Monday, 20 June 2011

Carbon price delay slows projects

14 June 2011, Page: 6

AUSTRALIAN institutional investors, worth hundreds of billions of dollars, are trailing their European counterparts in funding projects to tackle climate change because of delays getting a carbon price established. In a global survey of 90 firms owning and managing assets of $12 trillion Australian respondents said they were eager to develop an approach to climate change in their investment decisions but the uncertainty around domestic policy was an impediment.

Chief executive of the Australian based Investor Group on Climate Change (IGCC), Nathan Fabian, said yesterday that his members were "actively preparing to invest [in climate projects]. But there is no doubt a lack of clarity over a carbon price is impeding investment".

Of the total assets managed or owned by the firms surveyed for the report, on average 0.3% were invested in climate change projects such as renewable energy and clean technologies. European firms led the way, investing 0.5% of assets in climate change related projects, with Australian firms following on 0.3% and US firms lagging behind on 0.1%.

The survey conducted by three international climate change investor networks, including the IGCC also found that Australian firms had a growing recognition of the physical impacts of climate change exacerbated by the recent droughts and flooding, especially in real estate and major infrastructure investments.

The investor report follows last week's Productivity Commission review showing Australia falling behind Germany and Britain in investing in carbon abatement from the power sector, but roughly in line with China and the US. A domestic carbon price is being negotiated between the government, Greens and independents, with more meetings between the groups expected this week.

The government will also hold a meeting with its business roundtable on climate change on Friday as it hammers out a compensation package for industry under a carbon tax. The Gillard government will today release a snapshot of potential climate change impacts in Victoria. The snapshot warns that climate change could drive days over 35° in Melbourne from the current nine a year to up to 26 by 2070.

In Mildura, days over 35° may increase from 32 days currently to 76. The extra hot days could drive up heat related deaths but would decrease deaths related to cold weather, more prevalent in Victoria. Rising temperatures could also drive more days of high and extreme bushfire risks, the snapshot shows.