Xstrata Australia Chairman, Peter Coates, has slammed the Federal Government’s Carbon Pollution Reduction Scheme at yesterday’s Swiss-Australia Chamber of Commerce and Industry (SACCI) lunch, saying the Scheme is fundamentally flawed.
“In the middle of all this turmoil and this global financial crisis, this unprecedented financial impact, what are we doing? We’re going to start off an emissions trading scheme, a carbon pollution reduction scheme, well I think that’s just crazy stuff,” Coates said.
Coates said that one of the current scheme’s fundamental flaws include that it is not linked to, or conditional upon, the development of a global protocol.
“Even if Copenhagen fails, Australian firms will be paying $8.5 billion in carbon costs every year from 1 July next year,” Coates said.
“None of our competitors will confront any such costs.”
Another flaw in the Scheme, according to Coates, is that the CPRS is not linked to the availability of low emission technologies.
“By imposing a $34 billion burden on Australian business in the first four years, it will reduce, if not largely eliminate, the ability of Australian firms to invest in new technology,” he said.
“Kevin Rudd said recently, ‘The world is going to rely on fossil fuels for many years to come’. An emissions trading scheme without the availability of technology to reduce emissions is nothing more than a tax.
“In fact the Government is planning to raise $11 billion from this emissions trading scheme in the first year, and it will redistribute $6 billion back to low income household to offset the cost of the scheme for them.
“If we’re not going to invest some of that money we collect in technology, then it is nothing more than a tax.”
Coates also said that there is a serious risk of ‘carbon leakage’ if the Scheme is introduced in its current form.
“If firms are squeezed out financially from growth in Australia because of this scheme, then the coal or aluminium will be produced somewhere else, and you can guarantee that it will be produced in areas where energy is less efficient,” Coates said.
“While we may achieve a small reduction in Australian CO2, we believe the scheme will not achieve global reductions. In fact, we believe the scheme will lead to carbon leakage or global increases.”