Another day, another rent-seeking whinge from the richest companies in the country. Yesterday the Australian Coal Association(ACA) released more ‘independent economic analysis’ that said just how hard done by they would be under a carbon tax.
It was a pre-emptive strike before the much awaited Productivity Commission report, due today, that analyses the effective carbon pricing regimes of our major international competitors.
Greg Combet admirably brushed aside the Coal Industry claims, reminding people of the very obvious but often over-looked fact that a hypothetical $20 carbon price would only result in an additional cost of around $1.60 per tonne of coal. When this is compared to the sale prices for metallurgical coal (currently over $300 a tonne) and for thermal coal (currently over $120 a tonne), it is clear that the industry is having a lend of us.
Still Ralph Hillman kept a straight face whilst claiming that “These increased costs will tilt the playing field in favour of our competitors resulting in job losses in Australian coal mining for no reduction in the amount of greenhouse gases emitted.”
Of course, the ‘job losses’ that Hillman is talking about are not actual job losses. They are future projections that the coal industry would grow only slightly less rapidly than expected. In reality, it might mean a ‘massive coal boom’ rather than a ‘frantic coal rush’. Either way, the coal industry is going gangbusters with unprecedented investment in new coal mines and export infrastructure. Queensland alone is planning to triple thermal coal exports within the next decade. The expansion plans are utterly staggering.
Greenpeace yesterday took BHP to task for it’s rent-seeking behaviour. The behemoth has also been calling for special exemptions from the carbon tax despite the negligible impact on it’s immensely profitable operations.
Greenpeace calculated that under a projected carbon price of $26 per tonne, BHP’s Mount Arthur Mine in the Hunter Valley (their largest existing Australian coal operation) would face a piddling carbon tax impost roughly equivalent to only 3 days of operations (<1%). We tried to extract this carbon tax by establishing a ‘carbon tax collection point’ on the rail line leading from the mine.
If the coal industry want to continue to have even a semblance of a social licence, they are going to need to accept that they need to put back into the community for at least some of the damage that they cause. Economist Nicholas Stern estimated that the externalised ‘social cost of carbon’ is roughly US$85 per tonne, indicating that each tonne of coal that is mined in Australia does roughly AUD$240 worth of social, environmental and economic damage.
Regardless of what the Productivity Commission says other countries are doing, it is clear that an impost of only $1.60 per tonne on coal is far from adequate. While the coal industry feigns outrage in public, in private they are no doubt laughing – at our expense. Far from caving in to the fearmongering of the coal industry, the MPCCC should significantly increase the cost imposition on the coal industry so that they begin at last to pay for the damage they cause.