An interesting point

Abbott's great big axe | Alan Kohler | News | Business Spectator

Alan Kohler is one of the few commentators to give more-or-less support to the coalition policy (well, he calls it "clever" anyway), and he makes this interesting point:

....the coalition is proposing to pay the Latrobe Valley companies to convert from brown coal to gas. There are a few other ideas tacked on to make it look like a policy, not a deal, but that’s the guts of it.

It’s a good idea – first proposed in Business Spectator last November. I’m not sure the amount of money nominated – a total of $3.2 billion, with up to $2.55 billion available for power station conversion – will be enough, but it’s an opening gambit.

Hunt spelled it out towards the end of yesterday’s press conference when the journalists were nodding off listening to Tony Abbott, so what he said has been largely ignored.

He said: “One of the large power companies has provided us with their advice. Because it’s commercial-in-confidence, they didn’t want it released – but they provided us with their advice that they could convert from coal to gas for $13 per tonne under this system.

“Now we want to check that, but … the oldest and least efficient of the power providers has said to us that under the government’s ETS we’re just not going to be able to afford the capital to transition because we will be struggling just to survive… Under this they’ve said that if our balance sheets are clear and there’s an incentive to change from coal to gas, this is very attractive and we are more likely rather than less likely to change under this system.”

But the fly in the ointment is this:

Presumably Tony Abbott didn’t just announce a deal with the owners of Yallourn and Hazelwood because firstly Greg Hunt didn’t have to enough time to negotiate one, and secondly because saying you’re going to hand over large dollops of cash to Hong Kong and British companies is not as good politically as saying “No Great Big New Tax” over and over (and over).

This leaves a big opening to Labor to exploit.

The other problem for Abbott is that no one believes that big enough changes can be done without raising some extra money to pay for it. If he really wants an alternative that is simpler to understand, he should go for an actual low carbon tax with revenue devoted to cleaner energy research and deployment.