A recent industry trial has shown that majority of Australian businesses prefer an emissions trading scheme (ETS) as opposed to the carbon price currently in effect.
The report, prepared by Aecom and commissioned by Businesses for a Clean Economy, surveyed 570 Australian businesses across all sectors – including ASX 100 and carbon price liable entities.
It was found that 88% of companies ‘strongly agree’ to the statement that Australia needs to reduce emissions to address climate change, with a further 11% that ‘agree’.
And, contrary to popular belief, it was not carbon reduction that concerned companies but the uncertainty of not making or changing environmental policy. Approximately 78% of the companies surveyed said that uncertainty around carbon price was negatively impacting business.
Some 43% of respondents reported that insecurity around carbon price policy impacted investment decisions such as timing of investments, expected payoffs and securing funding.
Furthermore, it was uncovered companies have put off expanding into new markets and products as well as delaying hiring new staff due to carbon price policy.
The majority of companies (65%) prefer an emissions trading scheme compared to a fixed carbon price (29%). Furthermore, and companies overwhelmingly prefer Labor’s Clean Energy Future Package (85%) to the Coalition’s Direct Action Policy (7%).
Currently, Labor’s environmental package consists of the Clean Energy Future Package but will soon include a move towards an ETS on July 1, 2014. The Coalition plans to introduce a microeconomic industry-focussed policy plan with a 15,000 strong ‘green army’ that requiring large amounts of capital and a sizeable institutional framework to support an emissions reduction fund.
The survey found that an effective ETS can provide a lot more flexibility and efficiency than a carbon price or industry compliance policies. A proper ETS acts as an efficient economic market in which price and quantity can be easily changed and traded.
An ETS can also provide extra income incentives for low-carbon producing businesses that can sell off credits to carbon producers.
Not only will and ETS provide a clear price signal for less carbon-intensive practices but will also deliver a framework that allows for cost and operating certainty in businesses present and future. New survey shows business support action on climate, and a carbon price over Direct Action.
Andrew Peterson, a spokesperson for Businesses for a Clean Economy, said that emerging clean economy businesses are feeling the most from uncertainty in environmental policy, adversely affecting their ability to receive funding, hire staff and expand.
He said businesses want to move forward towards a cleaner, more efficient economy without the uncertainty of policy changes.
Of the 180 respondents, 81 per cent were from mainstream business, with the remaining 19 per cent from the fast-growing sector providing services to the cleaner economy.