The Australian Government’s Carbon Pricing Mechanism (‘CPM’), as detailed in the Clean Energy Legislation Package which passed through Parliament in November 2011 as law, introduced a price on carbon in Australia from 1 July 2012.
Only facilities emitting more than 25k tons of CO22/year are directly liable under the system. While less than 500 companies will be affected by direct compliance obligations under the CPM, many more businesses will be impacted through increased energy and commodity prices (typically electricity, use of fuel, etc).
It is unlikely that many property businesses will trigger the liability threshold; nonetheless, the sector, which accounts for around 24% of the total Australian greenhouse gas emissions, will be in some way hit by the expected increase especially with reference to:
· Construction costs, due to an increase in cost of “emissions intensive” materials like still, glass, cement
· General energy costs
· Other costs as the price of carbon will flow through the whole economy
Considering the tight timeframe for the implementation of the carbon pricing mechanisms, affected businesses need to understand and quantify the impact of a carbon price on their current and planned projects. The clean energy policy provides also opportunities to reduce the carbon exposure, investing in less carbon intensive source of energy (e.g. use of biodiesel or renewable energy projects) and providing an incentive for low emissions building design.
Michele Villa will be presenting at this year’s Sustainable Development Conference Thursday 9th August 2012 at the Hyatt Regency Perth.