Prime Minister Julia Gillard said Thursday she would not rule out introducing a new tax on carbon gas emissions after the world’s biggest miner BHP Billiton urged Australia not to wait for the rest of the world to charge polluters.
The Anglo-Australian mining giant’s chief executive Marius Kloppers unexpectedly waded into a divisive political debate on Wednesday when he recommended during a speech in Sydney that Australia introduce a carbon tax for its long-term economic interests.
With a carbon tax, polluters would pay the government a set price for each ton of carbon that they emit. But under the preferred scheme of Gillard’s Labor Party, polluters would buy and sell permits to pollute, with market forces dictating the price. Many economists agree that such an emissions trading scheme is a cheaper way of reducing pollution.
While other business leaders have called for a cost to be imposed on carbon polluters in the past, the opinion of BHP Billiton carries considerable weight in Australia where minerals and energy are the biggest export earners.
Gillard welcomed Kloppers’ raising the issue.
“If we are going to reduce our carbon emissions, then we need to put a price on carbon,” she told reporters.
She said she would not rule out her government imposing such a carbon tax after a multiparty climate change committee meets next year to consider how to charge carbon polluters.
Gillard agreed to set up the committee in return for the minor Greens party’s support for her minority government after elections last month failed to deliver any major party with a majority.
The Greens, regarded by the mining industry as an enemy, support a carbon tax and want urgent action to curb Australian greenhouse gas emissions which are largely due to heavy reliance on abundant coal reserves to generate electricity.
Labor had previously shelved its plans to introduce a market for trading carbon pollution permits until 2013, when it would become clearer how the United Nations would replace its Kyoto Protocol on reducing greenhouse gases.
But Gillard has relatively weak policy control over her minority government, which relies on a disparate group of three independents and a Greens legislator to stay in power.
Kloppers, whose company is heavily involved in coal mining, said it was in Australia’s interests to reduce its emissions through a carbon tax before a new global agreement is reached.
“We do believe that such a global initiative will eventually come and we do believe that when it does come, Australia will have needed to act ahead of it coming in order to maintain its competitiveness,” Kloppers said.
Kloppers’ position undermines opposition leader Tony Abbott who said Thursday that Australian industries would lose their competitive edge if they had to pay for carbon emissions while their overseas competitors did not.
Abbott still hopes that his conservative coalition — which is a champion of the mining industry and opposes Labor plans to introduce a new tax on profits from iron ore and coal — will soon be able to form a government by convincing two independents lawmakers to defect from Gillard.