Monday 6 March 2017

Myanmar bans new coal mines; Australia backs bigger subsidies

The following information comes from The Australia Institute.


Here is an update on the latest events in the push for a coal mine moratorium.
First, some good news: Myanmar is the latest to announce it will approve no new coal mines.

This is a big turnaround from previous government plans to expand coal production. The government is citing negative impacts on health as the reason for the ban. Existing mines will be allowed to operate only if they pass reviews into their health impacts.

Myanmar joins Indonesia and China in adopting a moratorium. Importantly, China’s coal use has now fallen for three years in a row, due to restrictions on burning coal, and even stronger restrictions on supply. This has both reduced emissions and pushed prices higher.
Commenting on the price spikes, Ivan Glasenberg, Chief Executive of Glencore -- a major coal mining company -- said:
I don't think any of us in this room saw it coming… Suddenly the Chinese decided they didn't like these low coal prices … we saw the effect that supply cutbacks can have on coal prices and what that did to the coal prices in China. 
While benefiting from China's supply restrictions, Glasenberg complained:
They're not like us with antitrust, we can't agree with other producers. But they can.
But that's wrong: ‘we’ could agree to stop building new coal mines: a global moratorium would mean higher prices, benefiting both existing mines and the climate.

The bad news: some wealthy countries are now going into reverse. The Trump administration pledges to repeal the US coal mine moratorium, among other environmental policies, and Australia’s government is proposing to spend new public money on new coal mines and new coal power plants, on top of existing subsidies:
While Prime Minister Turnbull cites Australia’s “vested interest” as the world’s biggest coal exporter, the Treasurer displayed government support by taking a lump of coal into Parliament to wave it around while laughingThe political signal is clear: Australia is contemptuous of world efforts to reduce emissions.

Understandably, Australia’s pacific neighbours are concerned. They are especially vulnerable to climate impacts and they have been the strongest advocates of a coal mine moratorium. The PM of Fiji has strongly criticised Australia’s “selfish” attitude over its coal mines.

With Fiji acting as President of the next UN climate talks, Australia and other coal-supporters may find their subsidies under international pressure. 

Dr Richard Denniss, Chief Economist
The Australia Institute



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