Australian government urged to reconsider emissions scheme
23 Apr 2009
The Australian government's Emissions Trading Scheme (ETS) is flawed, says Minerals Council of Australia chairman Peter Coates, and would cost the minerals sector as much as $2 billion a year and coalminers $5 billion over the next five years.
Coates told Australia's Senate Select Committee that the scheme, if approved, would lead to the coal mining sector to slash output by 35 per cent by 2020 under the provisions of the ETS, which would would impose new costs on the Australian minerals sector.
The government is planning to implement a carbon pollution reduction scheme to help reduction of greenhouse gas emissions.
According to Coates, the ETS would cost $5 billion and $850 million to the Australian coal and gold mining sectors respectively with producers of other commodities paying tens of millions of dollars in carbon costs every year.
Coates, who is also chairman of the Xstrata mining group, said the implementation of the ETS would result in increasing production in countries like Indonesia that are less energy efficient. He added that Australian firms would end up paying the highest carbon costs in the world.
He pointed out that coal mining would contract in Australia and expand in Indonesia, Russia, Colombia, South Africa, China and elsewhere.
Meanwhile a leading energy company has urged the government to quickly approve and implement the scheme.
AGL warned that delays would lead to higher costs to consumers. Company spokesman Tim Nelson urged that the scheme be implemented without delay.
However Greens environment spokeswoman Christine Milne said there was no point implementing a scheme with targets that are not effective. She said the scheme as it stood would not reduce emissions.
She added that the purpose of doing anything is reducing emissions and should be the focus.
Envirogen, a company that uses methane gas emissions from coalmines to generate electricity said the scheme would drive it out of business. David Hamill, chairman Envirogen said the government should acknowledge the industry's environmental contribution. He added that under the current provisions of the scheme the company would have to go in for transitional arrangements which would mean millions of dollars of lost investment, lost jobs and lost greenhouse gas abatement.
Caltex Australia Ltd spokesman Frank Topham told the Senate inquiry in Sydney the scheme should be deferred until the economy recovered.
He added that the scheme in its current form would not reduce petrol emissions over the short term and cost the industry billions in carbon permits.
He said emissions from petrol will reduce on falling demand for fossil fuels which called for reducing consumption.
