It’s not a message that some of the 250 or so delegates at the NSW Minerals Council’s environmental and community conference in Wollongong had been used to hearing. Or even wanted to hear.

“The idea that Australia is at risk of leading the world in climate policy is simply ridiculous,” said Cameron Hepburn, an Australian-raised and educated, now London-based economist who specialises in climate change policy and is part owner of a business that is doing very well in abatement projects in China. “It’s more a question of whether we will be the last or the second last.”

Australian miners, Hepburn said, might feel they have time on their side, but possibly not the economy as a whole. “You can chill out for the next decade, I wouldn’t be too worried about exports dropping off till then. But in the long run, fossil driven growth is not sustainable.”
 
Australia, he said, was badly placed in a low-carbon world. It ranked 15th (well below China) among G20 countries in terms of competitiveness. In cricketing terms, its required run rate was formidable, and rising all the time.
 
Hepburn had other myths to dispatch. He said China will likely have an ETS before Australia, India already has a carbon tax on coal at the equivalent of $3 a tonne (far in excess of what was contemplated in the CPRS), and he dismissed the suggestion that investment in low-carbon energy meant less wealth or even a slowdown in economic growth. “We often hear that the more you emit, the  higher the GDP. That doesn’t hold true.”

Indeed, he said, history suggests changes in energy technology often led to changes in economic and political power structures. The big emerging companies such as China and India have a vested interest in taking action and will “just get on and do it.” A survey to be released soon showing a huge upswing in patents for low-carbon technologies from India and China is just a taste of their appetite to get the lead in the so-called green economy.

And, he said, Australia should realise that carbon tariffs are being openly talked about in Europe, the US, and now in Asia. It makes sense, he argued, that if there is to be a tax, then Australia should be collecting the rent internally rather than handing it over to other governments.

Fortunately for Hepburn, his run-up had been well marked by the unexpected intervention last week of BHP Billiton CEO Marius Kloppers, who is now given credit for single-handedly bringing the climate change policy debate back into the public arena. Kloppers speech was well worth reading, Hepburn said – “it’s sensible and economically rational."

Hepburn, like many others in this space, is more used to preaching to the converted, and is rarely invited into what could be termed hostile territory. Audiences tend to want to be told what they want to hear, he admitted, and an audience of miners might not want to hear some economic truths about the carbon price. “The reactions vary from strong interest, to an appreciation of an honest position expressed on economics, rather than zealotry, and sometimes some hostility towards the conclusions,” he told Climate Spectator afterwards.

Indeed, the only feedback from the floor came from Xstrata, a company with seemingly diametrically opposed views to BHP on a carbon price. Perhaps it was because Hepburn had baited them, suggesting the industry had a choice of heeding BHP’s advice to the take the initiative, or the position of Xstrata, which was to urge the country to follow rather than lead.

Xstata Coal executive and chairman of the NSW Minerals council Mick Buffier suggested that Hepburn’s characterisation of Australia’s position had been unfair: the scope of the CPRS, Buffier said, was “way ahead” of what other countries were planning, and in any case Hepburn hadn’t mentioned the fact that the US had done little on a carbon price. Why should Australia – with only 1.5 per cent of global emissions – act ahead of US and China, which accounted for 40 per cent of emissions?, Buffier asked. Why, replied Hepburn, because failing to act leaves Australia like an “emperor with no clothes.”

Nikki Williams, the council’s CEO, says she invited Hepburn because she likes to provoke her membership. The speaker before Hepburn was Peter Sandman, a “risk communications” expert from the US whose topic was “managing outrage” and how to deal with anti-mining activists . “We try to get people from outside the industry, to provoke them to think differently about those issues,” said Williams.

So does the industry agree with Hepburn about the need to act? “I’m not certain that there is an industry-wide view on that,” Williams said. “The EU scheme is very different from the one proposed in Australia, that would have been world leading, with no quid pro quos from major trading partners.”

Williams says that an important message from Kloppers that had not been widely appreciated was the impact and the cost of a climate change policy and a carbon price. “That hasn’t been one that the media has picked up – in Europe people get it, they get it because the governments there have not shied away from the impacts of climate change policy.”