Sun, May 01, 2011 - Page 5 News List

Rio warns over hasty adoption of emissions tax

TOUCHY SUBJECT:The Labor party has twice tried and failed to introduce an emissions trading scheme, the last time resulting in the ouster of its leader

AFP, SYDNEY

Mining giant Rio Tinto weighed into the debate over Australia’s proposed carbon emissions tax yesterday, urging Canberra not to rush into a decision while major polluters such as China and the US held back.

Australian Prime Minister Julia Gillard wants to charge polluters from July next year under a fixed-price scheme that would move to a full cap-and-trade model linked to international carbon markets within five years.

However, she is facing stiff opposition from her political rivals and the business community, with the powerful coal industry warning the plan will drive investment offshore and damage Australia’s mining-powered economy.

Rio Tinto voiced its objections yesterday, warning Australia not to jump the gun on emissions when few significant polluters were taking similar action.

“The question is how and when does Australia move in the light of the disappointment of the Copenhagen [climate change] conference, and in the light of the fact there are very few signs the big gorillas — the United States and China — really are going to be moving,” Rio chairman Jan du Plessis told The Australian newspaper.

Australia is the world’s worst per capita polluter, largely because it relies heavily on coal-fired power, and also exports millions of tonnes of the fuel every year to Asian electricity companies and steelmakers. It is home to the world’s largest coal export port, with total shipments worth A$43 billion last year (US$46 billion).

Gillard’s proposal would see a fixed levy placed on emissions for the first three years to five years before moving to a full cap-and-trade scheme, under which the government would set a national limit on pollution and sell permits to firms.

Those companies who exceeded their cap would have to buy extra permits from other emitters who had more than they needed, and prices would be linked to international carbon markets.

The ruling Labor party twice failed in a bid to introduce an emissions trading scheme, sparking a plummet in the polls which saw ex-leader Kevin Rudd ousted by Gillard, then his deputy, and badly damaged the party’s credibility.

Du Plessis said there was a “very clear link” between carbon emissions and global warming and commended Gillard’s courage for taking a stand, but he questioned whether it was the right time for a carbon tax.

“If the Australian government, with all the best intentions in the world, is going to move too fast and eventually simply damage energy-intensive trade-exposed business at a cost to Australia as a country whilst China and America don’t move, I am not sure that is smart,” the Rio chairman said. He called for Canberra to “give reassurances that while the government is passionate about dealing with climate change, which I admire, it is not going to do it in a way that damages Australian businesses at a time when the rest of the world doesn’t appear ready to move.”

Gillard visited Australia’s major trading partners in a whistlestop tour of North Asia last week, insisting that insatiable demand in the region for energy would buoy the nation through the transition to a carbon tax.

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