure of $2.6 billion a year.<sup class='endnote'><a href='https:\/\/www.solarquotes.com.au\/blog\/aemo-2020-isp-evil\/#en-35691-4' id='enref-35691-4' onclick='return hhEndnotes_show(35691)'>4<\/a><\/sup>\u00a0 This report is from 2009 and in that time we have barely decreased our coal consumption, and as the population has increased there are more people breathing the pollution.\u00a0 Also, we&#8217;ve become richer, which means the value of hours of work or leisure lost due to illness or deadness are now higher.<\/p>\n<div id=\"attachment_36055\" style=\"width: 734px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" aria-describedby=\"caption-attachment-36055\" class=\"wp-image-36055 size-full\" src=\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/reservebankcoal.gif\" alt=\"Australian coal production and exports\" width=\"724\" height=\"579\" \/><p id=\"caption-attachment-36055\" class=\"wp-caption-text\">The brown and black bars are Australia&#8217;s domestic coal consumption. (Image: Reserve Bank of Australia)<\/p><\/div>\n<p>After adjusting for inflation over the past 11 years, the $2.6 billion comes to $3.2 billion in today&#8217;s money.\u00a0 If I also adjust for the 16% increase in Australia&#8217;s population it comes to around $4 billion per year.\u00a0 With <a href=\"https:\/\/www.abs.gov.au\/AUSSTATS\/abs@.nsf\/Web+Pages\/Population+Clock?opendocument&amp;ref=HPKI\" target=\"_blank\" rel=\"noopener noreferrer\">25.6 million<\/a> people in Australia, that&#8217;s equivalent to $156 per person or $406 for the average household size of 2.6 people.\u00a0 While this cost doesn&#8217;t appear on our bills, it is something we&#8217;re all paying, although some get off lightly while others pay the ultimate price.<\/p>\n<p>As the average annual residential<sup class='endnote'><a href='https:\/\/www.solarquotes.com.au\/blog\/aemo-2020-isp-evil\/#en-35691-5' id='enref-35691-5' onclick='return hhEndnotes_show(35691)'>5<\/a><\/sup> electricity bill is <a href=\"https:\/\/www.aemc.gov.au\/sites\/default\/files\/2019-12\/2019%20Residential%20Electricity%20Price%20Trends%20final%20report%20FINAL.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">around $1,400<\/a> then, according to the $4 billion figure, the hidden health cost means we&#8217;re actually paying about 30% more.\u00a0 But instead of it appearing on electricity bills we pay for it through health insurance, the medicare levy, general taxation revenue, and suffering.<\/p>\n<p>As Australia generates around <a href=\"https:\/\/www.energy.gov.au\/sites\/default\/files\/2019_aes_table_o_march_2019.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">160 billion kilowatt-hours<\/a> from coal per year this comes to around comes to around 2.5 cents in health costs per kilowatt-hour of coal electricity.<sup class='endnote'><a href='https:\/\/www.solarquotes.com.au\/blog\/aemo-2020-isp-evil\/#en-35691-6' id='enref-35691-6' onclick='return hhEndnotes_show(35691)'>6<\/a><\/sup><\/p>\n<h2>Direct Health Costs Similar To Current Environmental Charges<\/h2>\n<p>The environmental charges on electricity bills currently come to around 2 cents per kilowatt-hour for grid electricity:<\/p>\n<div id=\"attachment_36065\" style=\"width: 889px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" aria-describedby=\"caption-attachment-36065\" class=\"wp-image-36065 size-full\" src=\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/aemccharges.gif\" alt=\"green scheme charges - electricity bills\" width=\"879\" height=\"457\" \/><p id=\"caption-attachment-36065\" class=\"wp-caption-text\">This table was published by the Australian Energy Market Commission in December 2018 so their figures for this financial year and the next are only estimates. As the LRET (Large-scale Renewable Energy Target) is being wound down, its cost is expected to fall a long way over the next few years. (Image Source: AEMC)<\/p><\/div>\n<p>If these charges were only applied to coal fired power generation they would come to around 3 cents per coal kilowatt-hour.<\/p>\n<p>I&#8217;m not saying the environmental charges mean the health costs of coal are already included in what we pay for electricity.\u00a0 Instead, I&#8217;m pointing out that axing these environmental charges won&#8217;t make Australians better off, as without them we&#8217;d suffer from more externalities thanks to our broken energy markets.<\/p>\n<p>These environmental charges have protected our health by preventing the expansion of coal generation and, when the environmental benefit of avoided greenhouse gas emissions are included, have been well worth it &#8212; even though they would have been more effective if they had been direct charges on fossil fuel externalites.\u00a0 But for some reason our politicians didn&#8217;t want to do that.<\/p>\n<h2>Air Pollution Makes Us Heaps Dumberer<\/h2>\n<p>The $4 billion figure is only an estimate of the direct health costs of coal pollution.\u00a0 The are also indirect costs and these appear to be massive.\u00a0 In addition to making us sick and dead, air pollution also makes use dumberer than we otherwise would be.\u00a0 It affects the mental development of children so they don&#8217;t grow up as sharp as they could be and we also become temporarily dumber when <a href=\"https:\/\/www.edworkingpapers.com\/ai20-188\" target=\"_blank\" rel=\"noopener noreferrer\">exposed to air pollution<\/a>.<\/p>\n<p>Australia is not a <a href=\"https:\/\/www.themercury.com.au\/news\/opinion\/more-than-25-years-after-the-clever-country-little-has-changed\/news-story\/53c45ed466e2b4c6840f4271d1952cad\" target=\"_blank\" rel=\"noopener noreferrer\">clever country<\/a>.\u00a0 If it were, we would have been smart enough not to try to describe ourselves that way.\u00a0 To me it&#8217;s clear we need all the smarts we can get.\u00a0 While it&#8217;s not possible to be certain what the total cost of reduced intelligence and other effects of air pollution are, the Lancet puts the cost of air pollution from all sources at <a href=\"https:\/\/www.thelancet.com\/pdfs\/journals\/lancet\/PIIS0140-6736(17)32345-0.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">3.52% of GDP<\/a> for developed countries:<\/p>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-36070 size-full\" src=\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/lancet.jpg\" alt=\"cost of air pollution\" width=\"1024\" height=\"274\" srcset=\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/lancet.jpg 1024w, https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/lancet-300x80.jpg 300w, https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/lancet-768x206.jpg 768w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/p>\n<p>Australia has a $2 trillion GDP so that would come to $70 billion per year.\u00a0 Hopefully, the cost would be less for us thanks to our better than average air quality:<\/p>\n<div id=\"attachment_36073\" style=\"width: 919px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" aria-describedby=\"caption-attachment-36073\" class=\"wp-image-36073 size-full\" src=\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/airpollist.jpg\" alt=\"Air quality - Australia\" width=\"909\" height=\"617\" srcset=\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/airpollist.jpg 909w, https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/airpollist-300x204.jpg 300w, https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/airpollist-768x521.jpg 768w\" sizes=\"(max-width: 909px) 100vw, 909px\" \/><p id=\"caption-attachment-36073\" class=\"wp-caption-text\">This list is a few years old now and is definitely not based on recent measurements. (Image Source: Business Insider)<\/p><\/div>\n<p>In addition to its direct health costs, air pollution is taking a large toll on society by preventing us from reaching our full potential.\u00a0 I don&#8217;t know how to calculate the losses from this and the reason may be because I&#8217;ve been exposed to too much air pollution.<\/p>\n<h2>The Costs Of Greenhouse Gas Emissions Are Real<\/h2>\n<p>There are real and serious costs to greenhouse gas emissions destabilizing the climate.\u00a0 You only have to look at the current disastrous bushfire season to see that.\u00a0 Bushfires would still occur if humans hadn&#8217;t caused any global warming, but the approximate <a href=\"http:\/\/www.bom.gov.au\/climate\/change\/#tabs=Tracker&amp;tracker=timeseries\" target=\"_blank\" rel=\"noopener noreferrer\">1.5 degree increase<\/a> in Australian temperatures over the past 100 years has extended the bushfire season and increased risk.\u00a0 As I write this, more hectares have been burned than since the start of accurate record keeping and at least 22 people have been killed.\u00a0 There will also be hundreds, or <a href=\"https:\/\/www.solarquotes.com.au\/blog\/bushfire-smoke-deaths\/\">possibly thousands, of excess deaths<\/a> due to the <a href=\"https:\/\/insidestory.org.au\/slow-burn\/\" target=\"_blank\" rel=\"noopener noreferrer\">additional air pollution<\/a> from smoke.<\/p>\n<p>While we can&#8217;t determine exactly how much additional harm the bushfires caused as a result of climate change, we can be confident it was considerable and immediate action to cut emissions is warranted.\u00a0 After all, we don&#8217;t wait to calculate the exact chance of an oncoming bus hitting us before we jump out of the way.<\/p>\n<div class=\"youtube-wrapper\"><iframe title=\"Sir, the possibility of successfully navigating an asteroid field...\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/aPB6AlNRRtQ?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/div>\n<h2>Putting A Price On Carbon<\/h2>\n<p>Economists have looked at various costs of global warming, including loss of <a href=\"https:\/\/www.theverge.com\/2019\/3\/14\/18265833\/new-york-city-climate-change-sea-level-rise-bill-de-blasio-development\" target=\"_blank\" rel=\"noopener noreferrer\">coastal real estate<\/a> due to rising oceans, decreases in agricultural and labour productivity, the spread of disease, and other factors and have generally concluded we should put a price on carbon dioxide emissions of at least $50 a tonne, with the <a href=\"https:\/\/www.imf.org\/external\/pubs\/ft\/fandd\/2019\/12\/pdf\/fd1219.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">IMF suggesting $110 a tonne<\/a> by 2030.<\/p>\n<p>But I have a simpler way of determining what the carbon price should be.\u00a0 We have already increased the amount of CO2 in the atmosphere by 27% in the past 50 years:<\/p>\n<div id=\"attachment_36077\" style=\"width: 1180px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" aria-describedby=\"caption-attachment-36077\" class=\"wp-image-36077 size-full\" src=\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/carbondioxidehumanevolution.jpg\" alt=\"Atmospheric CO2 levels\" width=\"1170\" height=\"461\" srcset=\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/carbondioxidehumanevolution.jpg 1170w, https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/carbondioxidehumanevolution-300x118.jpg 300w, https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/carbondioxidehumanevolution-1024x403.jpg 1024w, https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/carbondioxidehumanevolution-768x303.jpg 768w\" sizes=\"(max-width: 1170px) 100vw, 1170px\" \/><p id=\"caption-attachment-36077\" class=\"wp-caption-text\">I got tired of CO2 graphs that only show the past 100 or so years, so I found this one that shows how out of whack things are from the point of view of human evolution. (Image Source: NASA &#8212; But I added in the notes along the top.)<\/p><\/div>\n<p>The amount of additional CO2 or other greenhouse gas that is safe to add to the atmosphere is zero.\u00a0 Because of this, I say the price that should be put on emitting one tonne of CO2 into the atmosphere should be equal to the cost of removing it from the atmosphere and sequestering it long-term.<\/p>\n<p>My estimate of what this may cost is roughly $70 per tonne.<sup class='endnote'><a href='https:\/\/www.solarquotes.com.au\/blog\/aemo-2020-isp-evil\/#en-35691-7' id='enref-35691-7' onclick='return hhEndnotes_show(35691)'>7<\/a><\/sup>\u00a0 My <a href=\"https:\/\/www.youtube.com\/watch?v=ejxR0zGaflg\" target=\"_blank\" rel=\"noopener noreferrer\">Enough Is Enough<\/a> point of view ends up being lower than the IMF calculations, so I guess I&#8217;m just more optimistic than they are.\u00a0 (I&#8217;m not sure this means I&#8217;ve been exposed to more or less air pollution than they have.)<\/p>\n<p>When CO2 emissions from mining are included, generating one kilowatt-hour of electricity from coal in Australia emits around 1 kilogram of CO2.\u00a0 Using my figure of $70 per tonne of CO2, the carbon price for coal generation should be around 7 cents per kilowatt-hour.\u00a0 If we just consider emissions from generation then natural gas does much better:<\/p>\n<ul>\n<li>Coal carbon price per kilowatt-hour &#8212; 7 cents<\/li>\n<li>50% efficient Combined Cycle natural gas, eg. <a href=\"https:\/\/en.wikipedia.org\/wiki\/Pelican_Point_Power_Station\" target=\"_blank\" rel=\"noopener noreferrer\">Pelican Point Power Station<\/a> &#8212; 2.5 cents<\/li>\n<li>25% efficient natural gas, eg. old gas turbine used in heat wave conditions &#8212; 5 cents<\/li>\n<\/ul>\n<p>Unfortunately, natural gas leaks from extraction, refining, and transport will increase carbon prices for natural gas generation,<sup class='endnote'><a href='https:\/\/www.solarquotes.com.au\/blog\/aemo-2020-isp-evil\/#en-35691-8' id='enref-35691-8' onclick='return hhEndnotes_show(35691)'>8<\/a><\/sup> but they should still be significantly better than for coal.<\/p>\n<h2>We Need To Fix Our Energy Markets<\/h2>\n<p>Just to be clear, saying our energy markets are broken is not a communist thing.\u00a0 Just because I look like the love child of Karl Marx and Friedrich Engels (they had several) does not mean I&#8217;m against markets.\u00a0 My attitude towards markets is the same as my attitude towards fire.\u00a0 A very useful tool but a lousy thing to sacrifice your children to.<\/p>\n<div id=\"attachment_36025\" style=\"width: 1978px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" aria-describedby=\"caption-attachment-36025\" class=\"size-full wp-image-36025\" src=\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/beardboys.jpg\" alt=\"\" width=\"1968\" height=\"845\" srcset=\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/beardboys.jpg 1968w, https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/beardboys-300x129.jpg 300w, https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/beardboys-1024x440.jpg 1024w, https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/beardboys-768x330.jpg 768w, https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/beardboys-1536x660.jpg 1536w\" sizes=\"(max-width: 1968px) 100vw, 1968px\" \/><p id=\"caption-attachment-36025\" class=\"wp-caption-text\">Karl Marks on the left, Friedrich Engels on the right, and Ronald Brax in the centre:\u00a0 &#8220;By the power of their beards combined!&#8221;<\/p><\/div>\n<p>To work efficiently, energy markets need to take externalites into account.\u00a0 I want markets to be efficient and to be a benefit and not a hindrance to humanity, so my stance is pro-market.\u00a0 Because the Coalition removed the carbon price we used to have and refuse to consider pricing in any fossil fuel externalities, their stance is anti-market.<\/p>\n<p>Unfortunately, our energy markets will remain broken until we repair them and we need to start now because the damage caused by climate change will only grow if we delay.\u00a0 We will all suffer the consequences of inaction and we&#8217;re dragging our children into this mess along with us.\u00a0 This makes me sad because I have children and I actually like some of them.<\/p>\n<h2>A Carbon Price Isn&#8217;t Necessary But Action Is<\/h2>\n<p>My advice is to put a price on each kilowatt-hour of fossil fuel generation equal to the cost of its health and environmental externalities.\u00a0 This is because it&#8217;s the most economically efficient way to transition from dangerous to safe energy.\u00a0 But we don&#8217;t have to do that.\u00a0 There are other options.\u00a0 We could use regulation to require fossil fuel generators do one or more of the following:<\/p>\n<ul>\n<li>Meet a steadily tightening restriction on emissions per kilowatt-hour or face hefty fines.<\/li>\n<li>Participate in a reverse auction each year to receive money to permanently shut down coal capacity, with the amount paid by the remaining greenhouse gas emitting generators.<\/li>\n<li>Pay into a <a href=\"https:\/\/www.solarquotes.com.au\/blog\/national-climate-disaster-fund-mb1335\/\" target=\"_blank\" rel=\"noopener noreferrer\">climate disaster fund<\/a>.<\/li>\n<li>Pay to offset their emissions in various ways.<\/li>\n<li>Require them to capture and sequester a steadily growing portion of their emissions.<\/li>\n<\/ul>\n<p>There are also plenty of other things that could be done.\u00a0 Sure, it would be dumb not to make generators directly pay for externalites, but when our grandchildren point out how stupid we were, we can blame it on air pollution.<\/p>\n<h2>Normally We Try To Save Lives<\/h2>\n<p>If we could instantly replace all fossil fuel generation with clean renewable energy, that would be wonderful.\u00a0 Unfortunately, that&#8217;s not going to happen.\u00a0 But just because it&#8217;s not practical to halt the burning of fossil fuels over a weekend doesn&#8217;t mean we shouldn&#8217;t bloody well discourage their use.<\/p>\n<p>Cigarette smoking is a threat to Australian health the government actually gives a damn about.\u00a0 As a result, we have:<\/p>\n<ul>\n<li>High cigarette taxes<\/li>\n<li>Horrific packaging showing health consequences<\/li>\n<li>A ban on advertising<\/li>\n<li>Funding for anti-smoking programs<\/li>\n<\/ul>\n<p>Today Australia is a world leader in the struggle against tobacco mortality and morbidity.\u00a0 There&#8217;s no reason why we couldn&#8217;t eventually earn similar respect in the fields of fighting air pollution and climate change.\u00a0 But by giving fossil fuels a free ride on their externalities, it&#8217;s like our government saying cigarettes should be taxed the same as salad, while the AEMO is saying its goal is to help Australians save as much money on cigarettes as possible.<\/p>\n<p>Coalition politicians who downplay the effects of climate change on bushfire risk are working hard to make sure fossil fuel packaging doesn&#8217;t scare anyone.\u00a0 As they also actively spruik coal power, there&#8217;s definitely no ban on advertising.<\/p>\n<p>I suppose the national Renewable Energy Target is like an anti-smoking program, as it has helped prevent new coal &#8220;smokers&#8221; from being built.\u00a0 Unfortunately, the Abbot government cut the <a href=\"http:\/\/www.cleanenergyregulator.gov.au\/RET\/About-the-Renewable-Energy-Target\/How-the-scheme-works\/Large-scale-Renewable-Energy-Target\" target=\"_blank\" rel=\"noopener noreferrer\">Large-scale Renewable Energy Target<\/a> by 20% and the current Federal government is allowing it to phase out with nothing to replace it.<\/p>\n<h2>The AEMO Can Fight Or Do Nothing While Australians Die<\/h2>\n<p>I see the AEMO as being in a similar position to health officials who, starting in the 70s, could either fight to protect Australians from the health risks of smoking, or follow the easy path of inaction promoted by the tobacco industry and many politicians.\u00a0 While there were those willing to stand by and let existing smokers suffer and die and allow children and teenagers take up an addictive and deadly habit, many chose to fight for our health.\u00a0 They fought to protect children from the dangers of smoking and they succeeded in getting anti-smoking legislation passed.<\/p>\n<p>The AEMO should be no more &#8220;maximise net market benefits&#8221; in a broken system that ignores dangerous externalities than they should be in favour of allowing tobacco companies to sell tax free cigarettes with pictures of ponies on the packets to school children.\u00a0 While I don&#8217;t expect the AEMO to fix the system overnight, I do expect them to fight for a better tomorrow.\u00a0 Their job is not to ignore clear and present dangers to the safety of Australians and the world, any more than it&#8217;s the job of state water services to ignore increasingly dangerous levels of arsenic in the water supply, just so long as they make sure it gets piped around efficiently.<\/p>\n<div id=\"attachment_36169\" style=\"width: 1210px\" class=\"wp-caption alignnone\"><img decoding=\"async\" aria-describedby=\"caption-attachment-36169\" class=\"wp-image-36169 size-full\" src=\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/aemo-evil.jpg\" alt=\"AEMO is evil\" width=\"1200\" height=\"628\" srcset=\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/aemo-evil.jpg 1200w, https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/aemo-evil-300x157.jpg 300w, https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/aemo-evil-1024x536.jpg 1024w, https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/aemo-evil-768x402.jpg 768w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><p id=\"caption-attachment-36169\" class=\"wp-caption-text\">Image credit: Emjay Peacock, age 12. He gets $10 per illustration. Soon he&#8217;ll be able to afford his own P2 mask.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>You would think the middle of a horrendous bushfire season &#8212; at a time when large areas of New South Wales were ablaze and air quality in Sydney was worse than Shanghai thanks to smoke hanging in the air like the ghost of gums before drifting out to sea &#8212; would be a bad time [&hellip;]<\/p>\n","protected":false},"author":10,"featured_media":36168,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[56],"tags":[],"class_list":["post-35691","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics","entry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>AEMO 2020 ISP Supports A Broken Market System That Kills Australians<\/title>\n<meta name=\"description\" content=\"AEMO released their Draft 2020 Integrated System Plan for eastern Australia&#039;s power system.\u00a0As it&#039;s a draft, they can take the evil out before the final plan\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.solarquotes.com.au\/blog\/aemo-2020-isp-evil\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"AEMO Says They Will Support A Broken Market System That Puts Lives In Danger\" \/>\n<meta property=\"og:description\" content=\"AEMO released their Draft 2020 Integrated System Plan for eastern Australia&#039;s power system.\u00a0As it&#039;s a draft, they can take the evil out before the final plan\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.solarquotes.com.au\/blog\/aemo-2020-isp-evil\/\" \/>\n<meta property=\"og:site_name\" content=\"SolarQuotes Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/SolarQuotes\/\" \/>\n<meta property=\"article:published_time\" content=\"2020-01-06T01:19:01+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-01-06T01:47:58+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/01\/aemo2020isp.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"628\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Ronald Brakels\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@BrakelsRonald\" \/>\n<meta name=\"twitter:site\" content=\"@solar_quotes\" \/>\n<script type=\"application\/ld+json\" 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