Australia's Carbon Cap System Will Cost Coal Companies $3.5 Billion
Photo via abc
It's bad news for Australia's coal industry, and good news for all those concerned about climate change: the country's proposed cap and trade system will hit big coal the hardest. The carbon cap will cost the coal industry a hefty 5 billion Australian dollars ($3.5 USD), since permits to emit a ton of carbon will cost A$25 each. Predictably, the coal industry is in a frenzy. They say if the cap goes into effect—as it's slated to do July 1st, 2010—over 3,000 jobs will be lost and 10 coal mines will be closed down. Furthermore, the Australian cap system was specifically designed to hit coal the hardest—whereas it gives a large percentage of permits away for free to other industries, coal will receive a meager ten percent gratis. From Bloomberg:
The trading plan specifically excludes coal mining from the lists of emissions-intensive industries that compete with rivals overseas that will receive at least 60 percent free permits, Hillman said. Coal mining companies will get less than 10 percent of their permit costs for free, while liquefied natural gas producers will get 60 percent free and aluminum producers 90 percent, he said.
Ouch. Poor ol' Big Coal—it's just, you're so damn dirty. One of the companies most vocal in its complaints, and set to take the biggest hit, is Xstrata, the world's biggest exporter of power station-coal. And nobody likes to see thousands of jobs lost—hopefully Australia's parliament will take these projections into account to provide something like a transitory green jobs program to ease the blow to the coal workers.
Hopefully, Obama's team is keeping an eye on this program as the debate over his carbon cap and trade rages on stateside.