Professor Ross Garnaut released the final report of his climate change review in May last year. Photo: Andrew Meares
WHEN we wake up tomorrow, Australia will have carbon pricing. How will its effects compare with those expected a year ago, when I produced my Climate Change Review for the Federal Parliament's multiparty committee?
Let me focus on changes in the electricity sector, and on the international context of Australian climate change policies.
Electricity prices have four components: wholesale power generation; long-distance transmission; distribution to households and businesses; and retail services to the customer. Carbon pricing affects wholesale prices. It was expected to raise wholesale prices enough to push up total electricity prices to households by about 10 per cent. It now looks as if wholesale prices tomorrow may be no higher in real terms than five and six years ago, even when the effects of carbon pricing are included.
The upward effect of carbon pricing on wholesale prices from tomorrow will be offset to an unexpected extent by the downward pressures from an electricity surplus. Energy savings induced by six years of rising prices, better house insulation and greater consumer and business awareness have reduced electricity demand. Restructuring of the economy in response to the resources boom and the high exchange rate has also reduced demand. At the same time, generation capacity has increased with the expansion of wind and rooftop solar facilities. The overall effect has been a surplus of electricity generation capacity and strong downward pressure on wholesale prices.
Regrettably, the non-carbon sources of increased prices - distribution, transmission and retail costs - will be much as expected. Even after tomorrow, these will have contributed more or less the whole of the huge increase in household electricity prices since 2006 and 2007.
There will be small additional increases in household electricity costs from the carbon price in the next two years - a bit more than 1 per cent in each year. After that, it depends on what happens to international carbon prices. If international carbon prices in 2015 were similar to now, there would be a big fall in the component of electricity prices attributable to carbon pricing. But there is no guarantee that international carbon prices will stay this low.
The pressure for higher future electricity prices will come from transmission, distribution and retail charges, as it has in each of the past six years. Only changes to the regulatory arrangements will end the relentless upward march of household electricity prices. The good news is that over the past year, the necessary changes have been placed on the reform agenda. With weak demand growth, some established generators will reduce production. Carbon pricing will place generators with the largest emissions per unit of electricity under pressure to reduce output.
The 2011 Climate Change Review anticipated different behaviour in gas prices in two countries with huge recent increases in gas reserves. Expectations of higher gas prices in Australia reflect the emergence of a gas export industry on the east coast. The lower prices in the United States flow from a similarly large increase in local gas supplies in the absence of an export industry.
Expectations of higher gas prices mean that emissions reductions in the Australian electricity sector now are likely to come much more from reduction in demand, increases in renewable energy supplies, and contraction of coal generation than from the replacement of coal by gas.
When the carbon pricing arrangements were announced last year, there were anxieties about the disruption of electricity supplies. The anxieties have eased with experience.
International action has been stronger over the past year than was anticipated in the 2011 Climate Change Review. The review was unfashionable in suggesting that the United States government should be taken at its word. The US had advised the international community of its intention to reduce emissions by 17 per cent between 2005 and 2020.
After the House of Representatives' rejection of the President's legislation on carbon pricing had denied the low-cost path to reducing emissions, high officials advised me that the US government would achieve its emissions reductions by other means.
Since then, the Federal Environment Protection Agency has moved to tighten regulatory controls on emissions in motor vehicles. The recently proposed power regulations effectively ban new coal-based and open-cycle gas generation in the absence of carbon capture and storage. The US government has continued its strong support for research, development and commercialisation of new technologies. State-based regulation has had large effects, and California has passed legislation to start an emissions trading scheme at the beginning of 2013. These developments, alongside private harassment of investment in high-emissions activities, progress in energy saving and what the 2011 review called the ''gas revolution'', increase the chances that the US will meet its emissions reduction targets.
Across the border, Canada has moved in the other direction, with repudiation of its binding commitments under the Kyoto Protocol. At the same time, Canada has made commitments under the Cancun agreements that it will match US emissions reductions. There are contradictions to be resolved.
China has moved further and faster than I anticipated a year ago. Trials for emissions trading schemes have begun in two provinces and five cities, and there are suggestions these could lead to nationwide carbon pricing. Energy saving and the rapid, downward movement of renewable energy costs are being reinforced by huge new public financial commitments to investment in new technologies. China's large nuclear energy program, suspended for review after the Japanese tsunami, has been renewed with enhanced focus on safety.
Elsewhere in Asia, Korea has legislated to introduce an emissions trading scheme.
In the low-emissions developed countries in Europe and Japan, emissions reductions are proceeding more or less as anticipated despite the setback to use of nuclear power. Slow economic growth in Europe has meant that emissions targets are being met with much lower carbon prices over the past year.
Finally, the international agreement based on concerted unilateral action that emerged from the Cancun meeting of the United Nations Framework Convention has demonstrated its worth over the past year. The Durban meeting last December strengthened commitments from all substantial developing countries to contribute to the global mitigation effort.
Professor Ross Garnaut is an economist at Melbourne University.
The Discovery Economy: Snapette Shows You The Future Way To Shop - Fast Company
Think about how you shop for, say, new shoes.
Do you head to a mall and amble in and out of several stores, browsing the racks and maybe trying on a few things before settling on one or two items to buy? Do you remember that some stores have a weekend sale planned, and thus save your shopping trip until then? Do you just go online? Groupon? Do you get bedazzled by the array of things on offer and give up, darting to a coffee shop for solace? I suspect it's a variation on all of these plus more, because that's how most of us shop now. But that's about to change.
Store browsing is fun for some, tiresome for others but it's very often a tale of accidental self-discovery of something you'd like to buy. Advertisers and other enterprises like fashion magazines have long attempted to help you discover things you'd like to buy, but it tends to be very narrowly focussed--promoting just a few articles that represent the new look for this season.
That's been changing of late now that we're all used to having the mobile web and, more recently, digital editions of magazines in our smartphones.
But for a leap forward, check out Snapette, a digital fashion app. Launched in 2011 as a social network for women to "share images of their favorite fashion finds" it's just been completely overhauled as a new app that does something rather more powerful. The company is even heralding it as the "first location-based shopping application." It works by delivering information to the shopper based on location data. If it detects you're standing in a shopping district in New York City for example, it'll serve up to you information on items available in nearby stores as well as special offers, so you can work out if there's anything interesting in a store before you go in. Simultaneously, the app is a discovery engine because it may reveal to you something in a particular store that really appeals to you, even if you habitually never shop with that retailer.
There's also the ability to browse to discover fashion items by trend (locally, and internationally) or by brand. Meanwhile the most powerful bit is that "brands can also send real-time notifications to potential customers already shopping nearby with special discounts and the inside scoop on exclusive one-of-a-kind pieces." In other words, stores--or brands, knowing which stores their items are stocked in--can actively ping users of the Snapette app with a pop-up notification that says "Just in: New stripey green socks!" (Hey, they can look good with the right outfit!) Such notifications will excite consumers, drive sales, and drive foot traffic too.
Let's consider a couple of the subtleties in this idea. Firstly, the app may yield a very different kind of shopping experience: You may consider starting your shopping by sitting down in a coffee shop and using it to discover if there are any products or special offers nearby. Secondly, there's a ton of money to be made in the act of helping you to discover things you may like to buy. Snapette itself makes money by inserting itself into your shopping trip as a discovery agent. It relies on both user buy-in and brand/store adoption, without a userbase the app's makers would have no commodity to sell to their advertising partners, and without ubiquitous product placements and active participation from stores and brands then users would fall out of love with it. But it's likely to be closely followed by many other apps of its sort, perhaps evolving from services like Yelp--because if they make themselves the shopping app de rigueur, they may stand to make a lot of money by changing the entire shopping experience.
And simultaneously there's a booming technology that will help the precision of location-based "discovery" shopping--indoor GPS. Google and other companies like Apple have made special effort to try to invent indoor navigation systems, using data sources like Wi-Fi signals to replace GPS (which really doesn't work indoors) and user-submitted maps. But a new system from Duke University dubbed UnLoc does something even cleverer, because it uses "invisible landmarks" to help a smartphone work out where it is, and it doesn't require the same sort of wardriving system that Google's promoting. It also uses less battery power because it works out the landmarks using the phone's motion sensors--which react as their owners move through a space, or go up an escalator--in combination with sensing Wi-Fi dead spots or 3G signal drop-outs. Its inventors tested it out on campus and at the Northgate shopping mall in Durham, because they've already envisaged its use for shopping apps, and found it could locate phones to around 1.6 meters in accuracy.
Which means the next-generation of apps like Snapette will not only be able to alert you to nearby sale items, but also steer you directly to where it is--inside a store--or to direct you around a large shopping mall or department store. And with one more step it's possible to imagine a system like this seamlessly integrated into something like Apple's Siri or Google's Glass.
[Image: Flickr user rwp-roger, marcsamsom]
Chat about this news with Kit Eaton on Twitter and Fast Company too.
Broughton shopping park £13m cinema and restaurant plan unveiled - BBC News
Plans have been drawn up to expand an out-of-town shopping park in Flintshire with a multi-screen cinema and five restaurants.
Bosses at Broughton Shopping Park say about 230 jobs will be created if the £13m plans win approval.
A planning application has just been submitted to Flintshire council. A decision is expected later this summer.
Other plans include improving public transport links and cycle paths to the park close to the border with Chester.
Park owners want to build an 11-screen, 1,731-seat multiplex cinema - the first one in Flintshire which has a cinema at Mold's Clwyd Theatr Cymru.
The planning application includes a bus interchange with a pedestrian walkway linking the existing retail park with the leisure facilities.
It will be built on an "underutilised area" of car park space next to HomeSense on the southern section of the park.
Park manager Colin Gilligan said: "As well as creating vital new jobs and local investment and improving public transport and public areas, the new restaurants will enable us to attract and accommodate exciting new leisure operators which are not currently represented in the area."
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