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An emissions intensity trading scheme increases the cost of coal power compared to other electricity sources. Indigo Skies Photography/Flickr, CC BY-NC-ND

The preliminary report from the Finkel Review of electricity market security will be presented to COAG today. Leaked versions indicate that the report notes the urgent need for long-term policy certainty on climate change and that some policies (such as carbon pricing) reduce emissions at lower cost than others (renewable energy targets or regulation).

These are hardly inflammatory observations. Yet they link directly with this week’s furious debate within the Coalition government over the inclusion of a particular form of carbon pricing, an emissions intensity scheme, and whether it, and all of its relatives, should be excluded from next year’s climate policy review.

How does it work?

An emissions intensity scheme sets an intensity baseline – effectively a limit on how much carbon dioxide the generators can emit for each unit of electricity they produce.

Power stations can produce electricity above the baseline, but they would have to buy permits for the extra CO₂. Power stations that have lower emissions intensity create permits, which they can then sell.

For example, the intensity baseline might be set at one tonne of CO₂ for every megawatt hour (MWh) of electricity. A brown coal generator produces electricity at 1.3 tonnes CO₂ per MWh.

For every MWh the generator produces, it therefore has to purchase 0.3 permits. Alternatively, a wind farm that emits no CO₂ will create 1 permit for every MWh of electricity generated.

An emissions intensity scheme increases the cost of producing electricity from high-emitting generation, while reducing the relative cost of low-emitting generation. It thus drives emissions down in the electricity sector, because the cost difference favours a switch from high- to low-emitting generators.

Why this type of scheme?

Other forms of carbon pricing, such as a cap-and-trade emissions trading scheme, also increase the costs of high-emitting generation relative to low-emitting generation. But there are differences between the two schemes.

The main one is the short-term impact on prices. A cap-and-trade scheme places a price on each tonne of CO₂ emitted, which is paid to the government. Under an emissions intensity scheme, a price is imposed only on the carbon emitted above the intensity baseline.

Under a cap-and-trade scheme, our brown coal generator would have to purchase 1.3 permits for each MWh it produced, as opposed to the 0.3 it purchases under the intensity scheme.

As a result, electricity prices do not increase as much under an emissions intensity scheme as under a cap-and-trade scheme, at least in the short term. But there are drawbacks.

An emissions intensity scheme does not raise any revenue, as permits are purchased from other generators rather than the government. No revenue means no compensation to those impacted by decarbonisation.

Smaller price increases also mean that consumers are less likely to cut back on their own electricity use. This means that overall emissions will not be reduced as much as under a cap-and-trade scheme.

On the plus side, the lower price increase also means that there is less effect on overall economic activity. This can be mitigated under a cap-and-trade scheme, however, if the government uses the revenue wisely.

Bipartisan support at last?

Consulting firm Frontier Economics assisted the New South Wales government with the design of its greenhouse gas abatement scheme, an emissions intensity scheme that ran in that state from 2003 until 2012, with some success.

In 2009, Senator Nick Xenophon championed the emissions intensity approach as a better alternative to then prime minister Kevin Rudd’s proposed Carbon Pollution Reduction Scheme (CPRS). Malcolm Turnbull joined with Xenophon to attempt to persuade Rudd to adopt the scheme as an alternative to the CPRS; that attempt failed.

In the past couple of years, an emissions intensity scheme has again been advocated as a potential circuit-breaker to the climate policy impasse that has been the norm in Australia for the past decade. The electricity market rule-maker, the Australian Energy Market Commission, the Climate Change Authority and we at the Grattan Institute have all advocated for an emissions intensity scheme in the electricity sector.

This position was also reflected in the Labor Party manifesto at the last general election. While ambivalent about what form it takes, the major generation companies and business groups have all been arguing for a form of carbon pricing.

The Coalition government could get to an emissions intensity scheme in the electricity sector from its existing policies. An absolute limit on total emissions for the sector has already been set under the safeguards mechanism. Arithmetic and legislation are required to change the absolute limit to an emissions-intensity limit.

The advantages and disadvantages of an emissions intensity scheme against other forms of carbon pricing have been debated by academics, economists and policy wonks ever since Australia first committed to tackling climate change. But two things are clear.

First, an emissions intensity scheme would provide the stable carbon policy that the electricity sector needs to have investment confidence and contribute to electricity security.

Second, an emissions intensity scheme would, for some time, limit the impact on electricity prices. Apparently, these are matters of importance to both sides of politics.

Tony Wood owns shares in Origin energy and other energy and resources companies through his superannuation fund.

David Blowers does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.

Now that our rooftop solar industry has matured, we need to reconsider the purpose of FiTs and align them with our goals for the electricity system in the future.

Recent weeks have seen unsurpassed dishonesty and irresponsibility from national political leaders on Australian climate and energy policy.

Chief scientist report into Australia electricity market says huge, unstoppable transition being driven by consumers responding to soaring prices and falling costs of technologies like wind and solar. Solutions abound for high renewables penetration, but not supported by policies.

AMBER FOSSIL: The exquisitely preserved bones and feathers of a dinosaur tail have been discovered in a piece of 99-million-year-old amber found by a palaeontologist hunting for fossils in a Myanmar market.

Former astronaut John Glenn, the first American to orbit Earth, dies aged 95. Pallab Ghosh looks back at the day he made history.

Former astronaut John Glenn, the first American to orbit Earth, dies aged 95.

Mikah Meyer is making a record-breaking attempt in a battered Hyundai his father left him when he died, hoping to highlight parks for gays and millennials

There was the night when something big was sloshing around ominously in the river next to his tent and he was too terrified to look out, but knew wolves and moose were at large.

Then there was the sweaty night when he thought he would bake to death in his van but was too scared to open the windows because he was parked in a sketchy neighborhood in Ohio.

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Senate Democrats vow to fight Trump’s nominee to lead the EPA, a climate denier who has sued the agency multiple times as attorney general of Oklahoma

Democrats have promised to stage a last-ditch effort to thwart the appointment of Scott Pruitt as administrator of the Environmental Protection Agency, amid fears within the agency that he will trigger an “unprecedented disaster” for America’s environment and public health.

Donald Trump has nominated Pruitt to lead an agency he has sued multiple times in his role as attorney general of Oklahoma. Pruitt has vowed to dismantle serried environmental rules and is currently involved in a legal effort by 27 states to overturn Barack Obama’s clean power plan, the president’s centerpiece policy to reduce greenhouse gas emissions.

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The Indonesian government has renewed calls for Australia to encourage the company responsible for the 2009 Montara oil spill in the Timor Sea to compensate thousands of fishermen and seaweed growers.

Increasing population | Theresa May’s cliches | Rich and poor | European moths

I have just scoured eight pages of your Climate Change supplement (7 December). I found not a single reference to one of the key drivers of climate change, the relentless increase of population, now scheduled to be 11.5 billion by 2100. Whatever action we take to reduce emissions, those efforts will be negated by the births of 4 billion more people who, even in the old “third world”, will want to be consumers.
Nigel Reynolds
Mirfield, West Yorkshire

• Theresa May is right to dislike acronyms (Report, 8 December) but it’s time she considered her cliches. I suggest she takes a blue pencil to her sentence “I’m talking about ordinary working people for whom life is a bit of struggle …”. There are people who are too old or otherwise unable to work for whom life is a struggle. And who are ordinary people? I would hope they are those who do not have to struggle to make ends meet.
Peter Le Mare
Allithwaite, Cumbria

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A sample of the smallpox virus from a 17th Century victim challenges current thinking.

Solar subsidies encouraged a massive take-up of solar panels in Australia. Solar image from www.shutterstock.com

The Australian government is reviewing our electricity market to make sure it can provide secure and reliable power in a rapidly changing world. Faced with the rise of renewable energy and limits on carbon pollution, The Conversation has asked experts what kind of future awaits the grid.

This year many Australian households will find themselves cut off from generous incentives paid for electricity they export into the grid from rooftop solar systems.

Between September and December, state feed-in tariff (FiT) schemes in New South Wales, Victoria and South Australia will finish. The FiTs applying to over 275,000 customers will drop from between 16 and 60 cents per kilowatt hour to between 5 and 7.2 cents per kWh. In NSW, the replacement FiT won’t be mandatory, with retailers allowed to decide what they pay. Of course, many of those customers have already recouped their investment.

Now that our rooftop solar industry has matured, we need to reconsider the purpose of FiTs and align them with our goals for the electricity system in the future.

Why pay solar households?

FiTs have been hugely important in getting the global solar industry to where it is now. Solar electricity costs have fallen to levels that were unimaginable just 10 years ago.

Governments have traditionally used FiTs to achieve a policy aim, such as increasing renewable energy production by bridging the gap between current costs of electricity and the cost of new sources.

Australian states began to introduce mandated FiTs in 2008. There has never been a national FiT in Australia, and Queensland, NSW and the ACT no longer have mandated FiTs. However, many electricity retailers offer FiTs, even when not mandated by government.

Current state of feed-in tariffs in Australia for new customers. Authors

The costs of FiTs are recovered in different ways, depending on whether they are government-mandated or not, but ultimately they fall on all electricity consumers. As governments wind back mandated FiTs, it’s assumed that FiTs will be roughly cost-neutral.

Have they worked?

Residential solar installations soared after the introduction of FiTs in 2008. Installations quadrupled each year in Australia until 2012, leading to 11,600 jobs and the highest penetration of households with rooftop solar in the world.

Cumulative and annual installed solar PV capacity in Australia. Chapman et al 2015

This boom stimulated a competitive solar market in which residential installation costs have plummeted (as you can see below). Australia now enjoys some of the lowest installation costs for rooftop solar in the world.

Module and system installation price with number of installations. Chapman et al 2015

The trick that state policymakers missed, however, was making FiT policies sustainable.

Early FiTs were excessively high, especially in NSW and Queensland, causing policy fallout and sudden withdrawal. This was partly because the rapid reduction in solar prices exceeded expectations.

For example, the NSW government was forced into a hasty reassessment of its 2010 policy in order to prevent a cost blowout after massively underestimating the level of uptake. By October 2010, just 10 months after it began, the NSW gross FiT was slashed from 60 to 20 cents per kWh. The scheme was closed to new participants in April 2011.

Across Australia most states cut or entirely removed FiTs within four years. Most current FiTs are now well below retail prices. This means that customers are being encouraged to use as much as possible of their solar energy to power their own homes rather than exporting it to the grid. This is one of the reasons why the system size for solar installations in Australia tends to be smaller than elsewhere.

The fallout from these unsustainable FiT policies has unfortunately polarised the national conversation about solar. Hundreds of thousands of solar power system owners are facing bill shock as FiTs are withdrawn, while those who do not have solar have been told they are footing the bill for their neighbours’ systems.

Politicians have sought to capitalise on this discontent, by blaming solar tariffs for high electricity prices. In many states, the actual value of rooftop solar has been pushed out of the conversation.

The real value of solar

A recent Victorian report found that the value of solar energy depends on when electricity is fed into the grid. Solar energy is more valuable when exported to the grid at times of peak demand.

The report argued that the value of solar should account for the reduction in transmission losses (the losses associated with transporting electricity from large power plants over great distances) and environmental effects, primarily the reduction in greenhouse gases from displacing fossil fuel generation.

Solar installations can potentially add value in other ways too. For example, installing battery storage along with solar systems may allow domestic solar systems to offer other network services such as frequency and voltage control.

Encouragingly, since the report the Victorian government has bucked the national trend and announced a multi-rate FiT scheme.

The scheme offers different rates for exporting during peak, shoulder and off-peak times. It will also reward solar owners for the greenhouse gas offsets related to their system’s output. The scheme is expected to raise FiTs from around 5c per kWh to an average of between 6.5c and 7c per kWh.

What next?

Nationally, we need to refocus the conversation about the purpose and value of FiTs. Having already established a world-leading solar industry, we need to ask what FiTs can do for us now and into the future.

If we want our electricity system to take advantage of technological advances, such as battery storage, we need to repurpose our FiTs to reflect the benefits of these technologies. The Victorian example is a great step forward, providing a mechanism where consumers can leverage Australia’s low installation costs to become players in a more competitive energy market.

But there are even more benefits to distributed energy systems that could be realised with intelligently applied FiTs. This means we need more consideration of what solar systems can do for us, and less simplistic conversations about electricity costs.

The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond the academic appointment above.

Shelly Beach near Ballina, one of the new shark net locations, was the scene of a fatal shark attack in February 2015. Dave Hunt/AAP, CC BY-SA

The recent spate of shark attacks in New South Wales has led to the announcement by NSW Premier Mike Baird and Primary Industries Minister Niall Blair of an expansion of the Shark Meshing Bather Protection Program. New shark nets are being installed at five locations in the Ballina and Evans Head area of the state’s north coast.

However, shark nets are controversial because they are designed to kill potentially dangerous sharks. In the process, nets may also injure or kill non-target animals, including endangered and protected species.

Whether or not shark nets actually reduce the risk of an attack is also a tricky question, although there has only been one fatal attack at a netted beach since the NSW meshing program began in 1937.

While some people welcome more nets, there is increasing support for the use of non-lethal shark attack mitigation measures. This is largely driven by concerns about the potential ecological impacts of shark nets. However, there are also substantial economic and logistical constraints on deploying nets at all locations where people might enter the water.

Beyond shark nets

So what other strategies can we use? As well as large-scale initiatives to reduce the chance of shark attacks at popular beaches, such as the installation of shark-proof barriers and enhancing public awareness of attack risk, concern about shark attacks has also led to a proliferation of personal shark deterrent technologies – so much so that there are now too many to list and describe in detail.

Broadly, the devices include those that produce strong electrical or magnetic fields, those that produce a repulsive light, sound or odour, and those that reduce the visibility of the wearer to sharks.

Shark net trial locations, NSW north coast. NSW Department of Primary Industries. Can new devices prevent attacks?

Because of the upsurge in technologies being developed to reduce shark attacks, shark researchers are often asked which are the most effective deterrent devices and which do not work.

However, many of these technologies are still in development. Fewer still have undergone independent testing of their effectiveness in deterring sharks under different conditions. This means that the general public have limited information when deciding if a particular shark deterrent might be suitable and whether it is worth purchasing, especially given that most commercially available devices cost several hundred dollars.

Our current research focuses on the new generation of magnetic and electrical deterrents, especially those designed to be used or worn by surfers and swimmers. We will test these devices in the field with white sharks to assess their efficacy. In the case of the electrical devices, we will map the electrical fields they emit to assess the strength and shape of these fields.

Importantly, by combining these approaches, we can correlate electric field strength with actual deterrent efficiency. This will help to streamline the development and testing of such devices by weeding out prototypes that do not work because their electrical fields are too weak to repel a motivated shark.

Fundamental shark research is essential

Our research will also focus on the physiological response of the shark’s electroreceptive system to the devices’ electrical and magnetic fields. This information will provide an improved biological understanding of the effect of these different stimuli on the sharks’ senses.

History shows that developing shark deterrents based on what we know about shark sensory biology is far more efficient than a trial-and-error approach. This research will also assist in adapting some of the personal deterrent technologies or concepts for use at a larger scale, such as the electric shark barrier being trialled in South Africa.

Any shark attack can be traumatising to the people directly or indirectly involved, and it is critical to reduce risks as much as possible. However, it is also important that scientists and governmental agencies do not overstate their ability to reduce risks of a shark attack.

The general public should be aware that there is no magic bullet when it comes to preventing attacks. No deterrent will prevent every shark attack in every situation.

The only way to remove all risk of an attack is to swim within a well-maintained enclosure that excludes sharks by means of an impervious barrier, or to stay out of the water altogether.

For those determined to venture further into the ocean, we encourage responsible SharkSmart behaviour. This includes staying close to shore, swimming in groups and avoiding large schools of bait fish.

Nathan Hart has received research funding from the Australian Research Council Linkage Program, The State Government of Western Australia Applied Research Program, The NSW DPI Small Grant Program and the Sea World Research and Rescue Foundation to study shark sensory systems and shark deterrents. He has provided design criteria (under contract) to companies that market shark deterrent wetsuits (Shark Mitigation Systems) and advice (based on our independent testing) to companies that produce electronic shark deterrent devices (Shark Shield).

Charlie Huveneers receives funding from NSW DPI Small Grant Program.

Giraffes have been classified as vulnerable to extinction. Chester Zoo says humans are to blame.

The population of the world's tallest land mammal, the giraffe, is shrinking. Chester Zoo says humans are to blame.

The tail of a feathered dinosaur has been found perfectly preserved in amber from Myanmar.

Government says it will not support highly polluting method of releasing gas from coal seams

A highly polluting method of extracting gas has been effectively killed off in the UK after the government said it would not support the technology.

Underground coal gasification, which involves injecting oxygen and steam underground to release gas from coal seams, would massively increase UK carbon emissions if exploited, according to a government-commissioned report.

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Historians unveil a digitally-reconstructed image of the face of Scottish king Robert the Bruce nearly 700 years after his death.

The giraffe is at risk of extinction after a large decline in numbers over the past 30 years, according to the International Union for the Conservation of Nature, which released its latest ‘red list’ of threatened species on Thursday. The eastern gorilla and whale shark are also deemed at high risk

• Giraffe facing extinction after devastating decline, experts warn
  

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