The actual economic effort of Australia’s homes and business, not identical formal international targets, should be the basis of Australia’s contribution to future climate change agreements.

Australia has a track record of emissions management and honouring its international commitments: bettering its Kyoto obligations, on track to meets its 2020 targets and demonstrating a consistent improvement in emissions intensity over the past two decades.

This should guide the decisions on setting the contribution of Australia at the United Nations’ talks in Paris later this year, the MCA submission to the Climate Change Authority’s Special Review says.            

“Australia has been wrongly cast as a laggard in international climate efforts. The evidence shows this is simply not true,” Minerals Council of Australia chief executive Brendan Pearson said.

“As we consider our next contribution, Australia should adopt a practical approach grounded in economic fact.”

In its submission to the CCA’s Special Review, the MCA argues that Australia must bring a clear understanding of the costs of setting a target.

The resource and emissions intensity of our economy and trade, our relatively fast trend rate of economic growth and our fast population growth make Australia very distinctive among advanced economies. Minerals and energy exports, for example, account for nearly 60 per cent of Australia’s merchandise exports, compared with the OECD average of around 11 per cent. This distinctiveness needs to be taken fully into consideration by Australia’s policy makers in considering the review of Australia’s emissions target.

Australia’s minerals industry operates in a global context where investment opportunities exist in other resource-rich countries and where capital, skilled labour and technology are highly mobile. In taking on new domestic and international emissions commitments, it is critical that new layers of cost added to the economy through additional abatement commitments are roughly in line with the costs borne by comparable countries, including our major trading partners.

Not to do this would damage major trade exposed, emissions-intensive industries like minerals and energy that account for the great bulk of Australia’s total exports, and would have negative implications for the wider economy as well as for government revenue.

The MCA argues that Australia’s 2030 emissions reduction target must informed by comprehensive analysis (including economic modelling) that measures the economic impact on all major national industry sectors and states and territories.  To adopt an emissions reduction target without such analysis would be reckless and a grave oversight.

Also released today is a report from Trading Nations, a consultancy of experienced foreign affairs and trade experts, which confirms that Australia’s 2020 targets are comparable to the United States and European Union on economic grounds.

The report warns that Australia economic success has been built on its commitment to trade and economic reform and climate policy must align with these priorities.

Download complete article