WEBVTT 1 00:00:00.000 --> 00:00:04.060 Good afternoon and welcome to this session of the Adelaide Festival Ideas. 2 00:00:04.500 --> 00:00:09.100 Can a carbon price save us from catastrophic climate change? 3 00:00:09.700 --> 00:00:12.060 It's price we said, not tax, but there we go. 4 00:00:12.260 --> 00:00:14.060 A couple of housekeeping details. 5 00:00:14.200 --> 00:00:18.460 Please turn off your mobile phone or turn off the ringer if you haven't already done so. 6 00:00:18.500 --> 00:00:21.280 If you want to tweet silently, you can do so. 7 00:00:21.320 --> 00:00:25.180 The hashtag for the Festival Ideas is hashASOI. 8 00:00:25.180 --> 00:00:32.000 And please feel free to tweet away, but without the ringer on. 9 00:00:32.380 --> 00:00:35.920 My name's Peter Mayers. I present the national interest on ABC Radio National. 10 00:00:36.100 --> 00:00:40.040 I'm also a member of the advisory panel to the Adelaide Festival of Ideas. 11 00:00:40.380 --> 00:00:44.000 And it's a great pleasure to welcome you to this event, 12 00:00:44.140 --> 00:00:48.000 which is supported by the Department of Primary Industries and Resources, SA, 13 00:00:48.200 --> 00:00:51.360 and by the Hawke Centre at the University of South Australia. 14 00:00:52.200 --> 00:00:54.100 Now, there is a reason for the word... 15 00:00:54.100 --> 00:00:55.160 I'm going to introduce our guest. 16 00:00:55.180 --> 00:00:56.320 I'm going to introduce our guest in a moment, so don't worry. 17 00:00:56.540 --> 00:01:00.920 There is a reason for the word catastrophic in the title of this session. 18 00:01:01.060 --> 00:01:04.540 Scientists say that significant climate change is already locked in 19 00:01:04.540 --> 00:01:09.080 because of the amount of carbon dioxide and other greenhouse gases we've put in the air. 20 00:01:09.400 --> 00:01:12.000 The target set by world leaders at Cancun 21 00:01:12.000 --> 00:01:15.840 was to limit average global temperature rises to 2 degrees Celsius. 22 00:01:16.140 --> 00:01:19.420 Now, that's a disastrous enough outcome in itself. 23 00:01:19.500 --> 00:01:22.480 It will mean far more very extreme... 24 00:01:22.480 --> 00:01:24.380 Because it will be felt at the extremes. 25 00:01:25.180 --> 00:01:28.460 It will mean temperature days for a town like Adelaide, 26 00:01:28.540 --> 00:01:29.840 bushfire days, et cetera. 27 00:01:30.020 --> 00:01:32.580 We'll be lucky to save the Barrier Reef and so on. 28 00:01:32.740 --> 00:01:36.660 But we're nowhere near achieving that 2% target at the moment. 29 00:01:36.760 --> 00:01:40.100 We're heading far more likely to 4% average global warming 30 00:01:40.100 --> 00:01:41.060 by the end of the century. 31 00:01:41.300 --> 00:01:43.640 And that's where we start talking about catastrophic. 32 00:01:45.160 --> 00:01:47.580 And that is what, for some of us, 33 00:01:47.660 --> 00:01:51.140 makes climate change the great moral issue of our times. 34 00:01:52.320 --> 00:01:54.820 Legislation to put a price on carbon in Australia 35 00:01:55.180 --> 00:01:56.280 is making its way through the parliament. 36 00:01:56.460 --> 00:01:58.920 If it becomes law, then from July next year, 37 00:01:58.960 --> 00:02:01.360 major emitters will pay $23 a tonne 38 00:02:01.360 --> 00:02:03.820 for every tonne of carbon dioxide put into the atmosphere. 39 00:02:04.040 --> 00:02:06.840 So is this a good first step in the right direction, 40 00:02:06.960 --> 00:02:09.060 or is it too little too late? 41 00:02:09.820 --> 00:02:12.700 And to discuss these issues, I'm joined by three guests. 42 00:02:13.220 --> 00:02:16.580 Our first guest is Michael Schellenberger on the far end from me. 43 00:02:16.700 --> 00:02:20.080 He's the president and co-founder of the Breakthrough Institute in Oakland, California. 44 00:02:20.580 --> 00:02:23.980 He's been named a Hero of the Environment by Time magazine in 2008. 45 00:02:25.180 --> 00:02:27.200 Together with his colleague Ted Nordhaus, 46 00:02:27.720 --> 00:02:29.140 who's also here at the festival, 47 00:02:29.320 --> 00:02:31.080 Michael Schellenberger has written two books 48 00:02:31.080 --> 00:02:34.540 that have shaken up environmental politics in the United States. 49 00:02:34.740 --> 00:02:36.840 The first one was called The Death of Environmentalism. 50 00:02:36.880 --> 00:02:38.800 The second one is called Breakthrough, 51 00:02:38.840 --> 00:02:42.700 from the Death of Environmentalism to the Politics of Possibility. 52 00:02:42.880 --> 00:02:45.840 And both books argue against apocalyptic rhetoric 53 00:02:45.840 --> 00:02:52.920 in favour of an aspirational approach to tackling problems. 54 00:02:53.060 --> 00:02:55.160 A discourse of apocalypse, 55 00:02:55.180 --> 00:02:58.100 a discourse of a positive future by making clean energy cheap. 56 00:02:59.300 --> 00:03:00.980 Mina Ghouli, our second guest, 57 00:03:01.080 --> 00:03:04.840 is executive director, chief investment officer and co-founder of Peony Capital. 58 00:03:05.080 --> 00:03:08.380 It's a Beijing-based company dedicated to reducing greenhouse gas emissions. 59 00:03:08.780 --> 00:03:11.380 She has degrees in law and science, 60 00:03:11.580 --> 00:03:16.600 and she's studied global leadership at the Harvard Kennedy School of Government. 61 00:03:16.840 --> 00:03:20.260 She's also engaged in a lot of non-government activity, 62 00:03:20.420 --> 00:03:21.720 particularly around issues of water, 63 00:03:21.860 --> 00:03:25.160 and with things like 64 00:03:25.180 --> 00:03:26.620 the OneWoo initiative, 65 00:03:26.760 --> 00:03:28.140 which is an Australian government initiative 66 00:03:28.140 --> 00:03:32.740 to introduce Australian firms to Chinese eco-projects and funding opportunities. 67 00:03:33.320 --> 00:03:37.520 And our third guest is one of Australia's leading experts on renewable energy, 68 00:03:37.800 --> 00:03:38.900 Dr Mark Diesendorf. 69 00:03:39.100 --> 00:03:41.700 He's a physicist and an applied mathematician. 70 00:03:41.980 --> 00:03:44.280 He's associate professor and deputy director 71 00:03:44.280 --> 00:03:47.200 of the Institute for Environmental Studies at the University of New South Wales. 72 00:03:47.420 --> 00:03:50.300 And he's been a principal research scientist at CSIRO, 73 00:03:51.040 --> 00:03:55.040 professor of environmental science and sustainable futures, 74 00:03:55.060 --> 00:03:55.160 and he's been a professor of environmental science and sustainable futures, 75 00:03:55.160 --> 00:03:58.260 at University of Technology in Sydney. 76 00:03:58.600 --> 00:04:01.120 He's president of the Australasian Wind Energy Association, 77 00:04:01.160 --> 00:04:02.620 and he's written several books as well, 78 00:04:02.660 --> 00:04:04.800 including this latest one, Climate Action, 79 00:04:04.920 --> 00:04:07.140 a campaign manual for greenhouse solutions. 80 00:04:07.220 --> 00:04:08.960 Please join me in welcoming our guests. 81 00:04:11.780 --> 00:04:14.360 We're going to run this session as a discussion, 82 00:04:14.500 --> 00:04:16.360 as a conversation between the four of us. 83 00:04:16.440 --> 00:04:18.740 There are some very different points of view on the panel. 84 00:04:18.860 --> 00:04:21.680 At some point during the conversation, 85 00:04:21.800 --> 00:04:23.520 I'll invite you to come to the microphones 86 00:04:23.520 --> 00:04:25.080 to add your 10 cents. 87 00:04:25.160 --> 00:04:26.440 But our question is, 88 00:04:26.500 --> 00:04:30.080 can a carbon price save us from catastrophic global warming? 89 00:04:30.180 --> 00:04:32.120 So I'm going to put that question first to Michael Schellenberger. 90 00:04:32.180 --> 00:04:32.380 Michael. 91 00:04:32.780 --> 00:04:34.100 Great. Well, thanks very much, 92 00:04:34.160 --> 00:04:37.000 and I'd like to thank the festival organizers for inviting us here. 93 00:04:37.100 --> 00:04:39.020 It's really a very exciting festival, 94 00:04:39.160 --> 00:04:41.900 and I'm really happy to engage in this conversation. 95 00:04:42.480 --> 00:04:44.180 I think a little bit of background is helpful. 96 00:04:45.440 --> 00:04:48.020 We know a lot about the transition 97 00:04:48.020 --> 00:04:50.820 to cleaner and cleaner sources of energy over time. 98 00:04:51.480 --> 00:04:54.280 Overwhelmingly, human societies go from wood and dung 99 00:04:54.280 --> 00:04:58.480 to coal to natural gas, nuclear renewables. 100 00:04:58.720 --> 00:05:00.920 And these transitions tend to take a long time. 101 00:05:01.060 --> 00:05:04.920 And they tend to happen where societies are willing to invest 102 00:05:04.920 --> 00:05:07.640 a little bit more money for cleaner sources of energy. 103 00:05:07.980 --> 00:05:12.940 But they haven't happened by making the older sources of energy more expensive. 104 00:05:13.320 --> 00:05:15.760 And in fact, that's consistent with a whole set of other technologies. 105 00:05:15.920 --> 00:05:20.000 We didn't get computers by putting a tax on typewriters. 106 00:05:20.660 --> 00:05:24.260 We didn't get the internet through a tax on computers. 107 00:05:24.280 --> 00:05:26.960 We didn't get the internet through a tax on telegraphs or telexes or fax machines. 108 00:05:27.300 --> 00:05:31.660 We get new technologies by investing directly in their development. 109 00:05:32.100 --> 00:05:35.520 And that's the way it'll happen as we move to clean energy as well. 110 00:05:35.720 --> 00:05:37.960 So to the extent to which a carbon tax is helpful or not, 111 00:05:38.200 --> 00:05:40.620 it's helpful to raise the revenue that's needed 112 00:05:41.280 --> 00:05:46.240 to fund the technology innovation to make clean energy technologies a lot cheaper. 113 00:05:46.920 --> 00:05:48.440 And a lot of people say, 114 00:05:48.560 --> 00:05:53.220 well, maybe you'll incentivize that move if you make fossil energy more expensive. 115 00:05:53.220 --> 00:05:56.200 The problem is that there's no society anywhere in the world 116 00:05:56.200 --> 00:05:59.560 that's willing to make fossil fuels so much more expensive 117 00:05:59.560 --> 00:06:02.580 so that clean energy becomes cost competitive. 118 00:06:03.220 --> 00:06:06.620 Solar is three to five times more expensive than natural gas, 119 00:06:06.880 --> 00:06:08.720 much more expensive even than coal. 120 00:06:09.300 --> 00:06:12.620 Wind power about 50% more expensive than natural gas. 121 00:06:14.380 --> 00:06:19.100 Societies are not willing to increase the cost of energy by that amount 122 00:06:19.100 --> 00:06:22.360 because it would have such a strong impact on the economy. 123 00:06:22.600 --> 00:06:23.200 So, I think that's the problem. 124 00:06:23.220 --> 00:06:25.020 So what you see with the Australian carbon proposal 125 00:06:25.540 --> 00:06:28.500 is a proposal that would put a very low price on carbon, 126 00:06:28.580 --> 00:06:32.360 too low to result in much change to the energy infrastructure. 127 00:06:32.680 --> 00:06:34.780 You might get a small switch to natural gas, 128 00:06:35.000 --> 00:06:36.580 a switch that might happen anyway. 129 00:06:37.000 --> 00:06:38.420 And if you look around the world, 130 00:06:39.080 --> 00:06:42.040 you'll see that those places that do have a price on carbon, 131 00:06:42.180 --> 00:06:45.240 there's literally no measurable impact of that price. 132 00:06:45.560 --> 00:06:50.800 The two countries that have pretty rapidly moved to clean sources of energy 133 00:06:50.800 --> 00:06:52.340 in a short period of time, 134 00:06:52.340 --> 00:06:55.820 really at a timeline consistent with dealing with global warming, 135 00:06:55.980 --> 00:06:57.160 are France and Sweden. 136 00:06:57.340 --> 00:07:01.600 And they did that by directly deploying low carbon sources of energy, 137 00:07:01.860 --> 00:07:04.420 namely nuclear power and hydroelectric. 138 00:07:04.960 --> 00:07:09.960 What you don't see are countries that are willing to increase the cost of fossil fuels enough 139 00:07:09.960 --> 00:07:11.820 to make clean energy cheap. 140 00:07:12.100 --> 00:07:15.280 So, carbon tax might be useful to help pay for it, 141 00:07:15.320 --> 00:07:17.380 in itself it's not going to have much of an impact. 142 00:07:17.900 --> 00:07:22.320 Okay, Meena Guli, how do you see the carbon price or carbon tax given? 143 00:07:22.320 --> 00:07:24.740 That you're engaged in the business, I think, 144 00:07:24.740 --> 00:07:29.480 of promoting clean carbon initiatives in China. 145 00:07:29.880 --> 00:07:30.320 Right. 146 00:07:30.660 --> 00:07:34.360 First of all, thank you very much for the invitation to come and speak here. 147 00:07:34.560 --> 00:07:36.900 It's an enormous pleasure to come, 148 00:07:36.960 --> 00:07:40.280 not only to talk to a bunch of people interested in new ideas, 149 00:07:40.520 --> 00:07:42.180 but also to be here in Adelaide. 150 00:07:42.320 --> 00:07:43.580 I'm based up in China. 151 00:07:43.760 --> 00:07:44.660 I'm in Beijing. 152 00:07:44.940 --> 00:07:47.260 At the moment it's nice weather, but it's not usually. 153 00:07:47.580 --> 00:07:50.640 It's usually polluted and I run a lot, 154 00:07:50.760 --> 00:07:52.300 so I'm out in the pollution. 155 00:07:52.300 --> 00:07:53.980 It's a polluted atmosphere breathing in a lot of coal dust 156 00:07:53.980 --> 00:07:55.900 and coughing up my lungs. 157 00:07:55.980 --> 00:07:58.160 So, it's a great pleasure to be here breathing in the fresh air. 158 00:07:59.980 --> 00:08:02.860 In terms of the answer to your question, 159 00:08:03.560 --> 00:08:07.180 can a carbon price save us from catastrophic global warming? 160 00:08:07.720 --> 00:08:09.940 I think it's one of the things that can help, 161 00:08:10.000 --> 00:08:12.840 but I think by no means is it the only thing. 162 00:08:13.360 --> 00:08:15.160 And what do I mean by that? 163 00:08:15.360 --> 00:08:17.420 I think that there are two parts to this. 164 00:08:17.960 --> 00:08:21.280 The first is McKinsey did a cost curve analysis, 165 00:08:22.300 --> 00:08:23.740 looking at the different kinds of activities 166 00:08:23.740 --> 00:08:25.700 that we could do in Australia, 167 00:08:25.900 --> 00:08:29.020 but also around the world at different prices of carbon. 168 00:08:29.280 --> 00:08:33.160 And what they identified was that there were a large number of activities 169 00:08:33.160 --> 00:08:37.260 that we could do which had very little impact 170 00:08:37.260 --> 00:08:41.560 in a cost basis on our society. 171 00:08:42.340 --> 00:08:46.680 And in many respects, some of those activities would earn money. 172 00:08:47.180 --> 00:08:49.680 And I've got to tell you, in China now, 173 00:08:49.920 --> 00:08:52.280 there are a lot of activities that are going on 174 00:08:52.300 --> 00:08:55.340 where they don't have a carbon price, by the way, 175 00:08:55.500 --> 00:08:58.180 which are improving the energy efficiency 176 00:08:58.180 --> 00:09:02.580 and improving energy use in a vast number of factories all over China. 177 00:09:03.240 --> 00:09:05.620 So, I guess one of the questions I have is, 178 00:09:05.700 --> 00:09:08.740 is a carbon price really going to tip us towards adopting 179 00:09:08.740 --> 00:09:12.000 those kinds of technologies and improving energy efficiency 180 00:09:12.000 --> 00:09:13.860 when we're not doing it already, 181 00:09:14.060 --> 00:09:17.000 even though it would make those companies money? 182 00:09:17.780 --> 00:09:19.600 So, this is things like saving energy, 183 00:09:19.660 --> 00:09:21.500 simply more efficient production processes, 184 00:09:21.500 --> 00:09:23.740 thereby reducing your fuel bills, that sort of thing. 185 00:09:23.920 --> 00:09:24.480 Absolutely right. 186 00:09:24.600 --> 00:09:27.000 So, for example, there are a bunch of different things 187 00:09:27.000 --> 00:09:28.500 you can do in the manufacture of steel 188 00:09:28.500 --> 00:09:31.860 to use the waste heat that is generated in the steel production. 189 00:09:32.240 --> 00:09:35.600 In cement, there's also waste heat recovery projects that you can do. 190 00:09:35.740 --> 00:09:38.760 So, there's a variety of different ways that you can use energy more efficiently. 191 00:09:39.100 --> 00:09:41.780 And if you reduce your demand for energy, 192 00:09:41.920 --> 00:09:43.820 you can then increase your cost saving. 193 00:09:44.700 --> 00:09:47.020 The second part that I wanted to raise, 194 00:09:47.080 --> 00:09:48.660 I guess, put on the table for conversation, 195 00:09:49.320 --> 00:09:51.480 is something I'm very aware of, again, in China, 196 00:09:51.480 --> 00:09:54.440 which is the world's biggest emitter of greenhouse gases. 197 00:09:54.500 --> 00:09:57.700 It represents about 23% of the world's greenhouse gases. 198 00:09:58.380 --> 00:10:00.900 Australia represents less than 1.5%. 199 00:10:01.680 --> 00:10:04.160 So, I guess my question for Australia and for Australians, 200 00:10:04.260 --> 00:10:05.360 all of you sitting here, is, 201 00:10:05.380 --> 00:10:07.880 do you really think that a carbon price in this country 202 00:10:07.880 --> 00:10:10.500 is going to save you from catastrophic global warming? 203 00:10:10.940 --> 00:10:15.140 And I guess my point is that, you know, China, 23%, 204 00:10:15.140 --> 00:10:17.180 Australia, 1.5% or less. 205 00:10:18.280 --> 00:10:19.880 China is going to triple its GDP. 206 00:10:20.980 --> 00:10:21.460 Okay. 207 00:10:21.480 --> 00:10:24.980 It's going to triple its GDP not by today or tomorrow or 2050, 208 00:10:25.340 --> 00:10:26.020 by 2020. 209 00:10:26.460 --> 00:10:27.700 That's 10 years from now. 210 00:10:28.040 --> 00:10:28.440 Okay. 211 00:10:28.500 --> 00:10:30.600 It's going to go from 4,000 to 12,000 GDP. 212 00:10:31.180 --> 00:10:34.320 It's adding a coal-fired power station every single week. 213 00:10:34.960 --> 00:10:35.440 Okay. 214 00:10:35.460 --> 00:10:39.880 Every year, it adds twice the installed capacity of the Australian grid. 215 00:10:41.020 --> 00:10:45.160 So, those are, it's quite hard to kind of get your mind around some of these figures. 216 00:10:45.280 --> 00:10:47.320 But the changes in China are astronomical. 217 00:10:47.800 --> 00:10:50.940 And China is taking action, as I said earlier, 218 00:10:50.940 --> 00:10:52.600 not just because of carbon price. 219 00:10:52.680 --> 00:10:53.300 They don't have one. 220 00:10:53.520 --> 00:10:56.460 China is not taking action because of the Kyoto Protocol. 221 00:10:56.940 --> 00:10:59.660 China is not taking action because of international pressure 222 00:10:59.660 --> 00:11:01.520 or backroom dealings around Cancun. 223 00:11:01.780 --> 00:11:04.320 China is taking action because it makes sense for China 224 00:11:04.320 --> 00:11:08.660 to be more energy efficient and to rely less on foreign sources of fuel 225 00:11:08.660 --> 00:11:10.740 to power its future generation. 226 00:11:11.360 --> 00:11:13.840 So, I guess what my question would be, 227 00:11:13.900 --> 00:11:18.040 are we really focusing on the right thing by talking about a carbon price or a carbon tax? 228 00:11:18.040 --> 00:11:21.740 And instead, should we be talking about how to work with China 229 00:11:21.740 --> 00:11:27.840 to shift their economy and to save them also from catastrophic global warming? 230 00:11:28.000 --> 00:11:31.460 And my question is, can we save ourselves without saving the world? 231 00:11:32.340 --> 00:11:33.420 Okay. Thank you, Mina. 232 00:11:33.900 --> 00:11:34.900 Mark Diesendorf. 233 00:11:36.040 --> 00:11:41.100 Well, the purpose of a carbon price is to make dirty technologies and industries more expensive 234 00:11:42.040 --> 00:11:46.620 so that there can be, to encourage a shift in economic structure in a nation 235 00:11:46.620 --> 00:11:51.080 towards a cleaner set of technologies and industries. 236 00:11:51.400 --> 00:11:59.060 Now, in particular, I think the key signal that can be sent by even quite a small carbon price, 237 00:11:59.320 --> 00:12:05.580 which is totally inadequate to make the transition to a clean energy future, 238 00:12:05.660 --> 00:12:10.360 but even a small carbon price sends a signal to would-be investors 239 00:12:10.360 --> 00:12:15.760 in dirty coal-fired power stations that they would be taking an enormous risk. 240 00:12:15.920 --> 00:12:16.600 To me, that's the question. 241 00:12:16.620 --> 00:12:18.040 To me, that is the greatest benefit. 242 00:12:18.360 --> 00:12:19.820 There are other benefits. 243 00:12:20.860 --> 00:12:26.140 I mean, basically, a carbon price is simply including costs 244 00:12:26.140 --> 00:12:30.640 that we are already experiencing in other areas of the economy, 245 00:12:30.820 --> 00:12:34.440 health costs, environmental costs and economic costs 246 00:12:34.440 --> 00:12:36.500 as a result of burning fossil fuel. 247 00:12:36.720 --> 00:12:41.840 And all that's doing is internalising those costs in the price of fossil fuels. 248 00:12:42.060 --> 00:12:44.860 So it's not some sort of additional thing. 249 00:12:44.860 --> 00:12:49.220 It needs to be part of the solution. 250 00:12:51.560 --> 00:12:55.420 Now, my view is, therefore, that a carbon price is necessary, 251 00:12:55.980 --> 00:13:02.420 but I would also agree with the other speakers that it is totally insufficient on its own. 252 00:13:03.080 --> 00:13:06.320 Unfortunately, in Australia, we have economic fundamentalists 253 00:13:06.860 --> 00:13:09.340 who seem to think that all you have to do is get the price right. 254 00:13:09.520 --> 00:13:13.820 But the realistic situation is that we have an imperfect market. 255 00:13:13.820 --> 00:13:17.840 Putting on a carbon price won't drive energy efficiency 256 00:13:17.840 --> 00:13:22.760 because there's a huge amount of cost-effective energy efficiency 257 00:13:22.760 --> 00:13:28.600 that isn't being implemented, as Mina said, using the McKinsey study. 258 00:13:29.420 --> 00:13:32.220 The barriers there are market failures. 259 00:13:32.500 --> 00:13:36.100 You know, it's not in the interests of both the landlords and the tenants 260 00:13:36.100 --> 00:13:39.540 to make a house more energy efficient. 261 00:13:40.160 --> 00:13:43.800 It's not in my interest to put a solar on the market. 262 00:13:43.800 --> 00:13:46.320 It's not in my interest to put a hot water heater on my tenant's house 263 00:13:46.320 --> 00:13:50.600 because he's going to get the lower fuel bills, not me. 264 00:13:50.860 --> 00:13:55.780 And similarly with infrastructure, we desperately need new railways, 265 00:13:55.920 --> 00:14:00.580 both within cities and high-speed rail between cities in this country. 266 00:14:00.720 --> 00:14:03.640 We're far behind many so-called third-world countries. 267 00:14:03.880 --> 00:14:06.780 We need new transmission lines for renewable energy. 268 00:14:07.100 --> 00:14:12.440 But they don't arise from the primeval ooze just by having a carbon price. 269 00:14:12.580 --> 00:14:13.780 But the most important thing is that we have a carbon price. 270 00:14:13.800 --> 00:14:18.700 And the most important issue, I think, is that a carbon price on its own 271 00:14:18.700 --> 00:14:22.120 only brings the next cheapest technology on board. 272 00:14:22.380 --> 00:14:27.040 It's next year's technology, which is natural gas replacing coal. 273 00:14:27.240 --> 00:14:29.060 But we're not planning for next year. 274 00:14:29.200 --> 00:14:33.640 We need to plan for the next 20, 30, 50 years and forever. 275 00:14:33.860 --> 00:14:38.840 And that means, I believe, making a shift to a renewable energy future, 276 00:14:38.960 --> 00:14:40.680 which is also energy efficient. 277 00:14:40.800 --> 00:14:43.580 And a carbon price on its own can't do that. 278 00:14:43.800 --> 00:14:46.360 But combined with a range of other policies, 279 00:14:46.520 --> 00:14:51.120 which I hope we'll discuss later in this session, we can do it. 280 00:14:51.420 --> 00:14:55.740 And I believe we can move to 100% renewable energy in this country. 281 00:14:55.900 --> 00:14:57.500 We've certainly got the technologies. 282 00:14:57.820 --> 00:15:01.640 And the main barriers are no longer technological or even economic, 283 00:15:01.880 --> 00:15:06.620 but they are in our institutions and the politics of the situation. 284 00:15:07.140 --> 00:15:10.320 OK, so it sounds like all three of you to a large extent agree 285 00:15:10.320 --> 00:15:13.700 that while a carbon price might be useful in setting some signals, 286 00:15:13.800 --> 00:15:16.520 in raising some money, it's not going to do it on its own. 287 00:15:16.880 --> 00:15:19.480 As Mark just said, here in Australia, the debate is, 288 00:15:19.620 --> 00:15:22.560 and if you read the sort of Productivity Commission reports, 289 00:15:22.760 --> 00:15:25.160 the debate is the carbon price should be the thing. 290 00:15:25.460 --> 00:15:26.940 That should be the mechanism. 291 00:15:27.580 --> 00:15:30.400 And we should get rid of other sorts of subsidies 292 00:15:30.400 --> 00:15:33.040 for rooftop solar power and other sorts of incentives. 293 00:15:33.920 --> 00:15:36.840 But if the carbon price isn't going to do it on its own 294 00:15:36.840 --> 00:15:40.920 and what we need is a dramatic shift to cleaner technologies, 295 00:15:41.740 --> 00:15:43.700 Michael, that still has to be paid for. 296 00:15:43.800 --> 00:15:46.720 So who pays for it? How do you fund it? 297 00:15:47.060 --> 00:15:50.400 Yeah, well, I mean, obviously you could pay for it out of the general treasury. 298 00:15:51.200 --> 00:15:57.800 We like the idea of having today's energy pay for tomorrow's energy. 299 00:15:58.100 --> 00:16:02.460 So I think a reasonable fee on coal mining, for example, in Australia, 300 00:16:02.720 --> 00:16:04.580 I think you could have a much lower cost 301 00:16:05.460 --> 00:16:08.620 if that money was safeguarded just for technology innovation. 302 00:16:08.920 --> 00:16:12.860 Right now, unfortunately, legislation that will be voted on next week 303 00:16:12.860 --> 00:16:16.560 includes all sorts of money for offsets and all sorts of other measures 304 00:16:16.560 --> 00:16:20.640 which are really loopholes and ways around actually dealing with 305 00:16:20.640 --> 00:16:23.600 this fundamental shift of infrastructure over time. 306 00:16:24.560 --> 00:16:29.060 So, you know, in the United States, really at a cost of about $100 per person, 307 00:16:29.240 --> 00:16:31.920 you can raise $30 billion a year. 308 00:16:32.100 --> 00:16:36.300 That would increase our energy R&D budgets from about $4 billion a year. 309 00:16:36.480 --> 00:16:41.800 And it would be about the level that we invest in health and biomedical research. 310 00:16:42.180 --> 00:16:43.680 It's a basic investment we make. 311 00:16:43.720 --> 00:16:46.340 We don't say, you know, we haven't discovered a cure for cancer, 312 00:16:46.460 --> 00:16:48.360 let's stop investing in health R&D. 313 00:16:48.560 --> 00:16:51.240 There's sort of a public good here that needs to be invested in. 314 00:16:51.240 --> 00:16:53.520 Okay, $100 a year per person, it's not very much, 315 00:16:53.640 --> 00:16:56.420 but Obama can't get any tax increases through. 316 00:16:56.580 --> 00:16:59.200 I mean, you know, the politics of tax in America is such 317 00:16:59.200 --> 00:17:02.540 that even $100 a year is kind of pie in the sky, isn't it? 318 00:17:02.560 --> 00:17:05.240 Yeah, I mean, the other possibility is that, frankly, right now, 319 00:17:05.240 --> 00:17:08.540 we subsidise energy in the same way that we subsidise crop supports. 320 00:17:08.860 --> 00:17:11.780 We subsidise agricultural production. 321 00:17:11.800 --> 00:17:14.580 In the same way we subsidise wind and solar. 322 00:17:14.680 --> 00:17:16.260 We're subsidising yesterday's technologies. 323 00:17:16.840 --> 00:17:19.320 We need to do much more what the Defence Department did 324 00:17:19.320 --> 00:17:23.820 when it was constantly purchasing on the bleeding edge of microchips, 325 00:17:23.940 --> 00:17:24.960 jet turbines. 326 00:17:25.620 --> 00:17:29.540 All of the technologies in your iPhone came out of Defence Department procurement. 327 00:17:30.220 --> 00:17:32.560 And now you see a couple of Republican senators, 328 00:17:32.740 --> 00:17:35.380 Senator Murkowski, Senator Lamar Alexander, 329 00:17:35.680 --> 00:17:37.500 who are saying, really, we should take those subsidies 330 00:17:37.500 --> 00:17:40.580 that we're currently spending on, for example, wind turbines 331 00:17:40.580 --> 00:17:41.780 that are 20 years old, 332 00:17:41.800 --> 00:17:45.960 and we should take those to be investing in tomorrow's technologies, 333 00:17:46.220 --> 00:17:50.800 really purchasing on the bleeding edge of solar, nuclear, biofuels, 334 00:17:50.800 --> 00:17:52.320 a whole set of the technologies that we need. 335 00:17:52.860 --> 00:17:54.320 Well, I have a very different view. 336 00:17:54.580 --> 00:17:58.960 I mean, I see renewable energy as tomorrow's technologies, 337 00:17:59.080 --> 00:18:03.680 which can be implemented far faster than any other alternative, 338 00:18:03.780 --> 00:18:06.940 whether it's coal with carbon capture and storage, 339 00:18:07.060 --> 00:18:11.780 which is at least 20 years away or more in terms of capacity, 340 00:18:11.780 --> 00:18:14.820 commercial production, whether it's new nuclear technologies, 341 00:18:14.920 --> 00:18:17.000 which are also decades away. 342 00:18:17.200 --> 00:18:18.780 We have wind now. 343 00:18:18.940 --> 00:18:21.780 We have solar photovoltaic modules now, 344 00:18:21.860 --> 00:18:23.520 which are rapidly becoming cheaper. 345 00:18:23.780 --> 00:18:26.420 We have concentrated solar thermal power, 346 00:18:26.520 --> 00:18:28.520 not in Australia yet, unfortunately, 347 00:18:28.700 --> 00:18:32.080 but in Spain and in some parts of the United States, 348 00:18:32.300 --> 00:18:34.280 which are being rolled out 349 00:18:34.280 --> 00:18:38.020 and will certainly become a lot cheaper over the next 10 years. 350 00:18:38.300 --> 00:18:39.920 We have biomass, 351 00:18:39.920 --> 00:18:44.740 which can also be used, biomass from existing crop residues. 352 00:18:44.940 --> 00:18:46.640 We have a range of technologies, 353 00:18:46.860 --> 00:18:49.780 and we need to move with these. 354 00:18:50.080 --> 00:18:53.880 And we have a range of studies which tell us that, yes, 355 00:18:53.880 --> 00:18:58.340 we can actually make most of these technologies 356 00:18:58.340 --> 00:19:01.060 run our existing energy systems. 357 00:19:01.300 --> 00:19:03.660 How do we pay for it, as Peter asked? 358 00:19:03.940 --> 00:19:08.920 Well, a carbon price can raise tens of billions of dollars. 359 00:19:09.220 --> 00:19:09.820 That's... 360 00:19:09.920 --> 00:19:10.900 That's certainly one way. 361 00:19:11.300 --> 00:19:15.140 I believe feed-in tariffs on renewable energy 362 00:19:15.140 --> 00:19:18.920 that's paying a premium price for electricity fed into the grid 363 00:19:18.920 --> 00:19:21.540 have been enormously successful in Europe, 364 00:19:21.660 --> 00:19:23.220 in solar and wind, 365 00:19:23.920 --> 00:19:24.880 and we really... 366 00:19:24.880 --> 00:19:29.000 Sadly, in Australia, our governments are terminating these tariffs 367 00:19:29.000 --> 00:19:31.100 when, in fact, we need to expand them 368 00:19:31.100 --> 00:19:35.720 and apply them to large-scale solar as well as small-scale solar. 369 00:19:35.940 --> 00:19:37.300 Can I just ask you, though... 370 00:19:37.300 --> 00:19:39.380 I mean, one of the things Michael Schoenberger suggested 371 00:19:39.920 --> 00:19:43.020 was a tax on coal to raise money for research and development. 372 00:19:43.140 --> 00:19:44.720 Now, presumably, that's not something... 373 00:19:45.360 --> 00:19:46.980 Do you also see that as a good idea? 374 00:19:47.060 --> 00:19:50.580 I mean, here we are, Australia, exporting massive amounts of coal 375 00:19:50.580 --> 00:19:52.120 to the rest of the world where it will be burnt. 376 00:19:52.260 --> 00:19:54.760 It won't be in any way affected by our own carbon price 377 00:19:54.760 --> 00:19:56.420 because it's not burnt here. 378 00:19:56.880 --> 00:19:59.080 I have no problem with a tax on coal, 379 00:19:59.200 --> 00:20:02.020 but politically, they are extremely powerful, 380 00:20:02.200 --> 00:20:05.320 as we saw with the attempts to put a super profits tax 381 00:20:05.320 --> 00:20:06.900 on the mining industry. 382 00:20:07.340 --> 00:20:09.860 And they react even more strongly 383 00:20:09.860 --> 00:20:12.820 to direct threats, as they see it, 384 00:20:12.880 --> 00:20:16.480 than indirect threats as building renewable energy. 385 00:20:16.880 --> 00:20:17.980 So I think... 386 00:20:18.860 --> 00:20:21.400 I think there's a mix of policies needed. 387 00:20:21.560 --> 00:20:23.500 We also need regulations and standards 388 00:20:23.500 --> 00:20:25.620 for energy efficiency in buildings. 389 00:20:26.000 --> 00:20:29.560 We need to expand our existing renewable energy target 390 00:20:29.560 --> 00:20:32.120 and the associated certificate scheme, 391 00:20:32.300 --> 00:20:36.420 which has been helping the lowest-cost renewables very well. 392 00:20:36.600 --> 00:20:39.360 And we also have to recognise that these subsidies 393 00:20:39.860 --> 00:20:41.300 for renewable energy are only temporary. 394 00:20:41.700 --> 00:20:44.760 They're being decreased in Europe quite rapidly, 395 00:20:44.900 --> 00:20:49.200 and the price of solar is coming down extremely rapidly. 396 00:20:49.400 --> 00:20:53.760 Last year, the global price for solar PV modules installed 397 00:20:53.760 --> 00:20:57.140 dropped 20% in one year. 398 00:20:57.380 --> 00:21:02.280 So these technologies are not in the long-distant future. 399 00:21:02.800 --> 00:21:03.860 I mean, in China... 400 00:21:04.680 --> 00:21:06.880 I mean, I was in Beijing earlier this year, 401 00:21:06.940 --> 00:21:08.360