PRESSURE is mounting on the Federal Government to recast its emissions trading blueprint after an analysis found it could give the aluminium and black coal mining industries more than $1 billion compensation each in the first year alone.
Resources giants Rio Tinto, BHP Billiton and Xstrata would each qualify for hundreds of millions of dollars in free emissions permits, according to an analysis commissioned by the Australian Conservation Foundation.
The Greens yesterday said the level of compensation suggested emissions trading in Australia would mimic a failed first attempt in Europe, where polluters were given free permits but household electricity bills rose substantially anyway.
"Why should ordinary Australians bear the burden of increased costs when those who caused this problem are getting windfall gains?" Greens climate change spokeswoman Christine Milne said.
The analysis, by financial advisers Innovest, found Rio Tinto would top the compensation list with $489 million worth of free permits in 2010, when emissions trading is due to start.
It would be followed by BHP Billiton ($340 million), Xstrata ($234 million) and Mitsubishi ($200 million), Anglo American Plc ($185 million) and Alcoa ($151 million).
The 10 companies qualifying for the most compensation reap a combined $115 billion in operating profits a year.
The analysis assumes the price of black coal — which has soared in recent years — returns to a level that allows coalmining to qualify as an emissions-intensive industry that competes offshore.
If it does, the compensation for trade-exposed industries would be the equivalent of $2.8 billion. Without coalmining, it falls to $1.3 billion.
Industry groups have lobbied aggressively for the Government to increase compensation on the grounds that big polluters would be forced to establish operations offshore, costing jobs without reducing global emissions.
Climate Change Minister Penny Wong is preparing the Government's final plan for release before the end of the year. The analysis also includes modelling of a separate packaged proposed to help Australia's worst emitters — coal-fired power stations — adjust. It found more than half of the assistance package for coal plants would go to state governments in NSW, Queensland and WA, where baseload power generation remained in public hands.
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