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Climate change real? The export market's already decided

01/02/2010

Matt Shorten, Managing Director of Balance Carbon, has a message for business: establish and implement an emissions management strategy now or pay spiralling costs in the decades to come. In short, he says, businesses can no longer afford to hesitate in creating changes to meet the increasing pressures associated with an imminent carbon price across the Australian economy.

In addition, Australia’s export markets are increasingly focussing on emissions and are already applying pressure to make our exporters accountable for the emissions resulting from the production and transport of their products.

In essence, Mr Shorten said the emissions market is coming at Australian business in two directions – from domestic and foreign customers of our goods and services imposing their carbon reduction commitments and from the Federal Government’s commitment to a carbon price in our economy through an ETS scheme or similar.

No matter where the pressure comes from Mr Shorten predicts carbon costs will likely spiral dramatically upwards.

“If you consider that the current debated cost per tonne of CO2 under the first year of an Australian ETS is $10, you can expect that will double and potentially triple by even 2015.

“It’s these kinds of figures that start to drive a company toward energy and resource efficiency.”

Mr Shorten’s powerful take on the industry of carbon emissions management will be presented today in a series of symposiums in Brisbane on the energy industry being conducted by the Norfolk Group of engineering companies. Norfolk includes engineering brands such as O’Donnell Griffin and Haden. Senator Santo Santoro will be hosting the event on behalf of the Norfolk Group, his industry knowledge and exposure unparalleled in the Queensland sector.

The symposiums will then roll out nationally, in June in Melbourne, in July in Adelaide and will be presented at a number of important conferences, including Sydney’s ARBS Conference from 12-14 April.

As Mr Shorten points out, a whole range of companies, those producing 125 kilo tonnes CO2 within a fixed financial year, already face mandatory reporting and disclosure, under the Federal Government’s 2007 NGER Act. In the financial year of 2009-2010, that legislation’s threshold (above which a company must disclose its emissions) falls to 87.5 tonnes, the following year of 2010-2011 to 50 tonnes.

“So you can see that the net of companies that must report gets wider from a legislative perspective,” he says.

But the good business of managers creating systems to measure, manage and reduce greenhouse gas emissions is not just about direct financial cost per tonne nor about avoiding legislative penalties: “In many industries, where other countries have emission reduction commitments already in place, to maintain market access, an Australian company can simply no longer ignore it.

“Overseas competitors are finding it a useful way to block imports, so Australian businesses and industries in that position of needing to keep their way in, simply have to have an emissions figure and various management commitments sorted out.” Mr Shorten, whose company BalanceCarbon, provides carbon management consultancy to business, cites the agribusiness sector including wine, fishery and even textile industries as prime candidates in this arena.

“We have one client who has been approached by Armani and Marks & Spencer who want the top quality Australian wool but will only purchase it with an emissions offset price that covers the raising of the sheep, the shearing, super washing, spinning, dyeing, and freighting. Supply chains are now asking companies to supply that offset figure.

“And in terms of carbon labelling, the UK company Tesco, for example, is beginning to require product suppliers to label their products, so a packet of chips for example will tell you how many grams CO2 there are per gram of product. This gives consumers the opportunity to make an informed decision.”

In tomorrow’s symposium, key speakers include O’Donnell Griffin QLD State Manager, Mr Greg Skyring, O’Donnell Griffin HSEC Manager Mr Michael Wright, speaking on the need to prepare for this change within the engineering sector, and a presentation by eminent energy conservation speaker, Mr Kim Finnimore, of the Energy Conservation Systems company.

“The symposiums will run regularly throughout 2010,” says Mr Frank Halman, convenor of the series and O’Donnell Griffin’s National Service Business Development Manager.

“As Matt quotes in his presentation, a manager doesn’t have the luxury any more of querying the reality of climate change. The market has already decided it’s real and companies must adapt.”

“A big part of the process is understanding what the market drivers are,” said Mr Shorten. “Yes, there are some pretty big risks but there’s also some pretty significant opportunities in a carbon-constrained environment.”

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