Australia’s 10 biggest climate polluters 2016

Australia’s 10 biggest polluters – all energy and mining companies – continue to rely on last century’s fuels to generate energy and conduct their businesses. Foreword In the 12 months since the Australian Conservation Foundation’s first report on Australia’s 10 biggest climate polluting companies, energy giant AGL has gone from #3 to #1 and miner Glencore has entered the list for the first time. Despite what the federal government tells Australians, the amount of climate pollution Australia pumps into the sky is rising. And Australia’s 10 biggest polluters – all energy and mining companies – continue to rely on last century’s fuels to generate energy and conduct their businesses. This report, based on the very latest available data, describes each company, explains how the company creates climate pollution and summarises what each says on the public record about climate change. These 10 companies are responsible for the equivalent of nearly a third of Australia’s climate pollution. Together, they are responsible for pouring more climate pollution into the atmosphere than Switzerland, Ireland, and Denmark combined. And government policies encourage them to keep doing what they’ve been doing for decades. Meanwhile, the world is changing. In Paris in December last year, 195 countries agreed to keep “the increase in the global average temperature to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels.” To achieve this goal all countries have to work hard to cut climate pollution. But in 2014-15 Australia’s climate pollution increased by 1.3 per cent.  That’s more than seven million additional tonnes of planet-warming pollution pumped into our skies in just one year. Why? In axing the carbon price, the government removed the one policy Australia had to reduce climate pollution from the energy sector, leaving electricity generators – and the rest of us – largely reliant on coal for our power. The truth is the energy sector is crying out for government leadership to help the industry make the transition to a zero-pollution future. At an energy forum hosted by ACF last year representatives of energy companies, superannuation funds, financial services companies and investors agreed the early closure of coal-fired power stations was inevitable and the federal government needed to manage this transition. AGL’s chief executive Andrew Vesey has called on the federal government to develop a “clear and equitable policy” to close the least efficient power stations. “It is important that older, less efficient and reliable power stations are removed from Australia’s energy mix,” Mr Vesey said. “Decarbonisation and modernisation of Australia’s electricity system are important goals requiring effective policy.”  The calls are there – from the energy companies, investors, environmentalists and infrastructure experts. Now, the government must take the lead. ACF urges the federal government to commit to a phased closure of Australia’s coal-fired power stations. This means starting with the dirtiest and least efficient stations, helping affected workers and communities with the transition and drawing up comprehensive plans to clean up and rehabilitate old mine sites and power stations. The big polluters identified in this report own some of the world’s dirtiest coal-fired power stations. Every day these dirty power stations are spewing out pollution. Every day they are making climate change worse. Australians already live with the impacts of climate change. Last year was the world’s hottest recorded year, the 39th consecutive year of above average temperatures. This has fuelled droughts, bushfires, heatwaves and other extreme weather events across the country. This summer ancient parts of Tasmania’s alpine World Heritage wilderness were burnt by bushfires for the first time in a thousand years. These big polluting companies are making this situation worse every day. It’s time for Australia to get out of last century’s energy sources and leap into a brighter future powered by clean energy

Some economics of mining taxation

We argue five main propositions. First, the choice between royalties and profit-based taxation involves an efficiency tradeoff, between diminished incentives to produce output on one hand, and diminished incentives to minimise costs on the other (as in Laffont and Tirole, 1993). So the Brown tax is indeed a tax, and one that reduces the incentive to mine. Next, the ex post Resource Super Profits Tax (RSPT) falls on quasi-rents as well as on rents, and therefore involves some expropriation. Third, there may be a case in favour of a retrospective RSPT or the like, but it has yet to be made persuasively. Fourth, the successor to the RSPT – the Minerals Resource Rent Tax (MRRT) – has many of the inefficiencies of the RSPT but adds some further serious inefficiencies of its own. Last, the value of revenues from taxes such as the RSPT and the MRRT is usually over-stated, as those revenues are highly risky. The failure to take account of the risky character of those income streams amounts to fiscal illusion and makes it more likely that unwise spending commitments will be made.Henry Ergas, Mark Harrison and Jonathan Pincu