Kloppers said the carbon tax was consistent with the company’s principles, which he outlined in a key speech in September last year urging the federal government to take unilateral action if a worldwide policy framework could not be negotiated.
“We articulated our position some time ago and we laid out six principles at the time, which underpin our belief system on how we should address this,” he said. “Not only in Australia, but on a worldwide basis.
“It is perhaps worthwhile to talk about one of those principles, which is export competitiveness.
“Effectively, what is being proposed is an uncompensated export tax on coal and LNG, taxes which our competing jurisdictions do not have.
“I don’t want to project what happens over time. All I can say is that both customers and investors have to take into account export taxes, which other jurisdictions do not have.
“And I am sure we are no different from the competition in that regard.”
BHP faces “a lower strategic risk” than its rivals, according to Kloppers.
At its annual general meeting last October, Kloppers said he would not cover the “key design features we advocate” in detail.
But in a similar vein to what took place when the big three mining companies struck a deal with the federal government over the Minerals Resource Rent Tax proposal, he revealed “policy principles”
“A clear price signal will be necessary to reduce consumption and reduce emissions,” he said.
“Governments must operate carbon reduction programs on a revenue-neutral basis, lest the carbon price just becomes another tax.
“Therefore, the revenues raised must be returned to individuals and businesses; and emissions costs for trade-exposed products must be rebated, given that it will take time until a global system is in place.”
Kloppers stressed there were no simple answers to the carbon emissions issue and a solution required a combination of initiatives.
His climate-fearing colleague, BHP chairman Jac Nasser, provided some insight into why the company was championing a carbon tax.
“One of the great benefits of our diversified portfolio is that we face lower strategic risk from issues like climate change which may disrupt the status quo,” he said at the AGM.
“While coal and oil for example, have potential downside risk in a shift to a lower carbon economy, uranium and gas have upside potential.”
BHP is a major coking coal exporter and Australia’s leading oil producer but the company expects future technology innovations to play a helping hand.
Yet Nasser raised doubts on the benefits of carbon capture and storage.
“With 44 per cent of the world’s electricity demands in 2030 still expected to be met by coal, reducing these emissions is a pressing issue for us all,” he said.
“I should say, however, that it is not yet clear that carbon capture and storage will be a cost-effective way to deal with coal emissions and it is unlikely to be available in the near future.
“Therefore, while we are pleased with the continuing contribution of our coal business, the board and management are paying close attention to the developments in technology, government policy and market responses around the world.
“On balance, however, we remain optimistic that the emergence of innovative technologies will play a significant role in the overall long term energy solution.”
While there are valid scientific doubts about whether carbon emissions contribute to potential global warming, the strong result of the Greens party in the recent federal election indicates that climate change is an increasingly political issue.
