There’s remarkable unanimity among Australia’s largest businesses about the impact of the Federal Government’s emissions trading scheme.
All agree on the need to comprehensively address climate change (well, except the Australian Retailers’ Association, which doesn’t think global warming is real). All agree that an emissions trading scheme is the most appropriate approach to doing so. All agree the scheme should be as broad as possible in its coverage. And all are certain it spells doom for their sector unless they are given preferential treatment.
Put their assessments together and only one conclusion is possible: an emissions trading scheme — even the wimpy, no-polluter-left-behind model cooked up by Kevin Rudd and Penny Wong, will wreck the Australian economy. Catastrophe looms. It’s the Book of Apocalypse, the Gospel According to Rentseekers.
The most comprehensive “analysis” so far of the impact of an ETS remains the rubbish cooked up for the BCA by Port Jackson Partners. We’ve previously explained just how badly flawed this effort was, which purports to show that 3 out of 14 trade-exposed business would be forced to close and another four would be forced to “fundamentally review their operations”.
“There can be no doubt these outcomes would also apply more broadly across the relevant industry sectors,” the BCA declares. That is, 20% of trade-exposed businesses would close and another 29% would be in strife. Which means, on a conservative basis, an instant 5% drop in Australia’s GDP, and the loss of 350,000 jobs.
But don’t worry about that, we’re just getting warmed up. The paper products industry body A3P warned an emissions trading scheme would render the entire industry unviable, although Visy said it would only have to close two plants. So leaving aside Visy, you can scratch a $2.4b industry and 5,600 jobs.
The Australian Workers Union says the entire aluminium industry will be driven offshore. That’s 15,000 jobs and a $5b industry. But let’s ignore them, because aluminium is covered by the BCA, and it’d be double counting.
Bluescope Steel also reckons local steel production will cease. That’s 75,000 jobs and (using old figures) at least $21b.
And then there’s agriculture. Agriculture won’t even be in the ETS, but farmers’ groups are crying poor. The dairy industry has warned it faces up to a 60% reduction in profits, and AgForce produced modelling showing farmers faced cost increases of 15-40%. But they’re nothing compared to Mick Keogh at the Australian Farm Institute, who produced figures showing most farming sectors faced cost increases of over 100%. That is, total wipeout.
So let’s be a little conservative and say we lose 40% of the agricultural sector, meaning 4.8% GDP loss and 640,000 jobs.
How are we tracking? So far we’re looking at a 12% fall in Australian GDP and the loss of 1.1 million jobs.
And then there’s the flow-on effects of what is supposed to be the draconian effect on the electricity industry, which seem to have no difficulty passing on price rises at the moment but which will mysteriously be unable to pass on those from a carbon price.
An analysis for the electricity sector by ACIL Tasman showed retail tariffs rising by 28 percent under a 20 percent emissions reduction target, although that’s actually only 14% extra on top of what would’ve been the tariff rise anyway. ACIL Tasman evidently didn’t try hard enough, because “independent consultant” in the energy sector, Duncan Seddon, declared in the AFR last week that electricity prices would more than double.
And then there’s the LNG sector, led by the biggest sook in corporate Australia, Don Voelte. They too commissioned “independent” modelling from ACIL Tasman — showing a 30% fall in profits that would “seriously threaten the competitiveness of the multi-billion dollar Australian LNG industry.”
In fact, Woodside admitted that its forecast impact of the ETS was so massive there wouldn’t be enough money in the scheme to compensate them, which presumably means the ACIL Tasman model has a giant black hole in it where all Woodside’s permit acquisition payments would go. The sector also hired Concept Economics to show that there’d be a 37% fall in LNG production over “business as usual” by 2020.
Concept Economics crops up elsewhere as well. Which is not unexpected, because it is run by the former chief accountant to the greenhouse mafia, ex-ABARE head Brian Fisher, Henry “let the planet cook” Ergas and some former advisers to John Howard.
Fisher, a critical bureaucratic supporter of the Howard Government’s greenhouse denialism and an enthusiastic advocate of land clearing, is also on record as saying an ETS will “crucify” Australian farmers, which rather puts Mick Keogh’s doomsday predictions in the shade.
Nightmare stuff. Imagine how bad it would be the Government had actually proposed a serious effort to reduce our carbon emissions?