Australia resources buoyed by UN climate talks stand

Australia resources buoyed by UN climate talks stand

SYDNEY (Reuters): Australia's powerful resources sector on Monday welcomed a strong stand by the federal government at collapsed UN climate talks in The Hague.

This followed a breakdown of the talks, aimed at limiting greenhouse gas emissions, after Australia, the U.S., Canada and Japan insisted that carbon sinks, or forests which absorb greenhouse gases, be included in counts of carbon dioxide emission control.

Australia -- a major producer of coal and metals which rely on hefty inputs of coal-fired electricity -- was split between industry and its strong environment lobby on Monday after The Hague talks collapsed.

Greenpeace activists chained themselves to a shale oil plant in Queensland to protest failure of the Hague talks and the World Wide Fund for Nature (WWF) called on Australia to stop looking for carbon credit "loopholes".

The Australian Chamber of Commerce and Industry also expressed disappointment at the lack of agreement in The Hague.

But Australia's resources sector was jubilant that the federal government, which took exactly the stand at the climate talks that the producers wanted it to do, had held out against emission curbs without carbon sink tradeoffs.

"I was encouraged to see that countries are prepared to stand their ground...ultimately that will lead to a much more practical outcome," Michael Pinnock, joint executive director of the Australian Coal Association, said.

"If they'd caved in and had a meaningless papered-over agreement, that would have been much worse, disastrous," he said.

Australia is the world's largest coal exporter, shipping about 175 million tons, worth around A$8.3 billion, a year.

The Australian aluminum industry, which uses major inputs of coal-fired electricity to produce almost 10 percent of the world's aluminium each year, was similarly pleased.

"We certainly supported the broad lines taken by the government...they did a pretty good job," said David Coutts, executive director of the Australian Aluminium Council.

"You just can't say 'hey, we're suddenly not going to have any fossil fuel anymore'."

The Australian Chamber of Commerce and Industry said it was disappointed with the lack of agreement at The Hague.

"Business has not been given the certainty it wanted. The world had missed the opportunity to take real steps to reduce greenhouse emissions by introducing market-based mechanisms," chief executive Mark Paterson said.

Australia, together with Canada and Japan, backed the U.S. in The Hague in arguing that Kyoto targets could not be met without gas emission counts including carbon dioxide soaked up by forests through carbon sinks.

This was opposed most strongly by European nations.

Australian business said on Monday it saw the lack of agreement at The Hague as merely a suspension of negotiations.

Flexing muscles

"I think if everyone goes back in May (at the next meetings) having taken a deep breath and a cold shower we would be pretty hopeful that a sensible conclusion can be reached," Coutts said.

"If you keep asking for things which are undeliverable and very questionable in dealing realistically with long-term problems, you have people that are not prepared to agree with it," he said.

Coutts blamed the EU and extreme environment groups for the failure of agreement in The Hague.

Australia's resources industries, some of the country's largest, were major beneficiaries of the Kyoto agreement of 1997, which permitted Australia to increase its emissions by eight percent on its 1990 level.