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CEO News Archive Media Speeches |
Media releaseCarbon emissions trading - bold decisions made now will pay dividendsCanberra, 1 March 2005The development of a State and Territory based carbon emissions trading system which was announced in a joint communique on 30 March by State and Territory Ministers is a welcome stimulus to the urgent need to combat climate change, said Fiona Wain, CEO of Environment Business Australia. "While our preference is for a Federally coordinated national system, we believe that the States based national system has great merit. The development of technology to combat climate change needs to be galvanised if we are to reach 60% emissions cuts by 2050. Emissions trading is the policy choice around the world to get us headed in the right direction" said Fiona Wain. "At present there are insufficient signals to the marketplace about the urgency of addressing climate change. An emissions trading scheme will provide a carbon price signal and will highlight that damage to the environment is also damage to our quality of life and our economy." A carbon emissions trading scheme will help to get Australia onto a future-focused energy strategy. It will also encourage energy efficiency which in turn will buy time to develop technologies and infrastructure capable delivering cleaner energy on a large scale. Achieving a clean energy future will not happen overnight, but proper planning can make sure that we achieve this objective by 2050. "At present we do not have enough tools tackling climate change. Industry's role is to provide the innovation, but governments must provide the enabling framework to get innovation into the marketplace and to create business opportunities. The use of market based emissions trading regulation using tradeable 'carbon credit' instruments is a proven regulatory tool to drive the necessary change. Emissions trading is the most cost effective mechanism to make our economy more emissions efficient. If it is accepted policy that our national emission profile must reduce, then emissions trading is the best regulatory tool available." Added Wain. The environment industry's peak organisation also believes that there are many new business and employment opportunities in energy efficiency, emissions reductions, and fuel switching to renewable energy sources. For example energy retrofits to the household and commercial sectors - with energy retailers, governments, and banks providing 'lease-financing' or mortgage extension financing. Or, another example, all levels of government committing to purchase/lease benchmark efficiency automobiles, this impact on the marketplace would in turn lower the unit cost for the consumer and provide a sustainable second hand market in automobiles. EBA maintains that the economic assessment of emissions trading must include costs that are currently outsourced onto the environment. A major study in Europe, the ExternE project demonstrated that the cost of coal would rise by 100% and the cost of gas by 30% if negative externalities (such as air and land pollution) created by fossil fuels were factored into their pricing. Ignoring the costs of pollution, mitigation or remediation means that the price of energy is artificially deflated and the taxpayer rather than the consumer picks up the bill. Rational economic debate should therefore include a comparison of achieving carbon emissions reductions, or facing the economic, productivity, and quality of life costs of adapting to climate change. Background information for editors and journalists: The environment industry is worth over $16 billion a year to the Australian economy and internationally the industry sits alongside IT as one of the fastest growing areas of business. The EBA's work on a toolbox for tackling climate change and its submission to the Productivity Commission on National Competition Policy Reforms highlighting the importance of addressing inefficiency, waste and pollution and internalising externalities, can be seen at www.environmentbusiness.com.au The Lowy Institute's 'Australians Speak' report released this week, demonstrated how important the issue of climate change is to the nation. The Business Council of Australia’s recently released “Infrastructure Action Plan for future Prosperity” report identified the need for some $30+ billion of energy sector investment over the next 15 years. Such investments are necessarily long-term and investors require policy certainty to reduce risk to their investment. By placing a price on carbon emissions trading schemes in other parts of the world are helping to provide that certainty for investors. The BCA report identified the uncertainty in Australia’s greenhouse policy response as a key impediment to investors in Australia’s energy sector infrastructure. The Carbon Disclosure Fund (CDF) which has foreshadowed litigation relating to latent liability has grown to US$20 trillion of funds under management. The CDF seeks investment opportunities that do not carry a carbon exposure risk and this is starting a trend where risk, liability and long-term opportunity will be new investment signals. |
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