The Australia Institute Chief Economist calls for moratorium on new coal mines

A LEADING economist has slammed Australia, saying our nation’s plans to increase coal mining is ‘bats***’ crazy’.

AUSTRALIA is the “little country that wants to ruin the world”, and it might just succeed thanks to Tony Abbott’s push to increase coal mining.

That’s the view of The Australia Institute’s chief economist Dr Richard Denniss, who says our government’s attitude to mining is “bat sh*t crazy” and warned it could undermine global efforts to stop climate change.

Speaking at an event in London, Dr Richard Denniss said government-backed plans to ramp up Australia’s coal output to more than 604 million tonnes a year was very dangerous.

“To put it simply, if the world wants to tackle climate change and Australia wants to double its coal exports, someone is going to lose,” he said.

“If we succeed in our stated ambition of building mines that dwarf European cities, some countries, then there is no way we’re going to tackle climate change.”

The comments come as Kiribati’s President Anote Tong launched a global appeal to leaders and companies to support a moratorium on new coal mines ahead of the United Nations Climate Change Conference in Paris this December. It’s billed as the most significant event since the Kyoto Protocol for securing an agreement to tackle carbon emissions.

However Dr Denniss said Australia could single-handedly scupper these global efforts by putting downward pressure on prices which flood the market with cheap coal and make a transition to renewables less likely.

He said Australia’s share of the seaborne coal market is greater than Saudi Arabia’s share of global oil and “our plans are going to have consequences far beyond our borders.”

“If you think Saudi Arabia doubling the oil output would put downward pressure on price, then Australia doubling coal exports would put downward pressure on price.”

“We’re a little country that plans to ruin the world and our politicians are not going to stop this.”

Environmentalist say the port Adani wants to build threatens the World Heritage site. Picture: Sarah Lai

Beyond Green activists dressed up as "zombie koalas" protest outside banks to stop them funding the Galilee Basin projects: Picture: Tara Croser.

The Abbott government has made mining and infrastructure investment central to their economic plan with the Prime Minister saying coal is “good for humanity” and will power the world for “decades to come”.

Earlier this month Mr Abbott accused the judiciary of “sabotage” for holding up approval of the Carmichael coalmine in Queensland’s Galilee Basin after conservation groups raised concerns about native animals in the area. The massive and controversial project from Indian energy giant Adani includes plans for a mine, railway and port in the Great Barrier Reef that has been in the works for five years and is now awaiting final approval.

The government has claimed it will add 10,000 jobs to the area, though this figure has been disputed and comes at a time when the mining industry is shedding workers, losing more than 33,000 jobs between May 2014 and May 2015.

Dr Denniss said a moratorium on new mines makes good economic sense as it would keep coal prices high and prevent the “green paradox” — whereby the threat of action actually forces companies to ramp up production.

“If you owned a truck full of ice cream and the refrigerator broke, what would you do? You would drop the price and sell as much ice cream as you could. Just like Australia is planning to do.”

He also said it’s crucial Australians “get their heads around” the scale of the development and don’t hang their economic future on what many believe to be a dying industry.

“We’re an insecure country that worries about our place in the world and when big companies promise us big things it inspires a group of Australians to feel safe,” he said.

Dr Richard Denniss is the former executive director and now chief economist of the Australia Institute.