The Minister for Climate Change and Energy Efficiency, Greg Combet, has criticised the Australian Coal Association (ACA) for trying to frighten workers and regional communities over the impact of a carbon price.

Mr Combet said the ACA’s plans to run regional television advertisements exaggerating the impact of a carbon price showed the lobby group was more interested in a scare campaign rather than the facts.

“The simple fact is that the coal industry has a very bright future in Australia and will be supported as we introduce a carbon price by the Government’s $1.3 billion Coals Sector Jobs Package,” said Mr Combet.
 
Announcing the advertising campaign today, the ACA’s executive director Ralph Hillman has drawn on a discredited survey carried out by ACIL Tasman which predicted that 4,700 coal mining jobs were at risk from a carbon price.

This ACIL Tasman work was based on such obviously incorrect assumptions that it must have been deliberately designed to produce alarmist results.

Firstly, it assumed a carbon price of $55 a tonne in 2020 – by contrast modelling by Treasury estimated the carbon price would be $29 a tonne in 2020 in real terms.

Secondly, the ACIL Tasman survey assumed away all of the $1.3 billion in assistance which the Gillard Government is providing to support jobs under its Coal Sector Jobs Package.

“The ACA’s insistence on using dodgy assumptions to predict doom and gloom under a carbon price does the coal industry’s reputation no good,” Mr Combet said.

“I can assure coal miners that their industry has a bright future under a carbon price.”

“Treasury modelling shows the Australian coal sector more than doubling its output by 2050 with a carbon price in place.

“The coal industry made almost $15 billion in profits in 2009-10 and has $70 billion of new investment in the pipeline, with 105 new mines under construction or awaiting approval.

“Only last week, Peabody Energy announced a $4.7 billion takeover bid for Macarthur Coal –a clear vote of confidence in the future of the industry with a carbon price.”

The majority of Australian coal mines do not release significant amounts of greenhouse gases and will have only small liabilities under a carbon price.
A number of mines, however, do release significant amounts of fugitive emissions of greenhouse gases, mainly methane.

The Government’s Coal Sector Jobs Package provides $1.3 billion in assistance to support jobs in these “gassy” mines.

“With a $23 a tonne carbon price, once the Government’s assistance is taken into account, the impact on costs for the coal mining industry will be less than $2 for every tonne of coal produced, on average across the industry,” Mr Combet said.

“This cost impact of less than $2 a tonne of coal should be compared to selling prices of more than $300 a tonne for metallurgical coal and around $120 a tonne for thermal coal.”

Fugitive emissions from coal mines and gas projects, combined with fuel combustion in LNG projects, account for almost half of Australia’s projected growth in carbon pollution to 2020 in the absence of action to reduce pollution.

That means doing nothing to reduce fugitive emissions, as the ACA advocates, is not a responsible option.

“The ACA would better serve the interests of both its own industry and the nation by embracing the opportunity to be part of the solution rather than mounting scare campaigns designed to block responsible action to lower carbon pollution and tackle climate change,” Mr Combet said.