BHP Billiton has thrown a significant spanner in the works of peak mining bodies lobbying on behalf of fossil fuels to the detriment of climate change. In the 26-page report BHP Industry Association Review downloadable here the company has made three decisions:
First, BHP has reached a preliminary decision to quit the World Coal Association “in light of the identified difference and the narrower activities of benefit to BHP from membership. BHP will invite responses from the WCA before making a final determination as to future membership by 31 March 2018.”
Second, similarly it will make a final determination on membership of the United States Chamber of Commerce on or before 31 March 2018, having identified material differences.
Third, BHP will remain a member of the Minerals Council of Australia, provided that it refrains from policy activity or advocacy that BHP disagrees with within 12 months.
The World Coal Association (WCA) has expressed support for technology neutrality in climate and energy policy frameworks. However, the WCA has supported policy stances that would improve the investment climate for HELE coal generation.
BHP will not put up with this jiggery pokery.
In the AFR today the the WCA claims they have been misrepresented. They say they have always supported a balanced approach that integrates climate and energy policy, working toward a low emission future for coal. They say that on their website:
the first item listed as ‘A pathway to zero emissions from coal, supporting the deployment of all low emission technologies’.
BHP, like many others, may see this as nothing more than dreaming that masks a preference for coal.
The United States Chamber of Commerce (the Chamber) believes the 2°C Paris goal is unachievable, deplores the impact it would have on the US economy, claims that the Agreement is ineffectual as a framework for reducing remissions (because it has no mechanism to enforce emissions reduction pledges, and the burden of emissions reduction is distributed unevenly across the signatories) and opposes a price on carbon.
BHP welcomes the Paris Agreement and is willing to work towards its achievement. BHP accepts that a price on carbon may be a necessary feature.
In the AFR today The Chamber was sticking to its view that innovation was a better way to lower emissions than remissions reduction targets:
“The Chamber believes that the climate is changing, and that man is contributing to these changes. We also believe that technology and innovation, rather than unachievable federal mandates, offer the best approach for reducing greenhouse gas emissions and mitigating the impacts of climate change.”
The Minerals Council of Australia (MCA)
has at times argued that energy policy should prioritise reliability and affordability over ‘other policy goals’.
- climate policy and energy policy are inextricably linked, and that energy reliability, energy affordability and emissions reduction should be considered on an integrated basis.
BHP also disagrees with the MCA’s advocacy for High Efficiency Low Emissions (HELE) coal, for example in the La Trobe Valley. BHP does not believe that the government should intervene to favour any particular technology. They:
- believe governments should focus on setting policies to facilitate efficient markets. Government intervention in resources and energy markets should only be in response to a demonstrated market failure and informed by cost-benefit analysis.
BHP provides $1.85 million a year to the MCA, around 17% of its revenue.
Here are some links:
- ABC – BHP set to leave World Coal Association, threatens Minerals Council withdrawal
AAP at The West Australian – BHP Billiton breaks ties with World Coal Association over climate change, energy policy differences
Meanwhile National Australia Bank announced last week that it would cease all lending for new thermal coal projects. Other banks and financial institutions are also pulling back on coal.
Last month the Australian Prudential Regulation Authority warned banks of ‘regulatory action’ if they did not take action to assess to assess climate risks in their lending practices.
Alan Kohler on the TV last night said that the BHP action marked a turning point in peak body lobbying. Given the responses above it seems likely that BHP will part company with these industry associations. Change will not happen quickly and cleanly, but the stance taken by the regulator, which will be taken up by insurance companies, gives hope. The BHP statement may prove a significant milestone.
Can-do Campbell Newman called the BHP decision “contemptible and cowardly.” Chris Graham called Campbell “arguably Australia’s most tragic modern political figure.”
And so it goes.