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May 14, 2013
An incoming Coalition is committed to the politics of austerity, given its economic mantra of “stop the taxes” , "cut the debt" and only run budget surpluses always. It is also committed to the supporting multinational capital--- Big Miners, the coal industry and the fossil fuel companies/generators--- by rolling back the mining tax and restricting renewable energy. They also plan to cut back the taxation on corporate profits and personal income.
This is part of the decade-long fierce fight-back by the conservative right, especially in the Anglo-Saxon world against what it sees as environmental socialism.The Coalition's option is to adapt to climate change rather than give in to "socialism" to prevent it.
David Rowe
This, it is claimed, will prevent from Australia becoming an economic basket case like Greece, and this, in turn, will also ease the cost of living pressures on those living in suburbia thereby enabling them to have an easier life. So there will be austerity for the populations to bring national debt under control and a pro-growth strategy based on dig baby dig. This represents the end of rising energy prices and squeezed living standards.
Coal has a brilliant future. The good times are just around the corner. Self-organising markets and business, with minimal public intervention and oversight, are the route to wealth generation, prosperity and jobs.
There's a possible alternative scenario within thee self-organizing free market. Here's possible alternative scenario. The world's top 200 fossil fuel companies are currently valued at $4trn, with $1.5trn of debt. That valuation implies they would burn all their carbon reserves, increasing global temperatures by at least 6C, with untold consequences for life on Earth. So the current valuations and business strategies could be self-defeatingly irrational – and $4trn of value could be suddenly halved.
What happens if China and India start cutting back on their use of coal to generate the energy for their economic development because coal pollution makes their cities unbearable to live in? That would mean them buying less imported coal from Australia. Doesn't that put constraints on the plans of Clive Palmer and Gina Rinehart to construct Australia’s biggest ever coal mines and billions of dollars of associated infrastructure in Queensland around the Galilee Basin?
Wouldn't that mean it becomes more difficult for the coal miners to obtain the finance for their capacity expansion and that their coal assets (eg., coal export terminals, mines and railways in Queensland and NSW). What if the power generators are unable to raise raise capital to build new plants. Doesn't this scenario mean stranded assets?
So you can see the Coalition's gamble. They are betting on China and India's ever increasing demand for Australian coal due to their ever expanding reliance on coal until 2050. Yet the market for coal is not looking good as India and China increase their wind and solar capacity by putting ever more incentives behind solar, wind, gas and nuclear.
What if coal fired power stations are retired and no new coal fired power stations are built? Doesn't that mean a limited rise in the price of coal. Australia would be the hardest hit of any coal exporters because, as the Big Miners tell us, it has the highest marginal cost. What then, is the price per tonne which the coal miners need in order to ensure that their big projects are profitable?
$87/tonne? The price reached $10/tonne in February 2013. It fell to $93/tonne in April. The trajectory is down.
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CO2 levels have passed 400 ppM for the first time. Governments have said the limit should be (450ppm)-- the level beyond which catastrophic warming is thought to become unstoppable. Scientists are saying that we should have stopped at (350ppm). At the beginning of industrialisation the concentration of CO2 was just 280ppm.