All those Greenies at the Australian Future Directions Forum must have really had an impact because a resulting Crikey item – “Totally Addicted to Coal”
– has sparked a number of interesting responses. There has certainly
been some challenges to the Greenpeace line that Australia’s fossil
fuel industries receive many billions a year in taxpayer subsidies.

Take the NSW mining industry, which is about 80% coal, as an example.
Apart from the argument about subsidised power to aluminium smelters,
the industry claims it doesn’t receive any subsidies. Half the pre-tax
profit goes to the State Government, another quarter to the Feds and
this came to around $1.4 billion last year in NSW alone.

The Carr Government worked hard to label NSW Australia’s highest taxing
state so it should come as no surprise to learn that royalties went up
nearly 100 per cent two years ago. Why not cut the volume related
royalties and replace it with a carbon tax to really get the market
incentives moving in favour of lower emissions without crippling the
industry?

On the question of a carbon tax, it isn’t so much what the
coal industry could sustain (80 per cent exported),
but rather what the Australian economy could sustain. Demand for
energy is highly inelastic, which is why fuel excises are so lucrative for
government. Further taxing coal will put up the price of energy, which
will be both inflationary and drive energy intensive industry offshore.
Cheap energy is one of Australia’s few
comparative advantages. It’s a brave and tough call to cut it
loose. That’s what governments globally are realising about
climate change policy – talk is cheap, but action is not.

Then there is this conspiracy of
influence that Four Corners (check out Andrew Bolt’s de-bunking here) and Crikey have seperately raised. Of course the resource
industry is influential. Just like the farm sector.
Just like the manufacturing sector. That’s because resources
constitute a critically large part of the economy. It’s not a
secret. It’s not a conspiracy. It’s obvious.
Governments ignore their major wealth generators at their
peril.

Many in the mining industry profess to support a drive to a
lower carbon energy supply in Australia, but rail against any form of carbon tax.
It is generational change at a time when China will build 550 new
coal fired power stations in the next decade to help drag a billion people out
of poverty. It’s a tricky morality. You need to
create wealth to help deliver the solutions.

Finally, the NSW
Parliament has just released this background paper on climate
change. It’s one of the best you’ll read as a genuine, articulate,
impartial summary of the science behind the arguments about climate change.
One Crikey correspondent particularly liked the way it challenges the idea of the validity
of consensus in science. To quote Michael Chrichton:

“The work of science has nothing to
do with consensus. Consensus is the business of politics. Science, on the
contrary, requires only one investigator who happens to be right, which means
that he or she has results that are verifiable by reference to the real world.
In science, consensus is irrelevant. What is relevant
is reproducible results. The greatest scientists in history are great precisely
because they broke with the
consensus.”

Indeed! The same goes for some of the greatest politicians and media outlets in history.

Peter Fray

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