IF they haven’t already done so, Australian businesses should begin examining buying and banking carbon credits to capitalise on the opportunities Australia’s signing of the Kyoto Protocol presents, says Clayton Utz partner and climate change specialist Brad Wylynko.
Speaking at a briefing on what the Kyoto ratification means for Australia’s business community, Wylynko, who attended the recent climate change meetings in Bali, said Australian businesses should be looking to manage their future carbon liabilities in the wake of the Australian government’s commitment to reducing carbon emissions to 108% of 1990 levels by 2010.
“Ratifying Kyoto means we now have a firm target and a commitment from the Federal government to enter into an Australian Emissions Trading System (AETS) a year earlier than originally proposed. It is well worth looking ahead to see where credits are available that might be cheaper today than tomorrow,” Wylynko said.
Wylynko cautioned that there was a risk that credits purchased now would not be accepted under the new AETS, but this illustrated the point that each business needed to begin examining its own position.
“Businesses that buy carbon credits – now certified credits – may be in a better position when the domestic trading framework is introduced.”
Rob Fowler, the managing director of consultancy Abatement Solutions — Asia Pacific (AS-AP), who also spoke at the briefing, said while there was still a “lot of fog” around the Federal Government’s current emissions trading proposals, Australian business needed to prepare now for the opportunities that would be available to it in the future.
“The key question for corporate Australia is do you understand how the proposed scheme will work and how it will impact you,” he said.
Fowler said the accelerated implementation of an emissions trading regime in Australia meant that affected businesses – those with facilities emitting over 25,000 tonnes of CO² per year – needed to properly understand their compliance obligations and how it would impact their operational decision-making. This included how they would go about purchasing and financing compliance units and ensuring their delivery, the impact on their cash flows and other financing obligations, and whether they were eligible for project credits.
“If you’re a major emitter in Australia, you need to start developing a clear understanding of the value impact of carbon emissions and how that might evolve and have a well thought out sourcing strategy for compliance units,” Fowler said.
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