Geoscience Reference
In-Depth Information
Figure 5: Australia's electricity generation technology shares, 550 ppm scenario
Source: Alan Moran
Critical in estimating the costs is the CO
2
price necessary to drive the changes. This
depends on the ease of substituting carbon emitting energy for other forms of energy or
replacing energy by other goods and services. If the necessary tax were as low as $100 per
tonne, this would treble Australia's wholesale electricity price. Figure 6 illustrates this for
Australian electricity supplies.
The only experience of that sort of price shock, which is far less than the IPCC
considers necessary, was the quadrupling of oil prices during the 1970s.
However, that brought moderating effects through substitutions from oil to coal and
gas and it led to increased oil discoveries. Climate change policy would prevent similar
developments.
