The Chamber of Minerals and Energy of Western Australia chief executive Reg Howard-Smith has raised concerns at the recently released Commonwealth Government’s Low Pollutions Future Report entitled ‘The Economics of Climate Change mitigation’.
“The use of optimistic assumptions will tend to underestimate the impact on the broader Australian economy, as well as on specific sectors such as the resources industry,” Howard-Smith said.
“Many of our member companies are involved in both emissions intensive and trade exposed industries and, are consequently concerned by the Report’s claim that there is little evidence of any risk of investment moving offshore.
“If Australia becomes too expensive for energy, then companies may make decisions to move processing offshore.”
According to Howard-Smith, the CME has worked closely with the Minerals Council of Australia (MCA) on Climate Change issues and is concerned the Treasury assumptions are too optimistic and do not reflect current industry estimates.
CME also endorsed claims that Treasury underestimates the cost of carbon capture and storage technology, uses low estimates of international oil and gas prices and makes implausible assumptions about the extent to which the industry can improve its energy efficiency.
“The recent economic downturn has, seemingly, not factored into the Treasury modelling,” Howard-Smith said.