Australian Mining Industry’s Environmental Strategies Report (Assessment)

Background

Environmentalists have often accused the Australian mining industry of contributing to environmental degradation through pollution (Abbott 2013). The government has responded to these concerns by introducing punitive taxes to discourage local companies from emitting greenhouse gases (Manufacturing Australia 2014). This strategy has revolved around the carbon tax proposal. However, it has created a new debate about its viability to introduce sustainable change and the potential for adopting alternative strategies of environmental protection, such as the direct action strategy and the emissions trading scheme, in its place. The Mineral Council of Australia is an instrumental stakeholder in the mining sector. It has encouraged the government to adopt these alternative strategies.

Whom Does your Stakeholder Represent?

The Mineral Council of Australia represents the interests of mining companies in the Australian mining industry. Its operations are both domestic and international because it is the top industry body in the mining industry that promotes the ideals of sustainable development in the sector (Manufacturing Australia 2014).

What is their Perspective on the Carbon Debate?

The Australian government introduced the carbon tax, in 2012, after proposing a set of taxes for companies and institutions that emit greenhouse gases. It said the carbon emission tax should be $23 for every tonne emitted (Lubcke 2013). The revenue generated from the taxes would serve several purposes, including compensating affected industries, income tax reduction, and welfare payments (among other factors). The Mineral Council of Australia did not support imposing a carbon tax because it believed the measure could not meet its environmental goal – carbon reduction. Instead, the body perceived the carbon tax as an unnecessary tax burned on Australian mineral-producing companies. In its view, paying such taxes would simply increase the cost of doing business for their members, thereby making it difficult for new and existing companies to profit from their activities (Lubcke 2013).

What are the Implications for Your Stakeholders if Australia adopts ‘Direct Action’?

The direct action plan strives to cut carbon emissions through a quasi-voluntary method, which encourages companies and institutions to adopt sustainable operational processes (Roosa & Jhaveri 2009). This approach differs from the carbon tax strategy, which penalizes companies for emitting carbon gases. The direct action plan has many implications for the Australian economy and the business community alike. For example, it has a huge financial cost, of $2.9 billion annually (Miller 2014). If implemented, the Mineral Council of Australia will have to make sure that its members adopt an additional reporting procedure for documenting their carbon emissions. This process will be a requirement for mineral companies to receive the incentives associated with the direct action method. Overall, this strategy means that all members of the Mineral Council of Australia will have to contend with additional compliance standards (Miller 2014).

What are the Implications for Australia, as a Nation, in adopting ‘Direct Action’ as opposed to an Emissions Trading Scheme?

The direct action plan mainly hinges on a carbon sequestration strategy, which uses proactive measures, such as funding industrial improvements, to promote sustainable development (Miller 2014). This strategy hinges on the successful establishment of an emission reduction fund, which should finance proactive measures for reducing carbon emissions. The projected cap for this fund is $750 million (Lubcke 2013). Experts expect this figure to rise to $1 billion in 2015 (Lubcke 2013). The main implication of this plan, to Australian citizens, is the reduction of cost of living because companies will not impose an extra charge for their services (to finance carbon taxes).

An emission-trading scheme would not yield much productivity for Australians because the process of reducing the country’s greenhouse gas emissions depends on the nation’s willingness to adopt a radical shift of social structures. This change would make sure that fossil fuel use declines significantly (to negligible levels). However, carbon emissions trading schemes negate this goal because they reward heavy polluters with carbon credits if they emit greenhouse gases, below their historic levels (Lohmann 2006). Therefore, the emissions trading scheme easily gives heavy polluters an avenue for continuing to pollute the environment through the purchase of carbon credits from other companies. There is little opportunity for undertaking long-term structural changes for reducing carbon credits this way because companies can get cheaper sources of carbon credits. For example, it is easy for multinational companies to get cheap carbon credits from companies that operate in less developed countries. Lohmann (2006) has affirmed this view in his popular magazine titled, New Scientist. Leonard (2010) also affirms the same view through a 2009 documentary titled, The Story of Cap and Trade. He said giant multinational companies could easily benefit from free permits if companies adopt the emissions trading scheme (Leonard 2010). Similarly, he highlighted the possible opportunities for companies to “cheat” using this model. Therefore, the direct action method is a more viable option of promoting sustainable development in Australia. It is less prone to manipulation and bias, unlike the emissions trading scheme. Furthermore, it provides a standard approach to emissions reduction by funding environmentally sustainable projects throughout the country. Therefore, instead of relying on companies to reduce their emissions, through tax incentives and such like approaches, it directly funds productive environmental programs throughout the country.

Will Repealing The Carbon Tax Legislation Lead To Sustainable Carbon Emissions Mitigation?

Repealing the carbon tax legislation will contribute to sustainable carbon emissions mitigation. One way of doing so is by sourcing low-cost emission reductions. Dennis et al. (2013) say this strategy would work by adopting carbon-farming initiatives through a direct action plan. An Emission Reduction Fund (ERF) would finance this strategy. It would make sure that Australia reduces its greenhouse gases, thereby making the mining sector more environmentally sustainable. According to Abbott (2013), repealing the tax legislation would lead to reduced carbon emissions, through targeted funding for urban trees planting and supported installations of more than a million solar roofs. Nonetheless, repealing the carbon tax legislation is a dicey issue if a direct action plan should replace it. This is because the latter has many intrinsic market motivators that may prevent it from attaining its goals. In other words, adopting the direct action plan could easily decouple carbon emissions from economic growth.

Conclusion

Promoting sustainable development is an important concept for the Australian mining industry. The government proposed imposing carbon taxes as the main strategy for reducing the industry’s carbon footprint. However, this strategy could easily increase the cost of doing business in Australia and similarly increase the cost of living for the citizens. These reasons prompt this brief to support direct action, as an alternative strategy for reducing the country’s carbon emissions. Unlike the carbon tax, it is a more practical approach for promoting environmental awareness in Australia.

References

Abbott, T 2013, Our Plan: Real Solutions for all Australians, Liberal Party of Australia, Sydney.

Dennis, G, Bateman, B, Thomas, N, Farmer, R and Cashmere, T 2013, Simplicity and incentive? What the Direct Action plan means for business. Web.

Leonard, A 2010, The Story of Stuff: How Our Obsession with Stuff Is Trashing the Planet, Our Communities, and Our Health-and a Vision for Change, Simon and Schuster, New York.

Lohmann, L 2006, Carry on Polluting. Web.

Lubcke, T 2013, Will the Opposition’s Direct Action Plan work. Web.

Manufacturing Australia 2014, Policy Agenda. Web.

Miller, D 2014, What is the Coalition’s direct action climate change policy. Web.

Roosa, S & Jhaveri, A 2009, Carbon Reduction: Policies, Strategies, and Technologies, The Fairmont Press, Inc., London.