Emissions Scheme Tough on Miners
Australia’s key export industries will face the toughest emissions trading scheme in the world, even if all the Coalition amendments are adopted by the Government. This is the finding of new analysis, says Mitchell Hooke, CEO of the Minerals Council of Australia.
Australia’s CPRS, even if amended, will still be world’s toughest
Statement from Mitchell Hooke, Chief Executive Officer, Minerals Council of Australia
Australia’s key export industries will face the toughest emissions trading scheme in the world even if all the Coalition amendments are adopted by the Government.
That is the finding of a new analysis comparing key provisions of the Carbon Pollution Reduction Scheme and the European Union’s emissions trading scheme.
The analysis prepared by BAEconomics applies the European Union’s eligibility rules for transitional assistance for trade exposed firms to Australian industry. It shows that up to 38 Australian business sectors that will confront the full CPRS energy tax would be shielded if they were located in the European Union.
These 38 sectors include food processing, manufacturing, automotive exports, mining and minerals processing.
This comprehensively debunks claims that Australian industry and exporters will be given an easy ride under the CPRS as it is currently designed, or if it includes the Coalition amendments.
The analysis shows that the CPRS provisions to protect the competitiveness of Australia’s trade exposed firms are much narrower than the EU scheme. The report identifies dozens of sectors where European firms will face a much lower burden than their Australian competitors.
The BAEconomics report makes it possible to compare support provided by i) the CPRS, ii) the CPRS with Coalition amendments and iii) the assistance that would be provided if Australia adopted EU rules.
If Australia adopted the EU criteria for maintaining market share and jobs, Australian exports worth around $145 billion would be shielded from the full CPRS energy tax.
That represents around 70 per cent of the value of Australia’s top 25 exports, which were worth about $206 billion to the economy in 2008.
Under the CPRS, Australian exports worth just $30 billion will receive partial ‘shielding’ from the full impact of the proposed new energy tax.
That represents just 15 per cent of Australia’s top 25 exports.
Under the CPRS with the Coalition amendments, exports worth $100 billion will receive shielding from the full impact of the scheme. That represents nearly 50 per cent of the value of Australia’s top 25 exports.
The analysis further demonstrates that the CPRS, in its current form, is out of step with international practice. Unless the CPRS is better aligned with global efforts to reduce emissions, it will simply result in lost international competitiveness and carbon leakage as international customers source minerals from lower cost producers.
If these flaws are not addressed, the economic consequences of this policy failure will be felt most acutely in regional Australia where 1 in 4 jobs is dependent on exports.
The Coalition amendments address many of the flaws in the CPRS, including by expanding the number of sectors that will face a lower rate of the energy tax until other nations take on matching commitments.
But any watering down of these amendments would, by definition, increase the level of competitive disadvantage faced by Australian industry and exporters, and thus increase the prospect of thousands of lost jobs in Australia’s export sectors.
The BAEconomics report can be found on the Minerals Council website.
Source: www.minerals.org.au