NSWMC supports the introduction of a long-term price on carbon as part of a comprehensive policy response to the issue of climate change.
NSWMC accepts that climate change is a key challenge facing contemporary society and that Australia has an international obligation to act. It must be understood that a global problem requires a global solution and the issue of climate change is no exception. It is essential that there is an international agreement on greenhouse gas emissions abatement that includes genuine and comparable commitments from all major emitting nations.
The introduction of a carbon pricing mechanism is the most significant structural change to the Australian economy in a generation. Its impact will be felt by all sectors of the economy and by all elements of the community. Industries like the minerals sector must have input in the emerging policy debate to ensure that a carbon pricing mechanism is well-constructed.
An emissions trading scheme has been the preferred carbon pricing policy option in recent years. However the climate change debate has shifted of late and it is now recognised that there are a range of mechanisms that need to be researched and analysed to ascertain whether they may be more suitable in the Australian environment. The options include various forms of carbon taxing, baseline and credit schemes and abatement auctions. Regardless of the approach taken, there are key policy measures that must be in alignment with the pricing mechanism to ensure a sustainable scheme that will effectively reduce Australia’s overall greenhouse gas emissions.
NSWMC advocates that a carbon pricing mechanism must promote the reduction of emissions without adversely impacting on the competitiveness of Australian industry, including the trade exposed sectors. Without appropriate protection, the competitiveness of industry in Australia will reduce and lead to a decline in investment, relocation of activity to countries that may not have the same environmental requirements as Australia and potential closure. Carbon leakage is at risk of occurring if increased costs result in certain activities moving from Australia to a country which has not implemented a similar carbon scheme thus resulting in negligible impacts on global emissions. If Australian trade is not protected, impacts will be borne not only by companies, but will be felt by employees, their families and the linked regional economies.
A market based mechanism must treat the minerals industry in a manner that is consistent with the treatment of our international trade competitors and must not create distortions in trade and investment.
A carbon pricing mechanism should promote certainty to industry and provide a clear, long-term price signal. Policy measures that provide a clear, predictable and long-term signal will facilitate the necessary investment in low emissions technologies and abatement measures.
Policy measures should provide genuine emissions reductions at least economic cost. A low emissions economy must be introduced in a measured way and in a manner that minimises compliance and administration costs.
A carbon pricing mechanism must be introduced in a measured manner with appropriate transition arrangements that contain the impact on the Australian economy, industry and community living standards.
Low emissions technologies are vital to a lower carbon economy. A carbon pricing mechanism and other policy measures must stimulate investment in a broad range of low emissions technologies and adaptation measures. Research, development and demonstration of technologies like carbon capture and storage and renewable energies must be a core component of the response to climate change.
A carbon pricing mechanism needs to protect Australian industry, jobs and the economy whilst providing tangible environmental benefits. It is therefore imperative that a carbon pricing mechanism be consistently aligned with global action on reducing greenhouse gas emissions.