Saturday, September 18, 2010

Abbott Cops a Kloppering

Marius Kloppers has publicly stated his preference for a carbon tax. Opposition Leader, Tony Abbott, must have fainted. Kloppers was instrumental in the advertising campaign against the mining super profits tax, is head of the world's largest resources and mining company (BHP Billiton).

Kloppers is an experienced business man and engineer. He most certainly wants the realistic 'best' for his company. European countries are already moving to limit carbon emissions and have improved their energy efficiency since the 1980's, following oil crises in 1973 & 1979 which saw the supply of oil limited, and its price rise significantly. While there is plenty of coal for BHP to mine, sell, & use, Kloppers perhaps recognises moves within the world's economies to limit carbon emissions.

A carbon tax is simple, fixed and easily incorporated in business plans. An emissions trading scheme (ETS)was favoured by John Howard (who resisted actually doing anything) and the previous and current Labor Governments under Kevin Rudd and Julia Gillard. But under ETS, carbon permits would be traded, like shares, on current and 'futures' markets. Their price, like shares could fluctuate wildly, making business planning more difficult. There have also been suggestions that, with such a low level of proposed reductions, an ETS would achieve little except make 'winners' and 'losers' in business.

Kloppers might well be making a pre-emptive strike to achieve a level of certainty his business needs. Nevertheless, a carbon tax might well be a worthwhile inclusion in Australia's plan to reduce carbon emissions from its people, and its businesses.

Also, remember that some of the media, notably News Ltd publications The Australian and The Daily Telegraph will argue against carbon reduction on the basis of their support for the opposition Liberal  Party.

My view is that we should probably have a combination: the carbon tax introduces a level of certainty, and a limited ETS reduces the effect of the open-market price volatility.

The last thing Tony Abbott wanted was for a significant business leader to publicly state his preference for a carbon  reduction scheme, let alone a carbon tax! Phone calls will made, and emails sent from the Liberal Party. So too, press releases and media grabs from a congo line of Coalition members will be cheap as chips from the Opposition.

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