Climate change: hoisting Rio-Tinto with their own petard

Yesterday saw Rio Tinto stick their hand out for corporate welfare, threatening to shut down their Tiwai Point aluminium smelter unless shielded from the effects of the emissions trading scheme. It is, of course, motivated purely by self-interest - the ETS would mean paying more for electricity, which would mean lower profits for Rio Tinto’s shareholders. And it’s par for the course for Rio Tinto, who made exactly the same threat just a few years ago to get government-owned Meridian Energy to cut them a cheap deal on power, and a few years before that in an effort to get the government to sell them the Manapouri power station (fortunately, they were unsuccessful). And its particularly egregious because Tiwai Point is already shielded - the ETS includes provision for companies which are “trade exposed” and adversely affected by either the cost of emissions or the cost of electricity to receive substantial amounts of carbon credits as compensation to ensure their profitability. While this shielding - essentially a subsidy from the New Zealand taxpayer to Rio Tinto’s foreign shareholders - will eventually expire, by that time we expect much of the rest of the world to be part of a global climate regime (either by imposing their own carbon price, or by having it imposed for them in the form of border taxes on imports from polluter nations).

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Tags: Corporate greed, Rio Tinto