A national, broad based, regulated emission trading scheme would provide business certainty and constitute the preferred method for bringing about a reduction in Australia’s emissions intensity and profile, according to the majority of business executives surveyed in a PricewaterhouseCoopers report launched today.
In the report, Carbon conscious*, a survey of executive opinion on climate change in Australia, 78 per cent of respondents say they would prefer a regulated emission scheme rather than the existing voluntary schemes.
Andrew Petersen, Partner and Australian Climate Change Services Leader, PricewaterhouseCoopers said, "At the big end of town and amongst the big emitters that we surveyed, every single one of them viewed climate change as strategically significant to their organisation in the next five years. This is a big shift from the days when corporate concern about climate change was primarily considered to be compliance-related.
"In our engagement with industry it’s clear that they are thinking about how to maintain growth in a carbon constrained environment and in many cases they are already factoring a carbon price into their planning. What is needed now is predictability on when and how this will come into play.”
When asked about specific impacts of climate change for their organisations, not all respondents considered that they were able to identify precisely what was at stake. Many organisations appear to be unable to fully assess the specific financial or economic impact that climate change and emissions trading may have for them.
Andrew Petersen said, "We are at that point where boards and senior management need to understand a new swathe of risk issues. Carbon literacy and numeracy are growing in the Australian business community. But we’ve observed a clear and widening gap between the thinking inside businesses that have an exposure to the global carbon market and those that do not. Measuring, understanding and reporting on an organisations environmental footprint are the all important initial steps Australian businesses have to make.”
The report examines the individual opinions of senior executives predominantly from heavy emitting organisations. 50 per cent of respondents were from the stationary energy and utilities sectors and 20 per cent from mining and resources. Meanwhile financial institutions - vital to the establishment of any derivative market - and professional services organisations constituted 16 per cent of respondents.
Respondents noted that any regulated emissions trading scheme should include all emission intensive sectors of the economy, rather than simply focusing on the stationery energy sector. This is a significant shift from existing schemes like the NSW Greenhouse Gas Abatement Scheme and the States’ proposed National Emissions Trading Scheme (NETS).
Andrew Petersen said, "The preference for a broad based emission trading scheme is likely to be have been supported for a number of reasons. Firstly it has the potential to significantly contribute to a reduction in emissions. Secondly it is expected to increase the number of players in the market which in turn is likely to ensure its liquidity and enable market participants to better manage their risks.”
By including all emissions intensive sectors under a broad based scheme, 60 per cent of respondents believe a meaningful reduction in emissions is achievable.
Andrew Petersen concluded, "Meaningful emissions reduction requires action on a number of fronts. Market-based instruments, like emissions trading, are critical in harnessing business innovation and the power of the capital markets.
"There are a number of other measures that are equally important and just as achievable. These include energy efficiency increases - ranging from vehicle fuel efficiency and building design to household ‘smart meters’ - generation fuel mix changes and technological developments, like carbon capture and storage.
Notes to editors
PricewaterhouseCoopers intends to achieve carbon neutrality no later than 1 July 2008, through the development of a carbon management plan which is likely to include the following initiatives:
- A sharper focus on energy efficiency
- Increasing the proportion of renewable energy consumed at PwC premises
- Investigating opportunities to maximize the use of video conferencing and other remote location work practices
- Offsetting the total remaining emissions through environmentally credible project activities
PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 130,000 people in 148 countries work collaboratively using Connected Thinking to develop fresh perspectives and practical advice.
"PricewaterhouseCoopers" refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.
