CPRS concessions not enough says mining industry

The government put a deal to the Opposition on the proposed Carbon Pollution Reduction Scheme (CPRS). The statement read, “The deal will ensure that Australia can achieve its ambitious unconditional target of 5 per cent; conditional target of up to 15 per cent and top-end target of 25 per cent off 2000 levels by 2020 if a global 450 parts per million outcome is achieved.”
However, the latest compromises in the proposed CPRS legislation represent the third time the government has expanded assistance to emissions-intensive, trade-exposed (EITE) industries since it initially released the design for an emissions trading scheme (ETS) in 2008.
Under the concessions, industry will receive significant new assistance, with the main beneficiaries being the electricity generation and coal mining sectors.
The coal industry will get $1.5 billion over the next five years, double the previous level of assistance. Electricity generators will receive $7.3 billion in assistance over ten years, up from $3.9 billion but falling short of the Coalition’s demand for $11.7 billion in assistance over 15 years.
The government also rejected the Coalition’s call for waste methane emissions from “gassy” mines to be exempted under the scheme.
Some have suggested that the politics of the CPRS have overtaken the economics in recent months and that the government’s increasing assistance to industry does not improve the chances of Australia meeting its greenhouse gas abatement targets.
With the Federal Coalition announcing its support for the amended emissions trading scheme, the bill now looks set to be passed through the Senate on November 27th even if half the Coalition senators cross the floor.
The Greens are still opposing the passage of the CPRS, but for different reasons to the Coalition, saying the Prime Minister's “$7 billion offer to the Coalition is a black day for the environment”.
The Greens Leader, Bob Brown, said, “His [Kevin Rudd’s] polluters' pact offer gives us less than a 50 per cent chance of avoiding climate catastrophe. It is a death knell for the Great Barrier Reef and the Murray Darling, and a disaster for Australia's employment and food security.
"The Prime Minister is quite correct that the CPRS will give a long term investment signal to business, but the signal it gives is 'roll on coal'.
"What we'll now see is Queensland and NSW approving new coal fired power stations, Victoria refurbishing its brown coal stations and WA recommissioning old coal power stations.”
Brown believes this makes a “mockery” of an emissions trading scheme which gives a signal for no transformation.
The mining industry was vocal in its continuing opposition to the proposed CPRS, maintaining its stance that Australia should wait until there is a more ‘level playing field’ internationally.
“But even after today’s amendments, only 10 to 15 per cent of Australian minerals exports…will receive any ‘shielding’ from the world’s highest carbon costs,” said the Minerals Council of Australia’s Mitchell Hooke.
“Without a Copenhagen deal the consequences for Australia are simple, but devastating. The revised CPRS will reduce the competitiveness of Australian industry. New investment will be lower as a result. There will be fewer jobs in exporting and import competing industries,” he said.
The MCA said the ‘concession’ in the CPRS package will mean that the Australian coal sector will pay $12.5 billion rather than $14 billion in carbon costs to 2020.
It said the Australian gold sector will still face costs of between $1.6 and $2.3 billion to 2020 while Australian nickel producers will face costs in the range of $1-$1.5 billion over the same period.
Queensland Resources Council Chief Executive Michael Roche said the coal industry was ‘profoundly disappointed’ at the minimal reduction in massive “new taxes” on Queensland's mining industry.
“Even with a doubling of assistance to ‘gassy’ mines, the risk to jobs will re-emerge more strongly as assistance dries up after 2015.
“Looking beyond existing mines it is obvious that this new tax will make Australia less attractive to coal mine investment particularly as there is no provision for new mines or mine expansions in the package,” he said.