A global agreement at the Paris climate change negotiations at the end of 2015 will cut the value of Australian coal exports by 8 per cent over the next 15 years and contract the economy by 1.6 per cent if governments around the world implement the policies they have proposed.
A study by economist and former Reserve Bank of Australia board member Warwick McKibbin shows that the coal industry, one of Australia’s biggest exporters, is shaping up as one of the big losers from pledges by China, Japan, the United States and Europe to curb carbon emissions.
Without any change there will be a 13 per cent increase in global coal production, Professor McKibbin estimates.
The value of Australia’s coal exports will be 8 per cent lower and global coal production will be 5 per cent lower by 2030 as a result of climate change policies to be proposed at Paris, the forecast shows.
While debate in Australia has focused on how ambitious to make this country’s emission reduction targets after 2020, the modelling underlines how choices by the rest of the world will be almost as important for the Australian economy.
The forecast raises doubts about the need for new coal mines, as the federal government mounts an attack on “green treason” by environmental groups that have opposed the Carmichael coal mine in central Queensland.
“The government needs to take a risk-management approach. It cannot bet that other countries will keep relying on coal because they won’t,” Climate Institute deputy chief executive Erwin Jackson said.
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