But the politics matter too. For example,
imposing a carbon price would benefit gas
dramatically relative to coal.
Gas emits under half the carbon dioxide per hour of electricity
produced. This is in addition to the other
environment advantages vis-à-vis coal, such as
the far lower levels of particulates and noxious
gases emitted upon combustion.
Therefore, if a carbon tax were introduced
at, say, $40 per tonne, then even at today’s lowly
thermal coal price of $60-70 per tonne, gas
would remain competitive at a price of $7-8. This
is broadly the price required for the future
economic development of much of the
undeveloped resources targeting Asian and
European end markets.