Mine’s benefits are short-lived
BEFORE the FNQ business community and public get too carried away about the perceived economic benefits of Adani’s Carmichael Mine (CP 7/6), it would be prudent to look more closely at some inconvenient truths behind this project.
Adani’s formal announcement in Townsville on June 6 was essentially its own green light for the mining project and nothing more. There is still no mention of Adani securing the significant finance it needs to go ahead with the $16.5 billion project.
There is still no certainty that Adani has secured the $1.1 billion loan from the Australian Government’s Northern Australia Infrastructure Facility to be used to construct a 400km railway from the Carmichael Mine to Abbot Point.
Both the Queensland and Australian governments are not availing themselves of recent changes in global energy markets.
Importantly, renewable energy is rapidly expanding as the world divests from thermal coal to more sustainable energy investments, such as solar and wind.
Many investors view thermal coal projects as having a high risk of becoming stranded assets, as a consequence of carbon-constrained economics. History has shown that the burdens of such abandoned assets, including their expensive environmental clean-up costs, are typically carried by taxpayers not the mining companies.
The Carmichael Mine poses significant climate change threats to our greatest natural asset – the Great Barrier Reef.
According to a Deloitte Access Economics study published yesterday, the GBR’s contribution to Australia’s economy has been valued at a staggering $56 billion.
Tourism is the biggest contributor to the total asset value making up $29 billion.
The GBR generates 64,000 jobs in Australia and contributes $6.4 billion to the national economy. More than 27,000 jobs are supported by the GBR in the FNQ region alone, over 90 per cent being in tourism.
It is a fact that the Carmichael Mine will contribute to atmospheric and oceanic warming, as burning the coal in India will still contribute to increases in atmospheric concentrations of carbon dioxide.
Importantly, this particular thermal coal has only medium energy content and contains 26 per cent ash so cannot be used in the new generation low emission power stations.
If the signatories to the Paris Climate Agreement, including the Australian Government, are to meet binding obligations to keep global warming well within 2C above pre-industrial levels this century, then 90 per cent of Australia’s current thermal coal reserves must remain in the ground.
We have experienced about 1C over the past 100 years, so this translates to keeping future warming within one degree, preferably 0.5 of a degree.
Our region has experienced two unprecedented back-to-back coral bleaching events in 2016 and 2017, both being driven by ‘marine heatwaves’.
The science is telling us that some reefs will recover, but if global carbon dioxide levels continue to rise at ‘business as usual’ rates, research has shown we could witness annual bleaching of corals in most tropical locations – including the GBR– by 2050.
While the coral reef science community is cautiously optimistic that we can save the GBR from climate change, they are also clear that the window of opportunity to do this is closing fast.
Essentially, the fate of our great wonder of the natural world is dependent on a rapid transition to a low carbon global economy.
The Carmichael Mine and other planned thermal coal projects in Australia are incompatible with meeting the emission targets set down in the Paris agreement.
This concern is backed up by a UNESCO experts report published last Saturday, which states that failure to achieve the Paris emission targets will mean that the GBR will suffer severe coral bleaching twice a decade by 2035 and will be completely dead by 2100.
For the FNQ region, the long-term economic and environmental costs of this mega-mine far outweigh the short-term economic benefits.