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Business here and households here, already we’re paying twice the cost of the US for electricity. – Craig Kelly MP, chair of the backbench environment and energy committee, ABC Radio National Breakfast interview, December 6, 2016. (Listen from 7.38)

Environment and energy minister Josh Frydenberg recently left open the possibility of some form of carbon trading in the electricity sector. He later ruled out that option, saying he wanted to keep electricity prices down.

Following Frydenberg’s initial comments, Liberal MP Craig Kelly said businesses and households in Australia are already paying twice as much as Americans for their electricity.

Is that true?

Checking the source

When asked for sources to support his statement, Craig Kelly referred The Conversation to a range of sources, saying that:

… a report titled 2015 Residential Electricity Price Trends lists [on page 212] the average Australian price at 28.72 cents per kilowatt hour for 2014/2015.

In comparison, the US Energy Information Administration lists the average price for residential electricity [in the US] at 10.44 cents for 2014.

Converting 10.44 US cents at A$1/US$0.74 – is the equivalent of 14.11 cents Australia.

So using these sources (in Australian cents) we have 14.11 cents in the USA and 28.72 cents in Australia. Therefore I think to say that “we’re paying twice the cost of the US for electricity” (on average) is pretty much right on the money.

You can read Craig Kelly’s full response here.

Do Australians pay more?

It’s definitely true that Australians pay much more for their electricity than US citizens do (and Australian prices are set to rise even further, according to the Australian Energy Market Commission.

Using OECD data, there’s one measure that says it is twice as much – or at least it was twice as much as recently as 2014. Another measure – a better measure, in my view – shows Australians pay about 50% more than US citizens do for their electricity.

As Craig Kelly notes in his full response, there is significant variation in electricity prices across states and territories in Australia and in the United States, so comparing the two is not a simple matter. The Australian Energy Market Commission’s annual Electricity Price Trends report shows that retail prices in Australia vary from 18.44 c/kWh in the Australian Capital Territory to 29.75 c/KWh in South Australia.

But we can use Organisation for Economic Co-operation and Development (OECD) data on wholesale and retail indices energy prices to check Craig Kelly’s statement.

The wholesale price is the cost of generating the energy that is sent to the grid. Retail prices are what householders are more used to talking about. Retail prices factor in extra costs like transmission and distribution (“poles and wires”), retailer margins and other levies (such as Feed-in Tariff and Renewable Energy Target costs). In other words, it’s what we’re paying on our power bill.

Let’s examine the data.

A tale of two measures

The two measures I have used to compare prices in the US and Australia are called “market exchange rates” and “purchasing power parities”. Craig Kelly’s calculations rely on market exchange rates, so we will start with that one.

Market exchange rates simply means converting the price in one country’s currency to that of another country’s currency, as Kelly did. This measure of comparison is more volatile than purchasing power parity exchange rates.

Using market exchange rates, OECD data show that Australian electricity prices have, in recent years, been approximately twice as high as electricity prices in the US. Recently, the gap has narrowed. In 2015, using market exchange rates, electricity prices in Australia were about 70.3% higher than in the US.

The Australian Energy Market Commission projects that Australian prices will rise even further in coming years.

By converting Australian electricity prices into US dollars (market exchange rates), we can see Australian electricity prices have been an average of twice as high as in the US over the past four years – though the gap narrowed in 2015, down to a 70% difference. Chart provided by author, using data from the OECD.

That broadly supports what Kelly said. But if we use purchasing power parity exchange rates, the data show that Australia’s prices are approximately 50% higher than the US.

Purchasing power parity exchange rates, or PPP, factor in inflation and the cost of living in a particular country, and eliminate differences in price levels between countries. This measure allows a cleaner, less volatile comparison between the US and Australia.

The chart below compares the retail prices of electricity in Australia and the United States when adjusted for cost of living differences using purchasing power parity.

Using purchasing power parity exchange rates, OECD data shows household prices of electricity are approximately 50% higher in Australia than in the US. Chart by author, using data from the OECD.

As the above chart of the OECD data shows, household prices of electricity are about 50% higher in Australia than in the US when you use purchasing power parity data.

Why are the prices so different?

As this chart shows, data from OECD indicate there has been a substantial divergence between Australian and American electricity prices since about 2008.

Retail price index: average power prices for householders in the US and Australia. The year 2000 is indexed to 100 (that is, 2000 = 100) Author provided, using data from the OECD Wholesale price index: the average price the generators charge to the retailers (or distributors) for the power they put into the grid. The year 2000 is indexed to 100 (that is, 2000 = 100) Author provided, using data from the OECD.

As noted in the preliminary report of the Australian chief scientist Alan Finkel’s review of the National Electricity Market, household energy bills in Australia increased 61% on average between 2008 and 2014.

The main reason for this is the cost of maintaining the electricity network – essentially, the poles and wires that deliver the power. Network costs represent between 45% and 55% of a typical electricity bill. This has been the largest contributor to Australia’s increasing prices over the past six years.

Some observers have said that the “gold-plating” of the network came about because of a regulatory regime that encouraged over-investment in poles and wires. This was been partly driven by an effort to shore up electricity supply and an overestimation of demand.

The US shale gas revolution has also helped keep energy more affordable there than in Australia.

The Productivity Commission reported that, in New South Wales, network costs accounted for 80% of price rises in 2010-11 and 50% of price rises in 2011-12.

Is it really that simple?

Not really. Energy economics is far more complicated than can come across in Kelly’s quick quote or this short FactCheck.

While the Australian price is higher, this doesn’t necessarily mean the cost is higher: Australians use much less energy than Americans. This is because as prices increase, energy productivity and energy efficiency also tend to increase. In total, most countries actually spend a similar proportion of GDP on energy costs.

This holds surprisingly consistent across a range of countries. For example, Japan has high energy prices, but also has high energy efficiency and productivity. Consequently, it spends practically the same amount of GDP on energy cost as the US.

So prices may be higher for individuals, but that doesn’t mean the economy-wide costs are higher. All that said, Kelly was talking about the prices for individuals and business, so that’s what this FactCheck is focused on.

Verdict

If we compare Australian and American electricity prices using market exchange rates, Craig Kelly’s comment is correct: Australia’s electricity prices were essentially double those of the United States as recently as 2014. In 2015, using market exchange rates, the US prices were about 70.3% higher.

If we compare the prices using purchasing parity power exchange rates – which I’d argue is the more accurate reflection of the costs of living in each of the countries – Australia’s prices are about 50% higher than the US.

Overall, Craig Kelly’s broader point is correct: Australians pay a much higher price for their electricity than Americans do. – Dylan McConnell.

Review

I agree with the author’s position that purchasing power parity comparisons are less volatile and more representative of the relativity based on actual living costs. It is true Australian households pay a much higher electricity price than Americans.

There’s one important point I’d add. There is a baseline cost of having a house or business connected to electrical supply, regardless of how much electricity is used. This is called the fixed supply cost. The more electricity a household or business uses, the more the fixed supply cost is diluted in the overall electricity bill. This brings down the cost per kilowatt-hours (kWh).

American households use about twice as much electricity as Australian households. According to the US EIA, average US household electricity consumption in 2015 was 10,812 kWh. 2014 data for Australia shows average Australian household electricity consumption was 5,772 kWh (down from 6,819 kWh in 2008. At 25 cents/kWh that is a saving of $307 for Australians for using less electricity over time).

So we would expect Australian household electricity prices to be higher, because an average Australian household uses less electricity and the large fixed supply costs must be spread across a smaller amount of consumption. This raises the cost per kWh. But because Australians use less, their annual bill may be lower.

Further, in recent years, Australian energy retailers have been raising their fixed supply (or baseline) charges. So small users pay much more overall per unit of electricity they use.

Lastly, it’s worth noting that larger businesses often negotiate much better deals on their electricity prices than householders can. – Alan Pears.

Have you ever seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.

Dylan McConnell has received funding from the AEMC's Consumer Advocacy Panel and Energy Consumers Australia.

Alan Pears has worked for government, business, industry associations public interest groups and at universities on energy efficiency, climate response and sustainability issues since the late 1970s. He is now an honorary Senior Industry Fellow at RMIT University and a consultant, as well as an adviser to a range of industry associations and public interest groups. His investments in managed funds include firms that benefit from growth in clean energy.

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Ideas to enhance the liveability and sustainability of our cities have attracted a lot of interest recently. Examples include establishing or enhancing “urban forests”, or “bringing back nature” into cities to support animals and ecosystems displaced by human activity.

While these projects focus on creating space for nature and enhancing biodiversity within cities, they rarely consider the impact on nature of the artificial lighting used across the urban landscape.

Public lighting is often thought to be essential for improving safety and preventing crime. Most commercial and public structures are lit up at night, although often for purely aesthetic reasons.

A network of street lighting links these “islands of illumination”. The effects of this can, in some large cities, result in “sky glow” that interferes with star visibility at distances of more than 300 kilometres.

A cascade of harmful impacts

While modern life makes some artificial lighting essential, when it’s overused or poorly designed it creates light pollution. It is not widely appreciated that this can have significant adverse effects, which go beyond interference with stargazing. These include serious impacts on humans, plants and animals.

Effects on humans reportedly include (but are not limited to) an increased risk of breast cancer, sleep disruptions and possible links to metabolic disorders, including diabetes and obesity. Furthermore, artificial lighting uses large amounts of energy associated with CO2 emissions.

Adverse effects on animals include interference with reproduction, predator and prey interactions, and orientation and migration. These effects are potentially damaging for entire ecosystems, as well as particular species.

Ecosystems involve a complex balance of interactions between species. Disrupting this can trigger a cascade of harmful effects.

The attraction of moths to lights offers an illustration of this. In becoming disoriented and infinitely attracted to the artificial light, the local moths of a given species become an easy meal for bats and other predators, and the moth population declines. Other species that depend on the moths for their survival are now themselves at risk.

If this particular species of moth pollinates plants, then local pollination may be reduced. And if this moth is the only pollinator of a plant species, then that species’ rate of reproduction will fall. This can be devastating for insect and animal communities that rely on these plants for habitat and food.

A whole ecosystem can be harmed by something as apparently harmless as public lighting.

A need to rethink lighting standards

Despite awareness of adverse effects, the collective ecological impact of artificial light is not well recognised beyond the sphere of ecological research.

Planning regulations and practices tend not to consider artificial lighting as a source of pollution. Rather, the focus is on minimum lighting standards, reflecting perceptions of safety and community expectations.

Questions of unwanted light are more often considered in terms of nuisance or energy wastage. The focus of light reduction tends to be on cost savings, or even CO2 savings, and not wider environmental effects. Ironically, the introduction of energy-saving lighting, such as LED, may lead to even greater impacts on some species.

Being diurnal creatures, we humans tend to have little awareness of night-time ecosystems. Given that light emissions disappear once the source is turned off, it is unsurprising that artificial light has not been identified as an important pollutant.

Global concerns about climate change and energy consumption, and the resulting trend towards greater efficiency and sustainability, create an opportunity to challenge the underlying assumptions about public lighting. For example, the notion that more lighting equates to greater safety and discourages crime may be questionable.

Reconsidering our association of artificial lighting with progress and modernity allows us to reframe the “minimum lighting standards” model to one that seeks to minimise harm in all respects. The key question then is what lighting is needed for human safety while minimising unwanted or harmful light as well as energy consumption?

Possible solutions go beyond a debate of more versus less lighting. We could, for instance, use lights with wavelengths that cause less disruption to key species, as well as “adaptive street lighting” that responds to pedestrian movement. There are doubtless many possible innovations that balance human and ecological needs.

Urban greening programs could play a leading role here in developing smarter lighting solutions that benefit both humans and ecosystems. Such initiatives would be natural inclusions in the emerging protocols to guide biodiversity-sensitive urban design.

Alex Kusmanoff receives funding from the Australian Research Council and through the National Environment Science Programme's Threatened Species and Clean Air and Urban Landscapes Hubs.

Georgia Garrard receives funding from the National Environmental Science Programme's Threatened Species Recovery Hub.

Luis Mata receives funding from the National Environmental Science Programme - Clean Air and Urban Landscapes Hub.

Sarah Bekessy receives funding from the Australian Research Council and through the National Environment Science Programme's, Threatened Species and Clean Air and Urban Landscapes Hubs.

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Climate change made some of Australia’s 2015 extreme weather events more likely, according to research published today in the Bulletin of the American Meteorological Society.

As part of an annual review of global weather extremes, these studies focused on October 2015, which was the hottest on record for that month across Australia. It was also the hottest by the biggest margin for any month.

October 2015 was also the driest for that month on record in Tasmania, which contributed to the state’s dry spring and summer, and its bad fire season.

El Niño events usually drive global temperatures higher, and 2015 had one of the strongest on record. So were these records due to El Niño, or climate change? The research shows that while El Niño had some influence on Australia’s weather, it was not the only culprit.

El Niño packed a punch – or did it?

In 2015, a strong El Niño developed, with record high temperatures in the central equatorial Pacific Ocean contributing to 2015 being the hottest year on record globally (although 2016 will smash it). The Indian Ocean was also very warm.

El Niño is often associated with warm and dry conditions across eastern Australia, particularly in spring and summer. The new studies found that for Australia as a whole, while El Niño did make the continent warmer, its direct contribution to record temperatures was small.

Only in the Murray Darling Basin did El Niño make it more likely that the October 2015 heat would be a record. El Niño also played a small but notable role in the dry October in Tasmania.

Temperatures were at a record high across the south of the country. Bureau of Meteorology The hottest October

Although record-high spring temperatures might not make you sweat as much as a summer heatwave, ecosystems and agriculture can be susceptible. October 2015 was 2.89℃ warmer than the previous hottest October in 2014, beating the margin set by September 2013, which was 2.75℃ warmer than the previous hottest September.

Even before October 2015 was over, Mitchell Black and David Karoly at the University of Melbourne reported that human-induced climate change played a strong role in the excessive October heat.

The first paper (chapter 23 in the annual review) explains this further. Using the citizen science Weather@home ANZ system, the researchers analysed thousands of simulations of the world’s climate of 2015, generated on home computers (you can donate your computer power here).

To find out whether climate change played a role, some of those simulations included the observed ocean temperatures of 2015, while some included ocean temperatures as if human-caused climate change had never occurred.

According to this method, climate change made breaking the October record four times more likely compared to a world without climate change.

The second paper (chapter 24 in the review) backed this up. This study used the Bureau of Meteorology’s seasonal forecast system to compare the real world to a world with less carbon dioxide in the atmosphere. The researchers came to exactly the same conclusion: rising carbon dioxide levels made a record October four times more likely.

This second study also found that the atmospheric conditions – the series of high and low pressure systems that shift heat from inland Australia towards the south – were more important in driving the extra heat than the extreme global ocean temperatures.

If these weather systems had occurred in a low-CO₂ world, it would still have been an extremely warm month. But for October 2015, climate change increased the temperature by an extra 1 degree.

Driest October for Tasmania

In October 2015, Tasmania received only 21mm of rainfall, just 17% of its normal amount. It was much drier than the previous driest October in 1965 (in the era with reliable record, when the state received 56mm). This was part of the driest spring on record, and a dry and warm run of months through spring and summer.

This run of warm and dry months had major impacts on agriculture and hydroelectricity, and helped to set up a catastrophic fire season.

Rainfall extremes can be complex, and it is generally much harder to figure out what caused them than temperature extremes. So the third Australian study (ch. 25 in the review) used two different methods to compare October 2015 to the previous record.

The results showed that El Niño did affect the October climate, but human-caused climate change also played a small but significant role. Climate change probably increased the chances of Tasmania having its driest October by 25-50%.

The record-dry October appears to be linked to higher atmospheric pressure in a band around the whole southern hemisphere, which is consistent with trends over recent time.

Rainfall across Tasmania was the lowest on record across nearly the whole state. Bureau of Meteorology Climate change is altering our extremes

More extreme events and more broken climate records are causing many people to ask whether climate variability or climate change is to blame. But of course it is never just one of these; it is always a combination of both.

For the extreme October of 2015, while short-term weather patterns and the El Niño contributed to the extremes, breaking these climate records would have been substantially less likely without human-induced climate change.

Climate change has already altered the extreme weather we experience in Australia and will continue to do so over the coming years.

David Karoly, Mitchell Black, EunPa Lim and Harry Hendon all contributed to the research on which this article is based.

Pandora Hope receives funding from the Australian Government’s National Environmental Science Programme, as part of the Earth Systems and Climate Change hub.

Andrew King receives funding from the ARC Centre of Excellence for Climate System Science.

Guomin Wang receives funding from the Australian Government’s National Environmental Science Programme, as part of the Earth Systems and Climate Change hub.

Julie Arblaster previously received funding from the Australian Climate Change Science Programme

Michael Grose receives funding from Australian Government's National Environmental Science Programme, as part of the Earth System and Climate Change hub.

The annual review of extreme weather and climate events published in the Bulletin of the American Meteorological Society today highlights how climate change is influencing the events that affect us the most. This table summarises each event and whether climate change played a role.

Across the globe, extreme heat events are linked with climate change, although El Niño provided a boost in 2015 leading to more records being broken. The human influence on rainfall and drought is less strong but we can see it in many events that were studied.

Our influence on the climate extends beyond temperature and rainfall. In the UK, the chance of very sunny winters (which sounds like an oxymoron!) has increased due to climate change. The record low sea ice extents, which have continued into 2016, are strongly associated with human influences.

While the majority of studies have been done on the developed world, more analyses of developing countries are included this year than in the past. Through collaborations between local experts and teams in the United States and Europe, a greater emphasis on extreme events in the developing world was possible.

This is important because the impacts of extreme events are often more severe in these areas than in wealthier regions.

The effects of climate change on extremes spread far and wide as human activities have radically altered our climate. We can expect to see more extreme events with a clear fingerprint of human-caused climate change in the coming years and decades.

Andrew King receives funding from the ARC Centre of Excellence for Climate System Science.

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