Follow the money!

Two of the most stupid arguments against action on climate change can be summarised as:

  1. Merchant bankers (like Malcolm Turnbull) are for an ETS because they will make a lot of money from the trading system.
  2. Climate Scientists only believe in climate change because they only get funding from government and the UN for pro climate change research.

So you want to play follow the money?

Let’s look at the price of coal which has risen over the last 2 years from $65 per tonne to $125 per tonne, for the more than 480 million tonnes mined. So that is $28 BILLION dollars per year increase in the price of coal!! And with Australia’s silly minerals royalty system, all of that money is profit for the mining companies. Perhaps if we are playing follow the money, it is this huge sum that is swaying the opinions of the coal industry?

A tonne of coal produces 3 tonnes of CO2 and about 220 Million tonnes of coal is used locally, so a $23 carbon price represents $15 Billion of the $28 Billion windfall the mining companies are making each year. So of course they are crying because they can see half of “their” candy being taken from them.

Of course it is not actually their coal and most users of coal domestically will initially receive 95% free permits, so the carbon price is likely to reduce the windfall only $3 Billion and the mining companies will get to keep the $25 Billion. That’s right… of the $60 Billion worth of coal currently being dug up each year, the carbon price will only be $3 Billion (5%).

This is an industry that is basking in the super profits of a 120% price rise over the last 2 years and they are seriously trying to say that an additional 5% carbon price will wipe them off the face of the map?

I’m afraid that a carbon price alone will not be able to do that. However, a carbon price re-invested into commercialising renewable energy sources may eventually provide the affordable alternatives that will mean the end of the coal industry (at least for power… it will still be needed for steel).

The money trail from the carbon price does not lead to investment bankers or to colluding scientists. Follow the money and you see that big coal opposes the carbon price because it will reduce their profit margins a little bit and open the door for competitors.

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