Climate Change


The International Climate Change Effort

Australia has been wrongly cast, both in Australia and abroad, as a laggard in efforts to slow the growth of greenhouse gas emissions. Australia was one of the few nations that fully met (or exceeded) its obligations under the first commitment period of the Kyoto Protocol. The reality is that Australia’s economy has become substantially less emissions intensive over the last two decades. Treasury modelling demonstrates that the existing minus 5 per cent target will already impose higher economic costs on Australia than almost any other developed nation. The global nature of the climate change challenge requires an internationally aligned solution. This global response must be centred on three equal and fundamental public policy principles: environmental effectiveness, economic efficiency and social and political acceptability. Measures that are not global are unlikely to be environmentally effective. Measures that are not internationally broadly based are unlikely to be economically efficient. Failure to meet these principles undermines social and political support for action. Action by other nations has been patchy at best. A number of countries, accounting for over 80 per cent of global emissions, set emission abatement targets for 2020 under the Copenhagen Accord and were formalised as part of the Cancun Agreements. Each country chose its own target, base year and accounting methodology. The varying methodologies and bases used by each country make direct comparisons across countries difficult. This work by The Centre for International Economics compares national offers using common base years to give a closer comparison. It uses the official submissions of each country under the United Nations Framework on Climate Change Convention (UNFCCC). Ultimately, the measure of effort that a target represents is described by size of the reductions off 2020 “business as usual”. Australia’s targets are ambitious.

Senate Committee Inquiry into the adequacy of management of the Great Barrier Reef

The Minerals Council of Australia (MCA) welcomes the opportunity to provide a submission to the Senate Committee Inquiry into the adequacy of management of the Great Barrier Reef (GBR). As you are aware, the MCA represents over 85% of minerals production in Australia. The MCA’s strategic objective is to advocate public policy and operational practice for a world class industry that is safe, profitable, innovative, environmentally responsible and attuned to community needs and expectations. MCA members commit to continuous improvement in their performance, beyond regulatory requirements, as signatories to Enduring Value – The Australian Minerals Industry Framework for Sustainable Development. Key elements in this Framework are the commitments to ‘contribute to conservation of biodiversity’ and the ‘continuous improvement in their environmental performance’. The minerals industry recognises the ‘Outstanding Universal Value’ (OUV) of the GBR and is committed to the protection of those values though an appropriate risk based management regime. The industry also recognises the need to balance environmental protection, social and cultural values and responsible economic development in areas within and adjacent the GBR Marine Park area.
It has long been recognised that very large world heritage areas such as the GBR need to remain available for multiple uses, including economic development (where it is not inconsistent with the outstanding universal value of the GBR). This is a critical concept given the significant mining, petroleum, agriculture, fishing and tourism industries located adjacent to the GBR and their importance to both the Queensland and national economies.

SUBMISSION TO THE REVIEW OF THE RENEWABLE ENERGY TARGET

This submission argues that the Renewable Energy Target (RET) cannot continue in its present form for three reasons: The excessive cost burden it places on households and industry undermining national competitiveness; The distortion it causes in electricity markets that may ultimately affect the stability and reliability of energy markets and lower productivity for the economy as a whole; The costly and inefficient nature of the scheme as a climate change management measure. First, the RET scheme creates a producer subsidy paid by electricity consumers to a specific class of technology providers via a mandated quota of production. These sources of production are more expensive than other sources of energy. This means electricity costs are higher than they would otherwise be, particularly in a time of falling demand. When demand is weaker, subsidised producers can supply at below market cost. While this in theory should mean lower prices, other factors such intermittency, network stability demands and distributed network costs mean that costs to consumers far exceed the benefits.
In other words, the RET is a transfer that involves a real resource cost to the community: the cost of investing in renewables over and above what otherwise would have been the case without the mandated quota. This over allocation of resources, the opportunity cost of the scheme, is money that might otherwise be gainfully employed in alternative productive investments. As an opportunity cost to the economy, this amounts to about $36 billion by 2020.

Streamlining environmental regulation, ‘green tape’, and one stop shops

The Minerals Council of Australia (MCA) welcomes the opportunity to provide a submission to the House of Representatives Inquiry into streamlining environmental regulation. As you are aware, the MCA represents over 85 per cent of minerals production in Australia. The Council’s strategic objective is to advocate public policy and operational practice for a world class industry that is safe, profitable, innovative, environmentally responsible and attuned to community needs and expectations. The MCA provides this submission as supplementary to the joint MCA submission with the Business Council of Australia (BCA) and the Australian Petroleum Production and Exploration Association (APPEA), dated 28 April 2014. The Australian minerals industry is committed to environmental regulation which is both efficient in its operation and effective in achieving the desired outcomes. In this submission, the industry does not seek to remove or diminish environmental standards or safeguards. Rather, the minerals industry seeks only to create a more streamlined process in meeting environmental outcomes through the removal of unnecessary and costly duplication. The MCA strongly supports the Commonwealth Government’s reform agenda, including the implementation of the ‘One Stop Shop’ for environmental approvals. The MCA considers these reforms important to increasing business confidence and enhancing Australia’s reputation as an investment destination for responsible development. The MCA recognises that while reforms to Commonwealth processes are critical, regulatory delays can also be driven by State processes. Accordingly, the MCA encourages continued effort to reduce regulatory burden by all levels of Government.

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