Firms told to prepare now for carbon trading scheme

Canberra Times
Wednesday 1/4/2009 Page: 4

Businesses have been told they are "dreaming" if they are hoping for a delay to Australia's emissions trading scheme because of the economic crisis or political wrangling. Australian Climate Exchange managing director Tim Hanlin said with a year to go before the first permits were due to be issued, businesses needed to prepare for the Federal Government's carbon pollution reduction scheme.

"I think anyone who is betting on a delay to the scheme is probably dreaming," Mr Hanlin said at the Carbon Reduction and Trading Conference in Melbourne yesterday. Australian Climate Exchange, or ACX, is a company that will provide a trading platform for emissions commodities, and Mr Hanlin has been lobbying politicians about the final make-up of the scheme.

The strong secondary market for trading emission permits the Government aims to create will result in winners and losers, and chief financial officers would be keeping this high on the agenda even in the current crisis. "A year ago I was saying this issue should be sitting with your CFO ... I don't say that any more because I take that as read," he said. "There has never been a perfect market created yet, for any commodity. "My view is here is an opportunity to set tip another competitive advantage. Even if it's going to cost you, if it costs less than your opposition then you are ahead." Climate Change Department assistant secretary Anthea Harris described the carbon scheme as the largest shake-up of the economy since deregulation in the 1980s.

Ms Harris said large emitters were already involved in preliminary reporting. While the scheme had been in the works for a decade, some emitters had shown a lack of willingness to invest in carbon reduction until the legislation was finalised. "A continuing lingering period of uncertainty is good for no one," she said. "This will have a significant impact. Having a price where there wasn't a price before will mean people will change their decisions ... " Jennifer Patterson, formerly ANZ's electricity, renewables and emissions director, said climate change had been pushed from the top of the business during the financial crisis. "Businesses are in survival mode and not thinking so mach about strategy," she said.

The National Australia Bank's head of carbon solutions, Sean Lucy, said companies he had dealt with had turned their attention from trying to influence policy to coping with the new reality. Submissions on the draft legislation, due to go before Parliament in the winter sitting, close on April 14.