CPRS draft draws criticism from industry

By Paula Wallace

In a statement issued by the Minerals Council of Australia (MCA), Mitchell Hooke described the emissions trading scheme (ETS), included in the CPRS draft, as “flawed” and warned that it would harm the economy without improving the environment.
The industry has been vocal in its concerns over the proposed ETS, some saying that it is nothing more than a tax on industry’s bottom line without complementary measures employed in other countries; and because it would be introduced before the commercial-scale use of “clean coal” technologies that are still in trial and development.
“The imperative is to get the design of the ETS right - to ensure it is aligned with a global emissions reductions protocol, the deployment of low emissions technologies and other trading schemes around the world,” said Hooke.
”There will be no prizes for going it alone.”
The proposed ETS imposes the highest carbon costs in the world on Australian businesses. “In the first four years of the scheme, Australian businesses face gross carbon costs of $49.9 billion,” said Hooke.
The MCA is asking for one change to the Government’s scheme, that is a phased approach to the full auctioning of permits.
The Chamber of Minerals and Energy of Western Australia (CME) announced it was travelling to Canberra on March 10th to meet with Federal politicians and seek amendments to the Government’s proposed CRPS.
CME chief executive Reg Howard-Smith said, “Many of Western Australia’s resource companies will receive inadequate or no assistance under the CPRS proposed in the White Paper.
“This high cost impost poses a real risk of investments moving offshore resulting in an economic loss to the Western Australian economy, translating into significant job losses, without any net environmental benefit as any emissions would merely shift elsewhere.”
The NSW Minerals Council is also concerned about the effectiveness of the scheme in curbing greenhouse gas emissions, and particularly with the risk to coal industry jobs.
Chief executive, Dr Nikki Williams, said that while the coal industry qualifies for Emissions Intensive Trade Exposed (EITE) assistance under the criteria set out in the draft legislation, the industry was unilaterally excluded from EITE assistance in the White Paper.
“Since the draft legislation does not specify who’s in and who’s out of EITE, the Federal Government has left 30,000 coal mining jobs in limbo,” she said.
“The Federal Government’s failure to address the inequity in the allocation of permits to EITE industries has left the NSW coal sector isolated and vulnerable against trade competitors which would not be subject to emissions targets for the foreseeable future.
“In the past seven years we have seen a 15 per cent reduction in market share of the export thermal coal market to Indonesia, mainly as a result of infrastructure bottlenecks. This illustrates the ultra-competitive nature of international coal markets.
She said the industry is now faced with a Scheme which will impose crippling costs and “undermine Australian coal producers” which compete with Indonesia, China, Colombia and South Africa.
“Sadly, without a global agreement on climate change, it won’t result in any meaningful reduction of emissions.”
Dr Williams said that while opposed to the current scheme design, the coal industry supported an ETS as one part of Australia’s contribution to the global effort on climate change.
“Whether it is the 30,000 people directly employed or the more than 100,000 people employed indirectly, the regional communities thriving on the industry’s investment in local towns or State and Federal Governments benefiting from royalties which pay for public services, the negative impact of this scheme on the coal industry will be far reaching," she said.