Hazy emissions

Tim Colebatch's article on the Turnbull/Xenophon/Frontier Economics emissions trading scheme discusses some interesting points. Particularly the bit about whether increasing the price of electricity is going to be more effective at reducing emissions than giving away free permits to polluters. In the governments scheme higher electricity prices would reduce demand (depending on elasticity) and provide a slightly less un-level playing field for solar and wind etc. The Frontier Economics scheme reasons that free permits will allow the coal generators to use the money they would have spent on permits to make long-term investments in new technology.

I'm not convinced that private enterprise has the capacity to make large long-term investments when the market hasn't so far shown much ability to price in the future effects of climate change. In my opinion quicker results would be seen by increasing electricity prices, and spreading the incentives to either reduce wastage or invest in distributed clean generation. Factoring in the costs of carbon pollution would allow clean technologies to be more competitive sooner. Favoring large scale solutions have concentrated investment into dirty coal powered fire stations located along way from where the energy is used making things like Trigeneration impractical.