Stiglitz addresses climate change, mining

SYDNEY, July 29 (UPI) -- Australia needs to do more on climate change and have an adequate mining tax, says a Nobel Prize-winning economist.

Joseph Stiglitz, a former World Bank chief economist, said Australia was in danger of lagging behind Europe in the development of low-carbon technologies with its wait-and-see approach for clarity on the global accord on climate change.

''It's really important for Australia to do more, on its own, even though there isn't a global agreement to embrace,'' Stiglitz said.

The Nobel laureate, on a speaking tour with The Economic Society of Australia, stressed the need for a higher price on carbon even if the science isn't absolutely certain.

European economies, he said, are developing technologies in pursuit of a less carbon-intensive future but Australia, which has the highest per capita of carbon emissions among developed nations, hasn't been doing as much.

Stiglitz told the Sydney Morning Herald that Australia could become a victim of the "natural resources curse."

''Countries that have a rich endowment of natural resources often end up with high exchange rates and so, as a result, have difficulty broadening their economy in other areas,'' he said.

His remarks came after the Association of Mining and Exploration Companies relaunched an advertising campaign against Australia's proposed mining tax.

The super-profits mining tax, introduced by Prime Minister Kevin Rudd in May, would tax mining profits at 40 percent after reaching a certain level, beginning in 2012.

The government intends to use revenues from the tax to help pay for the country's infrastructure spending and retirement funds as part of a major overhaul.

"If you are taking resources out of the country and you are not reinvesting those resources in one way or another -- a stabilization fund, human capital, infrastructure -- then your economy is getting poorer, not richer, and a good accounting framework can show that," he told a University of Queensland audience Monday.

AMEC, which represents 240 miners, had ceased its advertising campaign against the mining tax in June "in a gesture of good faith," it said, when Prime Minister Julia Gillard, who took over from Rudd in June, said that the government was going to open the doors to the mining industry and asked the industry to do the same.

Instead, the organization said in a statement, the government has embarked on a "secret deal" three multi-national mining companies, (Rio Tinto, BHP Billiton and Xstrata) "to the exclusion of 99 percent of the industry."