Emissions trading at centre of high-stakes game

"NO JOBS on a dead planet." Those words used to adorn a smokestack on the Lonsdale Street power station. They appeared in 2003, spray-painted on by environmental activists. The best place to have seen them from was from a train heading into Southern Cross Station from Melbourne's north or west.

The power plant is no more. It lay dormant and asbestos-ridden for 25 years, and has been slowly demolished from 2007 for redevelopment.

Those words weren't lost, reappearing last week, but not on a piece of archaic industrial architecture; instead they were spoken by ACTU president Sharan Burrow.

Burrow, many of whose union constituents work in the areas in the front line of affected industries, are the very people who opponents of emissions trading say could lose their jobs unless more compensation is paid to their industries. Industries such as coal.

"There will be no jobs on a dead planet … we need support for new industries that will grow new green jobs that will enable people to have a confidence that Australia won't just be buying in its climate change solutions from China or India, but be manufacturing the solutions, creating the R&D and applying that research to implement them right here in Australia," Burrow told journalists.

She goes further: 800,000 "green" jobs in 15 years could be created if there was a massive rollout of green investment and a price put on carbon in the market. Burrow comes to the 800,000 figure aspirationally, that is, through Australia claiming a quarter share of the $6.3 trillion global green industry.

This is Burrows' response to job threats from global mining giant Xstrata, who in a private briefing to the Opposition — later brought up in question time by Liberal leader Malcolm Turnbull — indicated it will shut down four coal mines in the Hunter Valley in NSW and fire 1000 people if the Federal Government's emissions trading scheme does not give further compensation to the sector.

And going further, Xstrata says it would also halt investments in new coal mines worth $7 billion, which the company says would destroy 4000 jobs that otherwise would have been created.

Xstrata management refused several times last week to publicly comment on the issue. But those who will speak behind the scenes say the push is on for further compensation, this time with a special Australian recession theme of "jobs, job, jobs". The coal industry has two months before the legislation is due to enter Parliament and it is feeling good about its chances of a win.

On Wednesday night the Queensland Resource Council held a dinner for Energy Minister Martin Ferguson and Queensland Labor backbenchers with coal interests in their electorate, to outline the effects of emissions trading on coal and minerals more generally. Executives from Xstrata, BHP, Rio Tinto and Anglo Coal were there too, having earlier met the newly appointed parliamentary secretary for climate change and former ACTU head Greg Combet, whose seat of Charlton has significant coal interests.

At the dinner a presentation was made showing the minerals sector employs 191,300 full-time job equivalents across the state, 12 per cent of Queensland's jobs. Ferguson publicly told the mining executives to continue their fight for better compensation.

The Australian Coal Association has been selling a similar message to Government ministers and backbenchers. They say the coal industry alone employs 30,000 directly and 100,000 indirectly across Australia. Both groups say a fair share of those jobs will disappear under the trading scheme as it stands.

That is a political sobering thought for an MP whose electorate relies on coal for employment. National unemployment has risen to 5.2 per cent as Australia stands on the brink of a recession, and as the country falls into the economic abyss, unemployment is expected to rise to 7 per cent and beyond.

Many of the newly elected Queensland MPs came into Federal Parliament in the 2007 elections on large swings against the Howard government in traditionally non-Labor, coal-dominated seats.

Behind the scenes those inside the coal industry are also getting privately agitated about their "allies" in the ALP party room and union movement.

"Where are the CFMEU in all of this," one coal industry executive asked The Age last week, "where are the ACTU? Where are the ex-union types in Parliament who claim to be the voice of the coal miners and the voice of working people?

"They are going to lose their jobs, their members are going to lose their jobs."

Philip D. Adams, director of the Centre of Policy Studies at Monash University, has a different message. He admits up front there will be job losses in coal if a price is put on carbon in the economy through trading or a tax. "This is a regional issue. Fitzroy in Queensland, Hunter in NSW, Latrobe Valley in Victoria, these areas will be affected much worse than the rest of the country, and probably permanently," he says.

"But what we are talking about here is a redistribution, not only in jobs through different industries but also geographically across the country."

Adams' message is about growth across the entire economy. His research, with others, finds that jobs lost in some areas will be replaced by growth in others. He calls it a zero sum game.

"There are two steps to this argument. Firstly the view on coal is not the complete picture in the short term. There will be growth in manufacturing as we start building wind towers etc and growth in mining most minerals, even uranium, which will expand the mining sector in the short term.

"I mean steel, concrete and aluminium will not be in less of a demand; most of this green infrastructure is built from it.

"The second is long term. If the climate scientists are right — and I don't make judgements on that, I just accept their word — then every evidence we have about the effects of climate change if it goes unabated then the end game is far worse in terms of jobs than the short term."

Adams' extension of logic is thus: building a wind turbine or retrofitting a building creates jobs in mining of raw materials, in refining those raw materials, in designing the infrastructure, in manufacturing the parts, in construction, in the continued operation and so on.

He pointed to a CSIRO report from June last year, commissioned by the Australian Conservation Foundation, that found under an emissions trading scheme aiming for a carbon-neutral economy in 2050 that 24,300 additional jobs in the mining and energy industries would be created by 2025.

It's the same argument put to The Age by Pacific Hydro chief executive Rob Grant during the week, who said: "If you install something like the Government's renewable energy target (20 per cent by 2020) and emissions trading, the experience from around the world — in the US, Europe, in China, in India — is you get rapid deployment of capital into the sector and tens of thousands of jobs are created."

For his part Grant says if both the renewable energy target and emissions trading are implemented, Pacific Hydro will be able to find the capital for four new wind farms that he says will create 1200 direct jobs in five years. He adds his company is expecting 2500 direct jobs created by future projects by 2020.

Industry-wide, Grants says jobs created by the wind power industry alone could be as high as 4000 over the same period.

Tim Hanlin, a former investment manager at Woodside's renewable energy company Metasource, is another sprouting the green job message. He tried to foresee the direction of the carbon debate and set up The Climate Exchange, a stock exchange for carbon permits and offset products, in 2005.

But business has been slow recently. There have been a number of firms inquiring how trading might work, but nobody entering the international carbon trading market or looking for advice to prepare their company to buy permits if an Australian system is set up.

"What we should be seeing at this point in the policy debate is a number of people trading on the Australian carbon credit futures market, but instead we are seeing nada," Hanlin bemoans.

"Everybody talks about job losses in old industries, but what about the growth in future jobs such as carbon financial services that could be created if we had the policy in place?"

Hanlin admits there isn't much sympathy for the financial industry at the moment given its hand in the collapse of the global economy. But he says the new green financiers will have to play a role in any emissions trading or carbon tax program and the industry will expand if emissions trading gets going.

"Some of us put a lot of time and money into getting ready for emissions trading and playing a role," Hanlin says. "If (US President Barack) Obama beats us to the punch (in setting up a trading scheme) then most of the green financial workers are going to go to the US to work.

"I mean most of us are ready to get started. It's what emissions trading is all about, cutting emissions and creating jobs. Let's get going."