Humby offers in this chapter both an international and a South African perspective on 1) the contribution of the mining sector to anthropogenic climate forcing; 2) the effects of carbon pricing on the mining sector and the recycling of carbon revenues; and 3) the extent to which the mining industry needs to develop strategies for climate change adaptation. The focus of the discussion is on the constitution of the problem by a variety of actors, and the policy and legal responses that have thus far manifested. To date the major impetus of the mining industry’s response to climate change has largely been focused on mitigation. In two separate studies of the Canadian mining industry’s response to climate change, for instance, Ford et al. and Pearce et al. found that a high proportion of respondents were indeed making efforts to reduce GHG emissions, as opposed to actions that were targeted towards adaptation.
The most common approaches adopted by global mining firms to reducing their GHG emissions include the preparation of GHG inventories, setting of GHG emission reduction targets, implementation of new technologies aimed at the reduction of on-site emissions, energy efficiency measures, energy recycling, energy switching (moving to less carbon intensive or renewable sources of power generation), offsets (including JI and CDM projects in terms of the Kyoto Protocol), and research and development. A majority of the companies falling within the materials sector on the Global 500 offer monetary incentives for achieving energy efficiency and emissions reductions targets, for example both BHP Billiton and Kumba Iron Ore are mentioned for incorporating performance against carbon targets in their annual remuneration reviews.
Therefore, the carbon tax is probably the single biggest regulatory instrument steering the mining industry toward a low-carbon future. While the carbon tax on firms’ scope 1 emissions could be whittled down a mere ten per cent of emissions, the threat of increased electricity costs arising from taxation of scope 2 emissions appears to be driving firms to rethink energy efficiency and source of electricity supply. As the preceding discussion has demonstrated, it is difficult to pin down aggregate GHG emissions data for the mining industry globally and nationally, and difficult to compare the performance of firms based on their published GHG figures. The reporting protocol for GHG Emissions Inventories does not assist in this matter as it defines “sectors” in a broad, cross-cutting manner. As discussed above firms are responding to the call to monitor and report on GHG emissions. In a few cases absolute GHG emissions or emissions intensity has been reduced, but in others the trend is moving in the wrong direction. Some mining companies (for example, Sibanye Gold) are standing out from the herd in terms of technical innovation and creativity, which may over the long term improve their competitiveness.
The mining industry is responding slower to the need for climate change adaptation, both at a global and a national level. In this area there is a need for further policy development, probably initiated by the mining industry itself. Most of all, however, it is apparent that the global mining industry’s response to climate change is not helped by the “patchwork” international regulatory regime that has developed under the auspices of and around the UNFCCC process. Mining firms worry about competitiveness and different national mitigation and carbon-pricing policies further skew the playing field. The articulation of universally binding mitigation obligations and an international price on carbon may go some way toward making mining firms willing to introduce more radical emissions reductions strategies. It is unrealistic, to urge mining firms to accept a reduction in their market share and revenues, when the model of continued expansion of share and profits is what drives investment. Some reform of the investment landscape, both national and international, is therefore also indicated.
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