Amazing, I understand your point, but in the grand scheme of...

Amazing, I understand your point, but in the grand scheme of things the proposed price of carbon is really at the margin. The real value with the fuel cell is its ability to use less inputs to deliver the same amount of enegy at the point of consumption. But I take the point, coal will always be cheaper than gas unless you wack a massive tax on coal. However, there is likely to come a day when these fuel cells trade for the price of a dishwasher (german one of course).

However, one thing the proponents of an Australia only price on carbon seem to forget is that the carbon price may simply reduce the demand for electricity and counter-intuitively reduce the attractiveness of investment in new generaion infrastructure. If the price on carbon or alternative electricity results in the closure of major manufacturing in Victoria e.g the portland smelter, the car makers, steel plants, and cement producers, the demand for electricity in Victoria will plummet. While there is uncertainy as the transition plays out, capital wont find its way to electricity infrastructure.

The point is simple, we can reach our carbon target two ways. Reduce our output by switching to lower carbon alternatives (this requires risking capital) or reduce our output by shrinking our economy (well the non-mining elements of it) (a no capital alternative). I suspect the later is the more likely outcome.

When treasury modelled labor's former emissions trading scheme it made some amazing finding that never found mainstream media for some curious reason. But Treasury's bottom line was this. Australia really cant afford to reduce its emissions. Indeed, the way Australia would meet the target was by purchasing the surplus emissions of the lesser developed nations in Africa and elsewhere. In Treasury's opinion that would be the most economical way to get there. The present carbon tax has no international linkages like the ETS, so we wont enjoy the option of buying others surplus emission.