For whom the bell repeals
- Did we lose our head over axing the tax?
- Dodgy economic modelling in NSW – an endangered species?
- Warkworth rerun
- ANZ hoaxer Jono Moylan awaits his sentence
- TAI out and about
Did we lose our head over axing the tax?
The carbon price has been repealed. After two years, the government’s own figures estimate it reduced emissions by 39 million tonnes, more than any other state or federal government scheme. And it did so at a very low economic cost.
When it was introduced in July 2012, were it not for the huge amount of publicity on increases in electricity and gas prices, most people would not have noticed any change in prices. Now that it has been repealed, we are unlikely to see any real fall in prices.
The repeal of the carbon price will have an effect. Along with the rising gas price, it is likely to cause previously mothballed coal-fired power stations to re-open. The electricity sector is likely to reverse its steady move to less emissions-intensive forms of generation.
While the repeal is good news for the owners of those mothballed coal-fired power stations, it’s bad news for Australians. What the carbon price did, was gently guide the Australian economy towards a low carbon future. Without it the economy is going to have to face far faster and more economically painful adjustments.
The carbon price was not a perfect piece of policy, but it was the best policy Australia had for reducing our emissions and transforming our economy. Its repeal would not be so problematic if it were being replaced by something better.
The only positive on climate change policy has been the encouraging signs that the Renewable Energy Target (RET), Clean Energy Finance Company (CEFC), the Australian Renewable Energy Agency (ARENA) and the Climate Change Authority look to have escaped being scrapped. But these policies are not enough by themselves to get us to the inadequate 5 per cent target, let alone a more meaningful target of 25 or 40 per cent.
Most economists and climate change policy experts think it is unlikely that the government’s direct action plan will get us to the 5 per cent reduction target. The direct action plan also has no ability to be scaled up to a more relevant target of 25 per cent to 40 per cent.
The repeal of the carbon price is a win for big business lobbying and short-term politicking, and a loss for anyone concerned about our future. It is going to take a significant change of attitude in parliament if we are going to see meaningful climate change policy in Australia again.
Dodgy economic modelling in NSW – an endangered species?
TAI has been campaigning against the misleading use of economic modelling in the NSW planning process for years. For too long decision makers have accepted inflated claims of economic impacts, like the Warkworth mine claim that it “creates” 45,000 jobs despite employing only 1,000.
Following a “scathing” review of the Wallarah 2 coal project by the NSW Planning and Assessment Commission (PAC), we’re pleased to hear that NSW Planning Minister, Pru Goward, intends to start a new process for economic assessment of mining projects in the state.
The Minister’s move to tackle this problem follow the Planning Department’s “staggering” failure to notice a $1 billion gap in the mine’s numbers, and the PAC finding that the economics assessment was “not credible”.
The Commission was helped to these findings by TAI’s submission and presentation on the Wallarah project in April, which was quoted extensively in the review.
The question of “where to now?” for economic assessment in NSW remains. TAI’s Rod Campbell will be attending the Economics Society of NSW forum today to take part in this debate.
In 2012-13, TAI assisted in a case to stop the expansion of the Warkworth coal mine, brought by the residents of the village of Bulga and run by the Environmental Defenders Office NSW (EDO NSW).
The case was successful. Rio Tinto appealed to the Supreme Court, and again the Bulga community won.
Now we've got to do it all over again.
Rio Tinto has lodged another application for almost exactly the same project, but this time it is under legislation which was created especially following their loss in court. In late 2013, the NSW government passed the State Environmental Planning Policy Mining Amendment (Mining SEPP) to change the way decision makers had to balance economic, social, and environmental issues, placing greater emphasis on any economic benefits.
Just like last time, this project will have huge impacts on the irrepressible community of Bulga.
The proposal still aims to mine through the ridge that Rio promised would never be mined.
It will still wipe out the unique Warkworth Sands Woodland ecosystem.
The project will be in the spotlight over the coming months as Rio rushes for approval despite the legal and political pressure the Bulga community has placed on the expansion proposal.
TAI will once again be working with Bulga and EDO NSW to review the economic assessment of the mine. The new modelling has been completely re-done but, in a sign that dodgy modelling may not be gone just yet, still includes many flaws.
ANZ hoaxer Jono Moylan awaits his sentence
The campaign to stop Whitehaven Coal’s Maules Creek mine has been going for years. If it goes ahead, Maules Creek will become one of Australia’s biggest coal mines. The location of the mine, smack bang in the middle of Leard State Forest, contains numerous endangered ecosystems. Groups like Greenpeace and 350.org are now supporting the campaign and encouraging people to join. But two years ago, few had even heard about it.
That changed in January 2013. From his laptop at the Leard blockade, activist Jonathan Moylan sent out an ANZ branded press release, from what looked like ANZ’s PR people. It declared that ANZ had pulled financing for the project, citing the impact Maules Creek coal would have on the climate. Given the crucial role Australia’s Big 4 banks play in arranging and supplying credit to large fossil fuel projects, this was big news indeed.
Financial journalists reported the hoax as news and speculators responded, failing to check with the ASX or ANZ. $314 million was wiped off Whitehaven’s value on the share market. Trading was paused, and when it resumed after the hoax was unveiled, the share price quickly returned to what it had been. It was then that the hoax itself became news.
The Australian Securities and Investment Commission (ASIC) is prosecuting Moylan for fraud in the hope of preventing future hoaxes. Although Moylan claims he did not intend to profit from the hoax, Section 1041E of the Corporations Act says that making false or misleading statements to influence the stock market constitutes fraud.
Much of the coverage and comment that followed Moylan’s hoax focused on losses to “mum and dad investors”. However, few ordinary Australians would be trading in that way. In fact, those who sold at that point and never re-bought would now be well ahead: Whitehaven’s price is far below where it was in January 2013.
Moylan faces 10 years in jail and up to $765,000 in fines. At this point mid-way through sentencing, a form of "intensive correction" through home detention seems more likely. Critics of ASIC say the whole case shows double standards, with white-collar criminals getting far more lightly than Moylan can expect to. Former Chairman of Gunns, John Gay, was found guilty of insider trading worth $800,000, but was fined only $50,000 and escaped jail. Moylan’s sentencing continues.
TAI out and about
Narrabri coal seam gas hearing
TAI’s community engagement officer, Mark Ogge, travelled to Narrabri in northwest NSW to present our submission on coal seam gas (CSG) projects to the NSW Planning and Assessment Commission.
Mark was once again fighting the myth that CSG can bring down gas prices:
“TAI’s work on the economics of CSG clearly shows that gas exports will link Australia to world prices and push prices up. Once we’re linked to the world market, no amount of CSG production in NSW will bring them back down.”
Since our last update, Mark has also held four public forums in Victoria, been to Queensland to talk about coal in the Galilee Basin and been to some of Australia’s best farming land on the Liverpool Plains, NSW. There he presented TAI’s extensive submission on the Watermark coal project in conjunction with community groups and groundwater experts. The project threatens groundwater systems which the region’s agricultural economy depends on.