Strategies in Action
Queensland NMBI talking points
The talking points below delve into some of the implications of banning new climate-damaging projects in Queensland.
These talking points may be helpful when you are encouraging Queensland state MPs to support adoption of the No More Bad Investments (NMBI) model legislation. These talking points assume that the person you are talking with accepts that at least some action is necessary to tackle the climate emergency.
Note: This page has not been updated in a while so a few details might have changed in the last few years, but the key points remain valid.
1. The Queensland government can control the types of projects it approves within Queensland regardless of federal policies. By banning new climate-damaging projects Queensland would be demonstrating climate-related ‘duty of care’, making it easier for other states and territories to do the same.more...
Climate impacts are already killing people and destroying ecosystems, so any government that allows new projects that increase carbon emissions is failing in its duty of care to its citizens.
Federal climate-related policies are far from adequate. However, if enough states and territories enact No More Bad Investments (NMBI) legislation as a first step in taking climate emergency action it will normalise the practice of governments passing legislation based on climate ethics and restoration of a safe climate.
2. Banning NEW climate-damaging projects before they start is relatively easy compared with phasing out existing sources of carbon emissions.more...
While equally necessary, closing existing fossil fuel activity would be much harder and take longer, involving transition programs for workers and possible compensation claims from affected corporations, and requiring rapid roll-out of replacement renewable energy infrastructure.
Adopting NMBI legislation is a logical and significant first step in taking climate emergency action even though much more is required.
3. Queensland doesn’t need any new coal or gas extraction to ‘keep the lights on’. New fossil fuel projects are primarily for export.more...
From Dept of Energy, Innovation and Science (2017) (https://www.environment.gov.au/system/files/resources/f02a388d-74eb-4200-96fb-fe2a9d0caf5b/files/energy-update-report-2017.pdf):
Australia’s domestic consumption of coal and gas has risen only slightly over the last 40 years. We now extract almost three times as much ‘energy’ as we need.
80% of the coal we dig up is exported. A 27% increase in gas extraction in 2015-16 resulted mainly from new CSG wells drilled in Queensland to support the expansion of LNG exports from Gladstone. We certainly don’t need any new coal mines or gas wells to have sufficient fossil fuel supply to keep existing power generators running while we transition to renewable electricity generation.
4. It will give market certainty to assist the rapid roll-out of climate-safe alternatives if new climate-damaging projects are banned in spheres where climate-safe alternatives already exist, and timelines for future bans are set in other cases.more...
Investment in new renewable energy generation and storage will flow in if new fossil fuel projects are banned. Electric vehicles and charging stations will expand if a timeline is set for banning new fossil fuelled vehicles.
When stringent new lighting efficiency standards were adopted, in effect banning sale of incandescent lamps, they were quickly replaced by a range of compact fluorescent lamps. This soon led to the development of even more efficient LED lamps. This transition was accomplished with minimal disruption and very little opposition from the general public simply because better alternatives quickly became available as a result of the tighter efficiency standards.
5. Queensland has adopted emission reduction targets of 30% below 2005 levels by 2030 and zero net emissions by 2050 in order to do its ‘fair share in the global effort to arrest damaging climate change’. Continuing to allow NEW climate-damaging projects is a bit like frantically trying to bail water out quickly enough to stop a boat sinking without doing anything to stop a person at the other end of the boat who is merrily tipping more water in.more...
In practice, climate impacts are already threatening lives and our well-being, so a more realistic target would be to reach net zero emissions absolutely as quickly as possible and to go beyond net zero emissions by drawing down the excess carbon already in the atmosphere.
It makes no sense to continue to allow new climate-damaging projects that will make achieving climate targets harder, particularly in cases where climate-safe alternatives are already available.
The following is from 15/9/2017, https://www.qld.gov.au/environment/climate/transition
The Queensland Government has made three key climate change commitments:
1. Powering Queensland with 50% renewable energy by 2030
2. Doing our fair share in the global effort to arrest damaging climate change by achieving zero net emissions by 2050
3. Demonstrating our commitment to reducing carbon pollution by setting an interim emissions reductions target of at least 30% below 2005 levels by 2030.
6. Exporting fossil fuels puts us all at greater climate risk despite flying under the carbon reduction target radar. The carbon emissions resulting from burning exported fossil fuels elsewhere are not counted as being part of Queensland’s emissions, but they increase climate risk for Queenslanders (and everyone else) regardless of where they are counted. Emissions from coal exported by Australia are almost twice as much as our entire emissions within Australia.more...
It makes a mockery of Queensland’s emission reduction targets if expansion of coal and gas exports outweighs the climate benefit of meeting those targets.
From 2016, http://m.greenpeace.org/australia/Global/australia/reports/Exporting%20climate%20change,%20killing%20the%20reef.pdf:
The global carbon accounting system that the Paris Agreement operates under counts emissions where they occur, so fossil fuel exporters like Australia can increase production with impunity, knowing the combustion emissions count elsewhere, and are not subject to their national commitments.
Australia’s domestic CO2 emissions in 2016 were 560 million tonnes. However, 1 billion tonnes of CO2 were generated offshore by Australian coal that year, nearly twice as much CO2 as it is producing domestically.
Even if Queensland meets its net zero emissions target, the actual climate benefit of doing so could be completely(?) wiped out by the climate harm caused by allowing NEW fossil fuel exports.
7. Will Queensland become rich from allowing new coal and gas extraction projects? The short answer is no, although even if allowing new coal and gas projects were to earn a lot in royalties, for climate reasons it would be very shortsighted to allow them.more...
In 2015-16 the Queensland government received $35.7 million in gas royalties, and in 2016-17 they received $98 million (Queensland Treasury figures). We can’t know precisely how much Queensland would forgo in royalties by banning new gas wells, but the above figures for royalties from ALL existing gas wells suggest it would not be an enormous amount.
Since 2012 the federal Petroleum Resource Rent Tax (PRRT) also applies to both onshore and offshore gas (and oil), but it is set up as a tax on profits after all the exploration and extraction costs have been recouped. That means it is usually many years before there are any PRRT payments from new gas wells, but it also means that gas extraction companies pay less income tax than otherwise since the current PRRT rules allow the companies to offset enormous amounts in PRRT ‘credits’ against their income tax liability (see this 2017 article in The Conversation).
The proposed deferred coal royalty payments from Adani are calculated as being somewhere between $370 million and $724 million over 5 years, suggesting that refusing to allow even a massive coal mine like the one proposed by Adani would mean Queensland would only forgo about $100m per year in royalties. (From The Australia Institute in June 2017).
By comparing subsidy figures in Table 1 in Mining the Age of Entitlement (from TAI) with Queensland coal royalty figures obtained from the Queensland Treasury, we see that coal subsidies over recent years have amounted to around 65% of the amount Queensland received in royalties from coal exports.
This means that the benefit to Queensland coffers from allowing coal extraction for export has been only about $470 million/year. Here the focus is on coal exports rather than domestic use since the NMBI petition calls for bans on NEW fossil fuel extraction. Since 70% of extracted coal is currently exported, it seems almost inevitable that the coal from any new coal mines would be exported.
8. Expansion of distributed renewable energy infrastructure will create jobs. Fossil fuel companies like to stress that their projects create local direct and indirect jobs and follow-on economic activity. True! But new renewable energy projects and other climate-safe projects do the same, possibly in even greater numbers. What’s more, most renewable energy jobs would be near where people live rather than being FIFO jobs.more...
Perhaps the most relevant difference is that fossil fuel companies are asking the state government to approve new projects. All the government has to do is say yes to the proposed project and the jobs and benefits of the increased economic activity will happen. In contrast, the state government may have to put some effort into strategies to encourage new clean-tech or other climate-safe projects. However, if there were a legislated ban on new climate-damaging projects, that in itself would give market certainty and encourage new renewable energy and other safe projects.
9. Australia can develop new climate-safe exports to make up for forgoing potential future export income that might accrue from new fossil fuel extraction projects. Note that NMBI legislation would ban NEW fossil fuel extraction projects and the resultant new export agreements, but adoption of NMBI legislation would not affect current export income. So, just how much or how little will NMBI legislation affect future export income potential? Probably less than most people might think.more...
Banning new fossil fuel extraction projects would indeed affect future export income since virtually all new extraction would be for export. Australia’s domestic energy consumption has been close to flat for the last 40 years, and over half of what we extract is exported (Point 3 above). Various states have carbon reduction targets which, if met, will mean we need less and less extraction to meet domestic demand as time progresses. Assuming our current mines and wells are not depleted any time soon, we should need no new extraction projects to meet a falling domestic demand (and if they are approaching depletion, new renewable energy projects can be built to meet demand rather than allowing new extraction projects).
But, export income is important to Australia’s economy. The majority of companies wanting to extract and export Australian fossil fuels are likely to be foreign-owned, meaning the income from selling the actual commodity stays outside Australia. However, we do receive an injection of foreign funds to the extent that foreign companies pay wages and buy goods and services within Australia.
Other potential sources of foreign funds from foreign-owned companies are company tax and royalties. In the case of gas, Petroleum Resource Rent Tax (PRRT) also applies, but due to its design as a ‘super profits’ tax, new gasfields are unlikely to pay any PRRT for a decade or more, and in the meantime PRRT ‘credits’ reduce the amount of company tax payable.
New coal and onshore gas extraction attracts state royalties, but based on historical figures (see Point 8 above) the amounts are likely to be less than one might expect, partidularly since new extraction projects tend to receive more in subsidies and other state government assistance than established projects.
So, yes, it is important to maintain Australia’s future export income, but given the small amount of export income we actually receive from fossil fuel exports, it should be relatively easy to replace that with new climate-safe exports and new foreign investment in local renewable energy projects provided we plan and prepare accordingly.
Of course we need to stop new fossil projects of all types for climate reasons regardless of what it might cost us, but it seems we are not as dependent on fossil fuel exports for our prosperity anywhere as much as the fossil fuel industry tends to imply.
10. NMBI legislation would stop all new climate-damaging projects once and for all. Currently, as soon as one climate-damaging project is successfully stopped as a result of community opposition based around local environmental impacts or other non-climate reasons, another similar proposal nearby or elsewhere takes its place.more...
Currently the Queensland government deals with endless submissions and appeals related to threats to groundwater, endangered species, soils, native title, etc., whenever it receives an application for a new coal or gas project. Under NMBI legislation, there would be no new fossil fuel project applications.