Age
Tuesday 9/9/2008 Page: 2
AUSTRALIA will have to reach a carbon price of about $70 a tonne by 2020 if "clean coal" is to be a viable option, says an international energy expert. Mark Lewis, Deutsche Bank's director of global carbon research, said Australia should strive for a minimum price of $25 a tonne when its emissions trading scheme started in 2010 to give it global credibility and put it above international standards.
On Friday, Professor Ross Garnaut recommended a 10% cut in emissions on 2000 levels by 2020, resulting in a carbon price of about $34.50. Mr Lewis said Australia's large coal deposits meant it should be investing heavily in carbon capture and storage technology (CCS).
"Australia is sitting on a black goldmine which is abundant and cheap but carbon intensive," he said. "carbon capture and storage is really energy nirvana for Australia; $65-$70 a tonne is the price where CCS becomes viable, assuming that the technology has improved by 2020 to the point where efficiency rates are much better.
And if you don't get those efficiency rates, then it will be much higher." Mr Lewis said Australia's carbon price needed to be above the price of primary Kyoto credits, now valued at about 13 ($A22).
"I would have said anywhere above $25 would be meaningful initially, but by 2020 you would want to be up at a price that is above the international credit price even on a secondary basis," he said. "The long-term cost of carbon will be set by the price required to make gas-fired power station the new entrant over coal." Mr Lewis said Mandarin speaking Prime Minister Kevin Rudd had a distinct advantage in encouraging China to sign up to a global climate change agreement.
"He personally - not just as Australian Prime Minister, but with the set of skills he has - there is great potential for him to smooth the wheels between the developed economies and the larger developing economies, in terms of getting a global agreement in Copenhagen next December," he said.
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