The minerals sector is concerned at the Federal Opposition’s proposal for a 45 per cent reduction in Australia’s greenhouse gas emissions by 2030.

The target is not based on detailed economic analysis of its impact on growth, living standards and energy costs.

The proposed target has the look and feel of an ambit claim.

We welcome the Opposition’s commitment to consultation on the issue, but are surprised that it has nominated a firm target in advance of such discussions.

In our view, Australia must take a rational and informed approach to its climate policy settings, one which recognises the indispensable role that Australia plays in providing protein, fibre, resources and energy to countries with no such endowment of their own.

Australia’s economy is not like those of Europe, which has anaemic economic growth prospects and a falling and ageing population.

Instead Australia is part of the fast growing region in the world, with a strong outlook for agricultural and minerals and energy exports.  Those sectors already account for more than 70 per cent of export income and are an essential element of Australia’s national prosperity. 

The bottom line is that Australia plays a different role in the world economy to many other developed nations. It means that the current emission reduction target of 26-28 per cent is more than comparable with those of other developed nations.

In fact, the 26-28 per cent target will impose higher costs on Australia than on any other developed nation.

It is also critical to remember that a key determinant of a nation’s emissions footprint is population growth. Targets must take account of the great differences in projected population growth over the period to 2030. 

According to United Nations projections, Australia’s population will grow by 16 per cent (3.8 million people) between 2015 and 2030. Over the same period, Germany’s population will fall by 4.7 per cent (3.9 million), Japan’s by 6.7 per cent (8.4 million), Russia’s by 6.5 per cent (9.3 million) and Italy’s by 2.7 per cent (1.7 million). 

The reality is that the Australian economy in making strong progress in reducing its emissions. 

Australia’s carbon productivity (CO2 emissions per dollar of gross domestic product) has improved faster than most economies.

In particular, Australia’s emissions per $ of GDP have improved by 50 per cent since 1990.

This compares with a 40 per cent improvement in both the EU and the US.  Canada’s carbon productivity improved by 15 per cent over this period while Japan’s improved by 11 per cent.  

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