Shh! – Misconceptions About Placing a Price on Carbon Dioxide You Won’t Hear About

Posted on Sat 02/12/2011 by


Here in Australia, the Labor Government under Prime Minister Julia Gillard is seeking to impose a ‘Price on Carbon’.

Some of you may think that this is exclusively an Australian problem, but the same applies everywhere something of this nature is going through  the processes of implementation.

There are many misconceptions about placing a price on Carbon Dioxide (CO2) emissions, and what I hope to do here is to explain some of those things, because the bland term ‘A Price On Carbon’ is easy to understand, while what it actually means is almost impossible to try and explain.

The single most difficult thing to even attempt to explain is just how much money something like this will raise for Governments who introduce it, and that is what is most definitely not being explained to people, because if it was, then people would see it for exactly what it is, nothing more than a new revenue raising tax, and a whopping great huge tax at that.

When one side of politics explains it as a huge new tax, the impression fostered by the media is that they are saying this just because they oppose anything proposed by an incumbent Government. Those people who support the side of politics who are attempting to introduce it again believe emphatically that the huge new tax mantra is just that, an attempt to take a political standpoint.

So, how much money will this raise for a Government seeking to impose something like this.

Because this is most current here in Australia, I’ll just do the workup for Australia.

$24 Billion.

See just how ridiculous that sounds?

When I worked it out, (and it was a relatively easy thing to do, provided you have an idea what to use to work it out) I was reluctant to commit it to a Post, because it just sounds so outrageous. However, once having committed, everything since then has proved those figures correct.

To this day, people look at me like I’m crazy when I mention it, and almost immediately it’s discounted as being wrong.

That’s because with something like this, the numbers are just so huge to start with that it’s a very easy thing to not believe it, because people just have no concept of what actually is being emitted, and if those numbers are so huge, people find it difficult to believe.

So, how then do I arrive at that figure of $24 Billion.

To explain it, you need to understand a few things that again, are almost impossible to comprehend.

Every step in building it up contains points that an average person would conceive as impossible to believe.

An average large scale coal fired power plant of around 2000MW Nameplate Capacity burns crushed coal in a critical furnace. The heat generated from this critical furnace boils huge amounts of water to high temperature, high pressure steam. That steam drives a huge multi stage turbine, which in turn drives the generator which produces the electrical power.

That generator can weigh anything up to 400 tons, and it must spin at a constant speed of 3000 RPM. (That’s here in Australia where our power is provided at 50 Hertz, or cycles per second, while in the US it is 3600RPM for their power which is at 6o Hertz)

That’s 400 tons of generator (and its driving turbine added to that huge weight again) revolving 50 times each single second. Snap your fingers and then snap them again immediately. 400 tons will have revolved 50 times in those two snaps.

To achieve that, an immense amount of steam is required. To provide that steam an immense amount of heat is required. To provide that heat an immense amount of crushed coal must be burnt in that critical furnace.

On average, that large scale coal fired power plant burns 6 million tons of coal each and every year. That’s around one ton of coal every five and a quarter seconds, and read that again. One ton – 5.25 seconds.

To keep the burn going, air is forced into the furnace at a huge rate.

As the coal burns off, a typical chemical reaction takes place and the Carbon in the Coal joins with Oxygen from the air to produce CO2.

One atom of Carbon joins with 2 atoms of Oxygen. As you learned in your first year of High School Science, when your teacher explained the first few elements on that Periodic Table of Elements, you learned that Oxygen is slightly heavier than Carbon, so joining one atom of Carbon with two atoms of Oxygen more than triples the weight of the original Carbon atom.

This isn’t complex Science, just stuff we all learned once and then forgot over the years.

Because coal is basically all Carbon with other elements in it as well, the multiplier is in fact 2.86.

So, in the burning of one ton of coal, an amount of 2.86 (actual physical) tons of CO2 is produced.

So now, just from that ONE large scale coal fired power plant we have emissions totalling 17.2 million tons of CO2.

See now how impossible that really sounds.

The second impossible point to understand is just how much coal is actually burned here in Australia just to produce electrical power from just those coal fired plants.

That comes in at 90 million tons.

See how impossible that sounds.

Using the 2.86 multiplier we arrive at a figure of just a tick under 260 million tons of CO2.

See how impossible that sounds.

That’s not the end of it. Natural gas fired plants also emit CO2. and as much as people believe that is a considerably lesser amount, it still is around one third the size on a watt for watt basis as coal fired plants.

As those natural gas fired plants are only used to provide power at times of peak consumption, those plants run for considerably less time, which is exactly how they are best designed to do so.

Again, the CO2 emissions from them are also easy to calculate. For every mcf (one thousand cubic feet) of Natural Gas that is burned, 122 Pounds of CO2 are produced.

This comes to around 40 million tons each year, and remember, there’s nowhere near as many of them, and they only run, (typically) for a lot less time.

Now, that gives us a total CO2 emissions, just from the generation of electrical power in the amount of 300 Million tons.

See how impossible that sounds.

Okay, generating electrical power contributes one third of all CO2 emissions, so now the total CO2 emissions from MAN MADE sources here in Australia comes to 900 Million tons.

900 Million tons.

See how impossible that sounds.

Professor Ross Garnaut, the economist (not Scientist) hired by the former Labor Government to produce the original Paper on this said that Australia must introduce a cost on Carbon (and that’s really CO2 Professor) in the amount of $26 per ton.

900 million tons X $26 per ton comes out at a bit under $24 Billion.

$24 Billion.

See how impossible that sounds.

There’s the first of the misconceptions.

There is talk that the amount raised will be used to pay the person in the street enough to cover the increase in their emissions.

Gee, $24 Billion works out at around a bit over $1000 for every man woman and child here in Australia.

Sorry, the Government isn’t that stupid, to raise a huge amount of money and then give it straight back to you, and if they did that, where would the incentive be to cut back on those (perceived) personal emissions.

So they say they will only give back part of it to consumers, and some rumours even suggest as much as half on that personal level

People see that as around $500 per year for every man woman and child, and, well, they could even live with that.

There’s the next misconception. Government’s aren’t stupid you know, and when it comes to a huge pot of money like $24 Billion, there’s no way they’ll be giving back amounts like that. I mean, after all, there’s the next election to win.

So then, let’s ballpark how much they might be giving back.

Keep in mind that at the personal level your emissions amount to your electricity account.

So straight away, instead of the full $24 Billion, we come back to the electricity production amount of that, which is one third.

Now we have $8 Billion.

Electricity is consumed in three sectors, the Residential sector which consumes 38% of all electricity, Commerce 37% and Industrial 24%.

So now, your personal emissions become 38% of that $8 Billion, or around $3 Billion.

The CO2 emitting portion of that comes in at 82.5% so now it comes down even further to $2.475 Billion.

Still seems a lot to be coming back at a personal level.

It’s still not worked out at the total population level. It’s worked out on consumers accounts for consumption, or the amount of electricity your residence uses.

Some people have two, perhaps even more residences, but they can only live in one house at a time, so while there may be more consumers, it’s worked out on your electricity account for the residence where the electricity is being used.

So, there are around 7.5 million consumers.

That works out at around $330 per consumer.

Even if the Government is generous enough to give you back half, it amounts to around $165 per year, and that’s per household residence, not per capita head.

So, even giving back half at that personal level, the Government is foregoing only $1.23 Billion out of the original $24 Billion, so even being really generous, they are still raking in $22.8 Billion.

The next misconception also is at the personal end of the scale.

Every one of those other consumers in the Commerce and Industrial sectors that consume electricity will be passing on their increased costs directly down to the consumers.

That accounts for the one third in the electricity generating area.

In the remaining two thirds of CO2 emissions, the increased costs imposed on them will also be passed directly down to the consumers, so that magnanimous tiny amount the Government will be refunding back to you will not only be eaten up, but it will be only a small fraction of the increased costs you will have to pay, and not just for items that you personally may not use, but in absolutely everything you do.

Those increased costs will also generate a higher amount of GST, hence the Government, while giving you back a small amount will be getting that back, not only all of it, but considerably more as well on top of that.

Another misconception is that introducing this price on Carbon (Dioxide) will drive down emissions.

People will use the electricity that is what is required for a comfortable life in their own home. They won’t go without a fridge, hot water, heating in Winter, Cooling in the Summer, where cooling is an absolute necessity. They won’t walk around in the dark, cook less, be entertained less by TV radio, music, etc. People have a personal choice in all of that, and nothing will MAKE them consume less in their own homes, just because of some perceived obscure environmental cause. While ever electrical power consumption is discretionary, people will use what they always have used. Any minor personal choices that they make will be so minor as to be absolutely inconsequential. Even in those other sectors where power is consumed, changes will NOT be made. So, while the mantra exists that this ‘price on Carbon’ (Dioxide) will act as the spur to drive emissions down, that is a slogan thought up by the Government seeking only to get their grubby hands on a boatload of money.

A further misconception is on the larger scale.

There’s the mantra of specifically aiming this at what Bob Brown and Christine Milne (Australian Greens Party Senators) label as the big polluters.

Okay then let’s look at that.

That original big emitter of CO2, that ONE large scale power plant. It burns 6 Million tons of CO2, and emits 17.2 million tons of CO2.

At the Professor Ross Garnaut figure of $26 per ton, their bottom line now sees an additional outgoing amount of just under $450 Million. If you seriously believe even a large scale operation like that can handle an extra almost half a Billion Dollars, you are seriously deluded, and if Bob and Christine are not aware of that, then they are, well…..

No, those big emitters will be passing down every dollar to the consumers in every area. The Gillard Government sees this, (even while not telling the people about the all up total) and will legislate specifically so those so called ‘big emitters’ can pass those costs down to consumers, and that will make Bob and Christine scream blue bloody murder, and their supporters will rail with them, without having been told by Bob and Christine what it actually means, or the huge amount of money being made from all this.

There’s where the Gillard Government will have trouble introducing this legislation, because they will only have their own people in favour of it. The (Conservative Parties) Opposition and the Greens will vote against it in the Senate, but that’s moot really, because I feel sure Bob and Christine will do some sort of backroom deal with the Government to ensure passage of the legislation.

So, while all the talk is of the ‘absolute necessity’ for introducing a ‘price on Carbon’ (Carbon Dioxide people, CO2) there is no talk of how much it means to them.

No Professor Garnaut has paved the way.

Now Professor Tim Flannery has been hired, (to the tune of $180,000 per year, on a part time basis only) to sell it to the public.

Someone needs to be asking the one pertinent question in all this, and asking it of everyone.

How much money will the Government be making from this.

No, you won’t hear that question, and you most definitely will not be hearing the answer.

The government is relying on the fact that no one knows how to work it all out, and then come at a figure that sounds so ridiculous, it then becomes very easy to not believe, thus easy to scoff at, dismiss out of hand, discount as not factual, or as is usually the case, change the subject.

$24 Billion. That’s 24 Thousand Million Dollars, $24,000,000,000.

See how impossible that all sounds.

Incidentally, at that $26 per ton, the figure for the U.S. comes in at around $280 Billion.

The figure for China comes in at around $400 Billion, but gee, they’ll never be introducing anything like this.

So, when Governments say that for the sake of the Environment, we need to put a ‘price on Carbon’ (Dioxide) they are flat out lying.

This has nothing whatsoever to do with the Environment.

It’s just about the money.