Recipe for uncertainty
letter published in The Australian Financial Review, 22 September 2010
Marius Klopper’s proposal that Australia set a carbon price ahead of a global agreement seems, at first glance, an own goal for a major producer of coal. How would such action maintain Australia’s (and BHP’s) competitiveness?
Of course, Klopper’s agreement to consider such a price for Australia is conditional on protecting export industries and hence BHP’s main interests. Thus, as with the BHP agreement to a rate of mining tax similar to that levied overseas, he is prepared to fall into line with the Gillard government’s absurd policy of developing a lonesome carbon price arrangement with no consideration of the views of the already large group of scientists which rejects the notion that the world faces a period of dangerous warming unless emissions are reduced.
This is a continuation of BHP’s long standing inclination to not publicly oppose government policies even when they are disadvantageous to the general well-being of Australians. But what benefit would there be in introducing a policy to reduce emissions of greenhouse gases in Australia unless there would be an accompanying comparable arrangement to reduce them in major countries overseas?
The argument that investors require a carbon price in order to provide certainty is irrelevant. An attempt to start setting a price on carbon would add to already existing uncertainty because it would be impossible to predict decisions by governments not only on the price of carbon but on the subsidisations of alternative energy sources.
Nor is there any escape from the reality that consumers would have to pay, either through higher electricity prices or through higher-than-otherwise taxes to pay for subsidies. No useful purpose would be served by returning revenue raised from taxing carbon to reduce emissions that are having minimal effect on temperatures.
If as claimed BHP has climate change experts who have examined the science, it would be helpful to publish that analysis and, in particular, to explain how a scientific consensus could exist when the various reports of the Intergovernmental Panel on Climate Change have made so many egregious errors.
Des Moore
Director, Institute for Private Enterprise, South Yarra Vic