Wednesday, February 16, 2011

Carbon taxes

There is growing concern that carbon taxes will make the economy uncompetitive. South Africa seems determined to lead by example in curbing its carbon emissions. This is futile, because its total emissions (about 125Mt carbon a year) are less than the annual increase in China's emissions. The IRP2010 draft could have yielded an excellent result. Instead, it was corrupted by forcing the model to accept expensive wind energy, such that within a few years there was an huge excess of generation capacity. That made little impact on emissions, so then the Department of Energy removed coal-fired power stations from service the moment they reached their nominal end of life - regardless of the fact that they produce the cheapest energy and that refurbishment to extend their life is easily the most cost effective way of meeting the demand. In that way, the cost of electricity increased considerably, all to achieve a target which was set, not by some carefully considered plan, but by a scenario exercise. It all goes to prove that scenarios should never be used for planning - they merely set the bounds on plans

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