Australia carbon tax to cost 14,000 jobs: study

SYDNEY, June 14, 2011 (AFP) - Australia's proposed carbon tax would cost more than 14,000 jobs, a study commissioned by the coal industry said Tuesday, warning that billions of dollars in exports would be lost.

Economic consultancy firm ACIL Tasman said Canberra's pollution tax would result in more than Aus$22 billion (US$23 billion) in lost coal exports over its first decade of operation, costing the Australian economy 14,100 jobs.

Some 4,700 of these would be at existing coal mines, 4,000 of which were at risk within the first three years, ACIL said, adding that future jobs could be reduced by as much at 37 percent.

Commissioned by the powerful Australian Coal Association (ACA), the report assumed the trade-exposed coal sector would get no concessions and that the levy would target a five percent reduction in Australia's 2000-level emissions by 2020.

AFP - Australia Prime Minister Julia Gillard (L) presents the government's carbon emissions fact sheets as Greg Combet (R), the Minister for Climate Change, looks on at Parliament House in Canberra on June 14, 2011.

"The carbon tax will put thousands of jobs at risk and push billions of investment dollars in new mining developments offshore to our competitors,' said ACA chief Ralph Hillman, launching the report.

"The most frustrating part is despite losing coal mining jobs and investment, global greenhouse gas emissions could actually rise as coal is mined from countries with more emissions-intensive and less energy-efficient coal."

Prime Minister Julia Gillard dismissed the study as scaremongering, saying Australia's mining industry had a "very bright future".

"There is a huge pipeline of investment into our resources sector, this is a very special time in the Australian economy," Gillard told parliament.

"For communities that directly rely on mining what they should be reassured about for the future is there will be more jobs and more investment in resources."

Canberra plans to tax the nation's 1,000 biggest polluters for carbon emissions linked to global warming from mid-2012, with a fixed price giving way to a cap-and-trade scheme within five years.

Though the final dollar amount is yet to determined, the centre-left Labor party plans to charge polluters a fixed price for every tonne of carbon emitted, returning most of the revenue to householders and businesses through tax cuts.

Once a cap-and-trade system is phased in, under which emissions will be limited, firms will receive permits to pollute which they can trade on international carbon markets, with the price to fluctuate in line with global demand.

Australia is among the world's worst per capita emitters due to its heavy reliance on coal-fired power. It also exports millions of tonnes of the fuel every year to Asian electricity companies and steelmakers.

The Labor party's carbon tax has met fierce resistance from conservative opposition parties and big business, particularly the heavyweight coal industry, who argue it will damage Australia's mining-driven economy.

Hillman said the government needed to cushion the coal industry by phasing in the auction of emissions permits "at a sufficiently low level".

Any carbon scheme should give "full recognition to preserving the competitiveness of trade exposed industries", he added, warning that extreme action would simply boost emissions elsewhere and cost Australian jobs.

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