bhp boss calls for price on carbon

ABC Online...
International mining giant BHP Billiton has urged the Federal government to manage environmental challenges by establishing a clear price signal on carbon as it reviews its emissions trading scheme (ETS).

In a luncheon hosted by the Australian British Chamber of Commerce in Sydney today, BHP Billiton chief executive Marius Kloppers said that there was no single silver bullet to reducing emissions and the Government has to incorporate a number of variables.

"It is a long-dated problem and the nature of long-dated problems normally means that a single silver bullet does not exist to cure the ills," he told the audience.

"There are many moving parts, technology being only one of them that will change over time. Instead, governments will need to take incremental steps that build upon each other to create a mosaic of initiatives that collectively achieve the desired result," Mr Kloppers said.

Mr Kloppers is seeking a predictable and gradual transition to a carbon price, favouring a combination of carbon tax, land use actions and limited carbon trading.

He also added that large companies such as BHP Billiton want a myriad of factors to be included when creating a policy response to climate change.

Revenue neutrality, trade friendliness, broadbased applications and a predictable transition are all issues that were addressed at the business luncheon.

Mr Kloppers said that the money raised through pricing carbon must not be used for general spending or to support "winning" technologies.

"Instead of treating this income as windfall revenue, the Government must find mechanisms to return this revenue to the economy - individuals and businesses - and let the markets work," he added.

"I think that a price on carbon can only be effective if it is operated in a revenue neutral manner by a government."

Mr Kloppers went on to say that a price on carbon would essentially have to be simple and effective, encouraging the Government to avoid an economically elegant solution that might prove difficult to implement.

He cautions that Australia's energy supply is particularly carbon intensive, with about 90 per cent of carbon emissions coming from the electricity sector originating from coal-fired power stations.

"Reducing Australia's carbon emissions footprint will require substantial changes in consumer behaviour," Mr Kloppers said.

He encouraged consumers to favour low carbon alternatives and to recognise that making a difference comes at a price.

Mr Kloppers also recognised that the issue at hand was one with intense political charge and he is resigned to the fact that "there is really no easy answer".

When asked whether the mining giant planned to honour its agreement with Prime Minister Julia Gillard for a 30 per cent tax on coal and iron ore profits, Mr Kloppers said he would.

Dave R.