Uranium tops stress test
■ BHP Billiton expects a global carbon price of $US24 to $US50 a tonne to be in place by 2030, as the company stress tests its portfolio in response to the growing economic threat posed by climate change.
And the company has modelled a carbon price of $US80/t as a global response to an “unlikely and extreme shock event” brought on by delays in co-ordinated climate change policy that subsequently forces stronger global action to abate carbon emissions. BHP chief commercial officer Dean Dalla Valle told investors last week BHP accepted the Intergovernmental Panel on Climate Change’s assessment of climate change science, and the company believed “that warming of the climate is unequivocal, the human influence is clear and physical impacts are unavoidable”.
“However, the world faces two critical challenges, ” he said.
“Firstly, we must provide access to affordable energy.
At the same time, we must cut greenhouse gas emissions consistent with international government ambitions to limit warming to two degrees above pre-industrial levels.”
Mr Dalla Valle said BHP’s modelling suggested demand for thermal coal would rise by 2030 even if governments moved to limit climate change to two degrees, but sharp falls could be expected if stronger action was taken.
Coal was still likely to be a significant generator of energy by 2030 even in shock scenarios, according to BHP. “Uranium is the clear winner in this because, if you look at all of the projections, more nuclear power will be required if the world is going to achieve a twodegree scenario.
“And that’s under a whole range of analysis we’ve done, ” Mr Dalla Valle said.
“And under a steady transition to a two-degree world, thermal coal demand could fall below current levels.
“And in a shock even it would drop even faster — but it would still be big.”