CLIMATE CHANGE: by Joseph PoprzecznyNews Weekly
Rudd's ETS will hit country towns hardest
, November 14, 2009
The Rudd Government's proposed carbon tax, which is being deceptively marketed as an emissions trading scheme, will impose upon Australian industry an added $87 billion burden, says Western Australian Senator Dr Alan Eggleston.
This new levy will inevitably disadvantage Australia because its major Asian trading partners - China, South Korea and Japan - are unlikely to impose a similar impost upon their own business sectors.
"I recently attended a two-day forum on renewable energy in Beijing at the invitation of the Chinese government," Eggleston said.
"China had a strong commitment to renewable energy and was working hard to reduce pollution which besets its cities. In fact, there were clear blue skies in Beijing, which was a great contrast to the blanket of smog which covered the city when I was last there in April 2008 with a trade mission."
He said that the Beijing forum, a precursor to the coming Copenhagen conference on climate change, hosted delegates from Japan, South Korea and China and several European nations, including Italy, Germany, Denmark and the United Kingdom.
"I managed to have the final statement altered to include recognition that developing nations also had a responsibility to reduce atmospheric pollution and that the whole burden should not fall on the developed nations," Eggleston said.
"I asked the Japanese, South Korean and Chinese delegates to outline their governments' views about ETS, and all said that they would be unlikely
to introduce an ETS.
"This is really important for Australia, as China, Japan, South Korea and India - India was not represented at the forum - are our major trading partners.
"If Australia introduces an ETS and we are unable to trade carbon credits with our four major trading partners, the burden of the $87 billion in additional taxes that the ETS will bring will fall solely upon the people of Australia."
But the Rudd Government's unilateralism is an even greater threat to Australian mining, mineral-exporting and power-generating industries - all of which are crucial to maintaining Australia's standard of living.
It means that the population centres set to be hardest hit are those scores of medium-sized and large Australian inland towns that rely on a single mining operation.
Strangely, this has not been highlighted by federal or state politicians, even though it threatens further settlement of inland Australia over the next decade.
According to the Minerals Council of Australia (MCA)'s submission to the Senate economics committee examining the impact of the Rudd ETS plan, the impact upon mining - coal, gold, nickel, copper and lead - would be such that production would be cut by nearly a third between 2010 and 2020.
That decade is the life of only three federal parliaments.
The submission said that independent modelling commissioned by the MCA showed projected thermal coal output would drop by 27 per cent by 2020.
On top of that, production of coking coal was set to fall by 12 per cent, and the output of what are called non-ferrous metals - gold, copper, lead and nickel - would also fall by 27 per cent.
Brown coal production, the centrepiece of Victoria's Latrobe Valley, could expect a fall of 41 per cent by 2020.
The MCA submission added that the ETS would cost Australia's mining industry an estimated $9 billion in the first five years of the ETS's operation (2010-15), and $25 billion over the first 10 years (2010-20).
Such huge drops in production are reminiscent of the 1930s Great Depression.
But that's only half the picture.
What has also not yet been fully calibrated by Rudd Government ministers - nor, strangely, even by Labor backbenchers - is that Australia has an inland network of what are best described as "mono-towns" - centres relying on the production of a single product.
This term was coined by Russian affairs expert, Leon Aron of the American Enterprise Institute, who says Russia has 460 such company towns that invariably feel the impact of economic downturns first and hardest in any recession because of their reliance on the output of a single product.
These towns were established in the Stalinist period to specialise in producing a single product, be it automobiles (as at Togliatti-on-the-Volga with its 700,000 population), coal or oil.
Says Aron: "Russian company mon0-towns were built around a single plant or factory, often by prison labour in the middle of nowhere and with complete disregard for long-term urban viability and economic geography, not to mention the needs and conveniences of workers and their families. ...
"Although not all Russian towns are mono-towns, mono-towns are hardly insignificant: a quarter of Russia's urban population, 25 million people, live in them, producing up to 40 per cent of the country's gross domestic product."Australia's mono-towns are in Victoria's Latrobe Valley, Queensland's and NSW's coal-mining regions, Western Australia's goldfields where nickel is also mined, and the Pilbara.
Both Senator Eggleston's highlighting of the biased nature of the ETS tax impost and the MCA's prediction of huge production cuts throughout many regional centres suggest that Australian mono-towns face a fate similar to those confronting Russian mono-towns, even if their depressed future prospects arise from different causes.Joseph Poprzeczny is a Perth-based historian and writer.