Carbon Trading: How does it work?

[Smurf1976]

Why are you being so rude to me, Julia? I'm just trying to help by showing you an inexpensive alternative.

So what unusual case do you have that would require you to spend a vast amount more than I stated? Are you running a business? Because the fact remains that for a normal residential property the cost for green energy is only $4.40 per week above your normal bill.

I won't enter the personal debate but a comment about individual energy consumption.

I moved into my present address on the 6th of January this year so I don't have a full year's data but there's enough to approximate my annual energy consumption.

First some details. It's a fairly typical mid-1990's 3 bedroom brick house with metal roof located in suburban Hobart. Timber framed construction and timber floors, most covered with carpet. Fibreglass batts in the ceiling, foil in the walls, no underfloor insulation.

Incandescent lights except the kitchen which is halogen. The previous owner must have been undecided on the heating - there's a wood heater plus a fairly low powered HydroHeat installation (ie a 3.5kW electric fan heater hard wired). Hot water is electric off-peak. Tastic in the bathroom. There's a spa but I rarely use it. Cooking is a bit unusual with a gas cooktop but the oven is electric. Only means of cooling is a simple fan.

And the energy consumption? Extrapolating the data I have so far and allowing for seasonal variation, I'd say it's about this:

Electricity total 21.57 MWh.
3.58 MWh Light & Power (including the Tastic which I'd estimate at 0.22 MWh)
12.17 MWh HydroHeat (the electric space heater)
5.82 Off Peak (hot water).

In addition to that I'd estimate 3 tonnes of fire wood. That's about 13.5 MWh but 40% of that heat will go up the flue so it's about 8.1 MWh of actual heat put into the room. Smurf's a tad biased toward using the electric heater, but at only 3.5kW it's not up to the task during proper cold weather so some wood is needed.

Gas - the first bottle is still going strong. I'd estimate it's only 20kg of LPG a year including the BBQ. That's about 0.28 MWh.

Petrol for the mower - about 0.05 MWh (5 litres).

So the grand total is somewhat a shocker. A grand total of 30 MWh not including the heat lost up the flue. And 68.3% of that total is for heating, 19.4% is hot water and the other 12.3% is everything else.

My energy use would drop by 70% simply by moving to Darwin.

As for what I actually plan on doing to reduce consumption, no surprise for guessing there's quite a bit. Heat pump for heating, heat pump hot water and some better lighting. Floor insulation I'm looking at but there are some issues with doing it. Once that's all done I should end up down to about 12 MWh of electricity, gas and petrol use unchanged, wood no longer used. That's a long term plan though and will take a while to implement.

...

Some good news though. Yet another hydro plant in Tassie opened yesterday. It's absolutely tiny - only runs a few hundred houses - but every bit's a help. http://www.abc.net.au/news/stories/2008/07/18/2308176.htm

 

[Julia]

Smurf, I'm interested that you cite the use of a heat pump as a means of reducing your consumption. My power bill has gone up exponentially since I have using a heat pump. Could you explain what you mean?

And thanks indeed for all your other informed explanations.

 

[Smurf1976]

Smurf, I'm interested that you cite the use of a heat pump as a means of reducing your consumption. My power bill has gone up exponentially since I have using a heat pump. Could you explain what you mean?

An ordinary (non-heat pump) electric heater is 100% efficient in turning electricity into heat. That is, you put 1kW of electricity in and you get 1kW of heat out.

But a heat pump does not itself produce heat. It simply extracts heat from the air (or some other source like water) and transfers that to the air or water that you want to heat. In doing this it produces about 3kW of useful heat into your room or water for every 1kW used to run the compressor. (That figure will vary with outside air temperature etc).

So assuming you want to put a fixed amount of heat into the room, water etc you will only need one third as much electricity to do it with a heat pump. If I want to put 12 MWh of heat into the house then an electric heater needs 12 MWh of electricity to do it. A heat pump will provide the same amount of heat using just 4 MWh of electricity. Hence it's cheaper to run.

Heat pumps have been heavily promoted by the electricity industry in Tas since the late 1980's for a simple reason. Put in an ordinary electric heater and consumers think it's great - until they get the bill. Then that heater is promptly removed and they go back to wood. But get them to spend $2000+ on a heat pump that costs little to run and you've got a long term customer for electricity, albeit a relatively small volume of it.

Given the serious air pollution problems when 60% of homes had wood heating during the 80's and early 90's, a move to electric heating is an environmental plus and there has been a government funded program encouraging it for this reason. (Since I also have electric heat, I only run the wood fire when it's really cold thus being able to burn the fire nice and hot which avoids visible smoke).

I don't have present figures, but over 25% of Tas homes would have heat pumps as the main source of heating and I'd estimate they're in at least 80% of newly built freestanding houses (units etc tend to be simple electric heaters due to cost cutting during construction). Over the past 30 years, the dominant form of heating has shifted from oil to wood to electric and now to electric heat pumps. With heating being 50% of household energy use in Tas and a significant household cost there's a strong incentive to use whatever is cheapest.

In my own situation, it's not simply a case of swapping heaters. Unless I want to make the room look permanently like a construction site, I'll need to do quite a bit of work. Take out the wood heater, remove the hearth, replace the carpet, remove the ceiling fan that's in the way, install new lighting due to loss of the fan/light, patch up the holes in the ceiling from the wood heater flue and repaint. And then install the heat pump.

For the electric heater, I could leave it in place on the wall or remove it. If I remove it then it's a complete repainting job as well since the fancy effect type paint would be virtually impossible to patch without making a mess of it. And there's no paint behind the heater plus a hole where the wiring comes through.

So I won't be doing all of this tomorrow. It's a longer term project that's more in the category of a small renovation than a simple change of heater. Obviously I'd be in more of a hurry if the existing heating was oil (by which I mean an oil burning heater not an electric oil-filled heater) as that would come to about $4500 a year. But $1500 a year total for the electric and wood versus $700 for the heat pump (no wood), a saving of $800 a year, isn't such a strong incentive to change in a hurry given all the work and expense involved.

For the hot water, that again isn't simply a swap since the present HWS location is under the house and not suitable for a heat pump. So it makes sense to change when the existing one wears out and a plumber will be needed anyway rather than doing it straight away. Since a heat pump will save 65% versus typically a 50% saving with solar in Tas the heat pump is a winner - and it's a bit cheaper to buy and install too.

So in my situation it's cheaper and easier to pay to pollute for the moment but I'll be going green over a period of time. If carbon goes to $100 a tonne then that would put a rocket under my plans but at the moment there are others who can save emissions more easily than I can - and that's how carbon trading is supposed to work. I'm not actually adding any CO2 to the air by delaying, it's purely a financial issue now that carbon trading's a goer.

As for why Julia's power bill went up with the heat pump, I'm puzzled by that one. Was this a straight replacement of an ordinary electric heater / hot water system with a heat pump with no change in use? Or was it to replace gas / oil / wood or installed where no heating was installed before. Or has there been a change in use such as different temperature setting, running 24 hour heating instead of just a few hours a day etc? Or, is it in a warm climate running primarily for cooling where no cooling was installed before thus cancelling out any saving on heating costs? Or has the heat pump been connected to a continuous electricity tariff whereas you previously used off-peak? Lots of possibilities here but the heat pump should certainly be using less electricity than an ordinary electric heater providing the same amount of heat.

 

[Julia]

As for why Julia's power bill went up with the heat pump, I'm puzzled by that one. Was this a straight replacement of an ordinary electric heater / hot water system with a heat pump with no change in use? Or was it to replace gas / oil / wood or installed where no heating was installed before. Or has there been a change in use such as different temperature setting, running 24 hour heating instead of just a few hours a day etc? Or, is it in a warm climate running primarily for cooling where no cooling was installed before thus cancelling out any saving on heating costs? Or has the heat pump been connected to a continuous electricity tariff whereas you previously used off-peak? Lots of possibilities here but the heat pump should certainly be using less electricity than an ordinary electric heater providing the same amount of heat.

Thanks, Smurf. No, our heat pump was not replacing any existing system.
It was installed to heat the pool water. So obviously I expected a considerably increased charge for the electricity. Was just surprised at how much! It wasn't practical to have it connected to off-peak supply as apparently they produce the most heat in the warmest time of the day which is full tariff. I'm surprised that they are considered to be so efficient, given that the solar heating alone (with a roof temperature of about 45) (ambient temp about 26) will raise the water temperature in a 50,000 litre pool one degree in one hour, whereas the heat pump will take three hours in the same conditions to raise the water temperature the one degree.

 

[Smurf1976]

Thanks, Smurf. No, our heat pump was not replacing any existing system.
It was installed to heat the pool water. So obviously I expected a considerably increased charge for the electricity. Was just surprised at how much! It wasn't practical to have it connected to off-peak supply as apparently they produce the most heat in the warmest time of the day which is full tariff. I'm surprised that they are considered to be so efficient, given that the solar heating alone (with a roof temperature of about 45) (ambient temp about 26) will raise the water temperature in a 50,000 litre pool one degree in one hour, whereas the heat pump will take three hours in the same conditions to raise the water temperature the one degree.

Efficiency in this context is simply a case of output compared to input with speed being ignored.

Worth noting that it will take about 58 kWh to raise that pool temperature 1 degree. That's one impressive solar system you've got there! To put that in perspective, a split system air-conditioner usually has an output of 4 - 9 kW (input 1.3 - 3kW) and a plug in electric kettle is normally 2.4kW. So 58 kW is some serious heating and it wouldn't be cheap to buy a heat pump of the same output capacity. Your heat pump is probably closer to 20 kW output using 6 - 7 kW to run it plus whatever the water pumping uses.

To heat the pool 1 degree with the heat pump would require burning about 7.5kg of black coal to generate the power. That would be 22kg of coal if you used a simple electric resistance heater rather than the heat pump. And if you burned the coal directly in a small boiler at home you would need about 12kg plus the energy to transport the coal. So the heat pump is the more efficient one in terms of energy use - but with solar the energy is free so that's even better for suitable applications.

 

[Julia]

Interesting, Smurf. Thanks for the explanation.
The efficiency of the solar system derives from the fact that there is about 160% of the pool's surface area in collector tubing on the roof. When people complain that solar heating is ineffective it's because they rarely install enough collector tubing.

 

[pan]

Currently doing economics, found an article to do with basic economics and what emissions trading is all about..

http://economics.mrwood.com.au/article.asp?id=139

 

[Buddy]

I guess a few of you, if you read any of my posts, have gathered that this little bud doesnt think much of garnaut's scheme. Its a tax and is being used by the government polies and bureaucrats as a revenue gathering exercise. But I would like now raise another issue......

Even though I do not have any hard numbers, I would hazard a guess that the so called carbon emitters (power, mineral processing, transport, manufacturing, agricultural machines, etc) far outweigh the carbon soakers (a few wind generators, tree farms, and what else). Probably by orders of magnitude. So all the emitters are going to be paying, collectively, a huge amount of tax to someone, whilst the few soakers get a few pennies. So, where does all the money collected from the emitters go? Maybe ultimately the whole thing may get into balance, when the emitters go bankrupt, all the jobs are exported to China/India and there is mass unemployment, whilst the soakers work out that the can make a buck out of this. But in the meantime there is a bucketful of money going into consolidated revenue.

See, the whole problem with this crazy idea, is that (as Julia says) the government hasn't explained the detail. And no one can question it because they have taken the high moral ground - to argue against it is heresy. Maybe there some data around but I havn't seen it yet. So when is the government going to explain:-
1) Exact cost of per tonne, of the carbon vouchers for both emitters and soakers.
2) Exact projections, by year, of reductions in CO2 (even krudd admits he cannot provide this data). If he can't do this, what exactly is the bleedin point?
3) Exact cost to the emitters, of how much tax revenue is involved
4) Exact benefit to the soakers, of how many tax vouchers they receive. And is it actual money in the pocket or a rebate against tax that they would/might pay.
5) How about a balance sheet, and benefit statement. (And "benefit statement" is not defined as some half assed greeny feel good motherhood statement). I want to see data!

See, its a duck. A Tax.

 

[r34ztune]

I agree with the scheme in principle, however when you consider Aust makes up for 1-2% of total emissions, it is going to have little effect unless the major players come on board ie- china and india. Why should we cut our own throats just to set an example to the rest of the world? Brace for worse times ahead, we should of known Labour is in power.

 

[chops_a_must]

I agree with the scheme in principle, however when you consider Aust makes up for 1-2% of total emissions, it is going to have little effect unless the major players come on board ie- china and india. Why should we cut our own throats just to set an example to the rest of the world? Brace for worse times ahead, we should of known Labour is in power.

Do we have 1-2% of the world's population? That'd be a good reason why, and a place to start your questioning...

 

[Julia]

Buddy, I share your scepticism. At the same time as announcing that there would be a scheme, the government should have clearly set out how it would work. I don't think they really know. (Very funny parody on last week's Clark and Dawe segment on the 7.30 Report, btw.)

As far as where the money will go, I think Garnaut suggested that quite a large percentage of it (?50%) should be used to compensate householders for the increased cost of living. (I'd believe that when I found the money in my bank account.) Not sure about the rest. Vaguely think he suggested some be retained for R & D.

I can't believe the Opposition are not all over this lack of detail from the government. It's a first class opportunity to score some points and they are too engrossed in their own petty squabbles about the miniscule differences between what Nelson and Turnbull have said.

So far it seems to have been left up to business to raise objections, e.g. Qantas.

 

[chops_a_must]

I can't believe the Opposition are not all over this lack of detail from the government. It's a first class opportunity to score some points and they are too engrossed in their own petty squabbles about the miniscule differences between what Nelson and Turnbull have said.

Because they can't even make up their mind and have been shown to be incredibly inconsistent, whilst trying to walk both sides of the street.

 

[r34ztune]

Do we have 1-2% of the world's population? That'd be a good reason why, and a place to start your questioning...

what point are you trying to make?

 

[chops_a_must]

what point are you trying to make?

Better to keep your mouth closed and be thought a fool, than to open it...

 

[Julia]

Better to keep your mouth closed and be thought a fool, than to open it...

Nothing foolish about not knowing everything. Don't know why you couldn't have simply answered the question.

The point that Chops_a_must would have made if he could have been bothered is that Australia's percentage of the world's population is a mere 0.32%. So therefore the climate change fanatics can say we are producing more emissions per head of population than some other countries.

Hope this helps.

 

[korrupt_1]

Currently doing economics, found an article to do with basic economics and what emissions trading is all about..

http://economics.mrwood.com.au/article.asp?id=139

Great link... putting it in terms of 'donuts' makes it all clear now... LOL...

 

[chops_a_must]

Nothing foolish about not knowing everything. Don't know why you couldn't have simply answered the question.

The point that Chops_a_must would have made if he could have been bothered is that Australia's percentage of the world's population is a mere 0.32%. So therefore the climate change fanatics can say we are producing more emissions per head of population than some other countries.

Hope this helps.

Would have thought that that was implied.

The point being if you couldn't understand what I said, you really aren't going to get what you just said. And it's not just some other countries Julia. :

 

[r34ztune]

Nothing foolish about not knowing everything. Don't know why you couldn't have simply answered the question.

The point that Chops_a_must would have made if he could have been bothered is that Australia's percentage of the world's population is a mere 0.32%. So therefore the climate change fanatics can say we are producing more emissions per head of population than some other countries.

Hope this helps.

China emits 25% less emmisions per head than US, and 50% less versus UK, does this make China less of a worry? My initial point was Australia is a small player in this, why should we jump on board early, face increased costs, and pay the price for setting an example, while the big players refuse to get on board.

 

[CommonSense1967]

Can anybody shine a light on this for me (or give me a sensible explanation).
To me the numbers don't add up!
We pollute the world with +-30 billion tons of CO2 per year extra than nature puts in the air by it self.(and still rising)
The world still has about 30 percent of woodlands left on its landmass that is above the water, this can absorb (convert) about 5 billion tons of CO2 per year. Unfortunately we are reducing it at an alarming rate, which doesn't help.
The oceans and seas can absorb CO2 as well and absorbs about 11 billion tons of CO2 per year. Nobody knows how long oceans and seas will be able to do so.
So we are creating 14 billion of CO2 per year more than we can naturally expose of.
Even if we would plant all the landmass with trees, we are not able to absorb the 30 billion tonnes of CO2.
So to me the numbers don't add up. I might not have taken all the factors in consideration. One thing that more CO2 in the air allows for aswell is quicker growth of plants, between 15 and 30 percent (this depents on also on how much nitrogen is in the soil).
So how does a trading system works if you have CO2 emissions on one side and not enough natural resources on the otherside to neutaralise them.
The only way to prevent CO2 emmisions enter into the atmosphere, is by having a good look at ourselves, because we are all the cause (yes including me) of what is hapening to our planet right now. All these things that we create around ourselfs, that we so called can't live without. The whole throw away societies that we create and embrace, are they making us happy? Is this how we want to live, isolated in our little cocoons (houses), scared of anything and everything outside. People conning eachother to get ahead, polititions lying to everbody that want to hear their crap as long as they can get into power and once in power making sure they confuse the hell out of everybody by creating difficult systems (carbon tax or carbon trading) to come up with the money to warrant their own existance.
I think it is a good time to have a look at ourselves and ask ourselves what can we change to make this world a better place. It all comes down to excepting the fact that we are all part of the problem, so we all need to come together to fix it.
This problem can't be fixed on a goverment level (it will not be fixed by a carbon tax or carbon trading), it has to be fixed at community levels with availible technoligies.
That said I don't think we will have much luck, just looking at history. We probably destroy man kind, but the earth will go and revive itself from mankind.

 

[sails]

These abatements seems crazy. We are talking about serious billions of dollars here that this government wants to see sent to who knows where and to be spent by whoever to pay some sort of penance for the air we breathe, our bush fires, our farting cows or any other naturally occouring co2.

And according to the second article here, it would seem that trading carbon is not actually going to reduce emissions. It is simply a transfer of wealth for other countries to spend as the choose. And it is a major transfer of taxpayer supplied funds, imo.

Surely this will only discourage people to work when they are taxed to support other nations? Let alone the additional 10% of carbon tax that is supposedly going to the UN.

Is the ALP trying to reduce Australia to a third world country? Is this just a big wealth leveller so that those who train and work hard will have to support those who do not - even in other countries?

This is unbelievably stupid, imo...



Full article from the HeraldSun by Terry McCrann: Paying foreigners for our power

But the single craziest aspect of the carbon (dioxide) tax lunacy is that it actually aims to have us paying perhaps $4 billion a year to foreigners just for the right to keep our lights on.

We wouldn't actually get anything tangible for the $4 billion - that's around $170 for every Australian, $680 a year for a family of four. Just the 'right' to keep producing electricity from our coal-fired power stations.

and

Full article from the Telegraph by Simon Benson: $57 billion to clean up others' backyards

POLLUTERS will be spending $1500 per person on foreign carbon credits just so the nation can meet its ambitious target of reducing emissions by 80 per cent by 2050.

But Australia's own domestic carbon emissions will have barely changed from the levels being belched out today.

The long-term scenario revealed in Treasury's own modelling on the carbon tax shows that Australian polluters will be spending $57 billion a year on clean energy projects in other countries by 2050 to meet our own pollution abatement targets.