Preparing for the price on carbon

Key Points

• Approximately 500 organisations will have to pay a carbon price from 1 July 2012, following the Senate’s passing of the clean energy legislation
• The Institute’s Manager of Sustainability and Regional Australia, Geraldine Magarey, says members should plan early for the impact of the carbon price mechanism
• Suggestions include determining the effect on competitive positioning and the adjustments to pricing.

Approximately 500 organisations will pay for the carbon emissions they emit from 1 July  2012, after the recent passing of the clean energy legislation through the Senate.

The Institute’s Manager of Sustainability and Regional Australia, Geraldine Magarey, encourages members to start preparing now for the impact of the price on carbon.

'While small businesses do not need to monitor and measure their carbon emissions under the new law, there’s the 'spaghetti impact' through the economy that businesses need to prepare for. They may feel the pressure either by cost increases or through changes in demand driven by overall adjustments in investment and economic activity.

'It is recommended that businesses take stock and prepare now. According to an article in the November issue of Charter, by consultancy firm Expense Reduction Analysts, this can be done by understanding the supply chain pressures, determining the effect on competitive positioning, determining adjustments to pricing and finding out what government support is out there for small businesses,' Ms Magarey says.

A fixed carbon price of $23 a tonne will apply in the first year of introduction, moving to a flexible price after three years.

The Institute has been a strong advocate of complementary tax measures to be introduced alongside the carbon price, including providing incentives for renewable energy projects and workforce relocation to remote regions.

We also support a market-based mechanism to price carbon emissions in order to meet the bipartisan policy of a 5% reduction in emissions by 2020.

Article last updated 22 November 2011

Add your comment on this article (You must login to comment)