Without a price signal on carbon, some of Australia’s highest emitting power stations running on brown coal could remain in operation while other, less emitting plants are underused or shut down.
Frank Jotzo and Salim Mazouz have published a proposal for a market mechanism to achieve early closure of brown coal fired power stations. Plants would bid competitively for exit payments, and remaining plant operators would pay. The scheme could save significant amounts of carbon dioxide emissions. It could overcome difficulties that plague alternative schemes for payments or regulation for power plant closure. The initial proposal has found strong interest across a wide spectrum in industry and in policy circles.
Paper: Brown coal exit: a market mechanism for regulated closure of highly emissions intensive power stations
Public forum: Australia’s electricity sector: policy options to support a low-carbon transition, 29 February at Crawford School, with speakers from CSIRO, Grattan Institute, The Climate Institute, AGL, the Climate Change Authority, and ANU.
Parliamentary inquiry: Senate inquiry into Retirement of Coal Fired Power Stations. Discussion and quotes in Chapter 3 of the final report.
Policy blueprints: The proposal is referenced in the Australian Labor Party’s climate policy platform of April 2016.
Video recordings of talks and panel discussions available here.
Among many others, the following articles and interviews in the national media discuss or mention the proposal (in reverse chronological order):
Mark Ludlow in the Australian Financial Review: Election 2016: Profitable brown-coal power a hurdle for Labor’s renewables
The Guardian on Frontier Economics’ statements: Labor policy could increase power prices by 8% to 25%, economist says
Peter Hannam in Fairfax media: Labor would introduce carbon market, pledge deeper carbon cuts if elected
Statements by AGL CEO reported in The Guardian: AGL boss_ regardless of climate science, it’s time to drop the ‘emissions business
Ross Gittins’ column in Fairfax media: Auction should be held to close coal stations
Australian Financial Review: Coal plant closure scheme a solution to Paris promises
The Age / Sydney Morning Herald: Why we’ll have to pay polluters to stop polluting, as soon as possible
Lenore Taylor in The Guardian: Radical plan proposes power generators pay to close dirty coal competitors