Proper evaluation of greenhouse gas reduction policies

Arguments about how to cut Australian greenhouse emissions (incl using nuclear power) are rife. They've been all about the cost of policy options. They're partial and misleading, at best.

At least three policy questions require explicit consideration. First, how much does each option reduce emissions compared with business-as-usual (BAU)? Second, how reliable are the power supplies produced, compared with BAU? Third, how much does each cost, above BAU?

Proper evaluation of all options must answer these questions. There are big trade-offs between reducing emissions, power reliability and option cost. These must be recognised and dealt with.

These three questions themselves require elaboration for answers to them to be meaningful: viz

Reducing emissions. This must cover the full supply chain, from input resource extraction, to equipment production, to operation and power supply, to asset disposal at the end of asset lives. Comparing 'apples-with-apples', these must be compared over the same operating asset life.

Power reliability. Comparing 'apples-with-apples', this must include all measures, covering the same total reliable power generation for each option; all measures to store power where that's required; and all transmission investment, if needed, to ensure the same power to end-users.

Costs above BAU. An 'apples-with-apples' approach is needed here, too. Cost comparisons must be over the same operating asset life. All assets must be benchmarked against the life of the longest-lived assets. Adjusted 'levelised cost of energy' measures must explicitly allow for this. Costs must allow for varying estimated roll-out times for different options. Time costs, too.

Trade-offs. Scarcity makes these inevitable. Balancing between cutting emissions and keeping high power reliability means higher costs. Less emissions reduction, plus less reliability of power supplies, plus higher power costs, is one possible trade-off outcome. Remember the 'Trilemma'?

If highly-reliable power, and much more of it, increasingly is demanded, either emissions reduction outcomes are eroded, or costs increase. Or both. Both seem likely.

Suppose Australia adopts a good, if not, in some eyes, perfect, trade-off. What difference will that make to global greenhouse gas emissions and concerns about global warming? At best, very little. At worst, our less competitive economy will drive BAU offshore, making things worse.

Shifting emissions offshore, à la Europe, shuffles the national emissions deck and shifts the blame. That blame goes to countries producing emissions. Europe imports its emissions back (and more) via its emissions consumption. This, after 'virtue-signalling' by exporting its production of emissions to other countries. Bureaucratic hypocrisy, banking on others not acting.

In the USA, there's talk of a 20-year agreement between Microsoft and Constellation Energy (its owner) to restart the Harrisburg Pennsylvania Three Mile Island nuclear plant. Microsoft would contract to buy all the power it generates. It wants to secure a very reliable, low emissions, power supply for its booming data centre/AI businesses. This mooted deal reflects the trade-off between lower emissions, rising power demand, 24/7 reliability, and cost.

Looks like 24/7 reliability wins in this case, if it proceeds. Microsoft must think low emissions, plus 'always on' reliability, is good value. Using nuclear.