Business leaders disappointed carbon plan passed without amendment

11 Oct 2011Archived News Energetics in the News

Published:  ABC Radio PM program. Executive Director, Jonathan Jutsen spoke to reporter Michael Janda about the carbon price legislation and the fact that business groups are still looking for the carbon pricing scheme can be changed before it passes the Senate and becomes law.

Transcript

BRENDAN TREMBATH: Business groups still hope the carbon pricing scheme can be changed before it passes the Senate and becomes law.

The Business Council of Australia's president Graham Bradley wants substantial amendments, including a lower starting price.

But a leading climate change consultant who advises large businesses says the Government's scheme is fundamentally sound.

Business reporter Michael Janda has more.

MICHAEL JANDA: In contrast to the hostilities in Parliament, Business Council of Australia president Graham Bradley was largely preaching to the converted at a business lunch.

BUSINESS WOMAN: Why is it that our government is so selectively listening?

GRAHAM BRADLEY: Well, there's much in your question, which I think many of us would agree.

MICHAEL JANDA: Speaking at the Australia-Israel Chamber of Commerce, Mr Bradley expressed his disappointment that the carbon pricing legislation passed the House without amendment.

GRAHAM BRADLEY: Without the Government taking seriously the amendments which the Business Council believes are essential to make this a workable and responsible program.

MICHAEL JANDA: Mr Bradley was asked afterwards what he wanted changed.

GRAHAM BRADLEY: At every review point before we ratchet up the cost of carbon in this country, that the Government has an opportunity to take into account the economic circumstances of the country, the situation in the world economy and how the increased carbon price might jeopardise, not only our industries and their competitiveness, but also the bottom line of the Federal Government's budget.

MICHAEL JANDA: So you're not against carbon pricing per se?

GRAHAM BRADLEY: No, this is not an issue about whether we should do this. We've advocated starting at a lower carbon price, because the price we're going to start out in under this legislation is one of the highest in the world and right at a time when I don't think the Australian economy is nearly as resilient at the Government feels it will be.

MICHAEL JANDA: But Jonathan Jutsen, the founder of climate change and energy efficiency consultancy Energetics, says the current scheme is a good starting point to reduce pollution.

JONATHAN JUTSEN: The legislation package I think is fundamentally sound and I think that one of the things that people often forget is though the carbon price will increase energy prices, if they take the lead of this package and improve their efficiency and reduce their consumption, their overall costs may actually be reduced by taking action in this area.

MICHAEL JANDA: Mr Bradley says the Government's scheme focuses too much on a price for carbon, and not enough on opportunities to mandate or encourage lower emissions levels.

GRAHAM BRADLEY: It's only one of the things that can be done and I think everybody's always felt that a multi-faceted approach was needed to address the global emissions challenge. Countries like the United States have walked right away from emissions trading and carbon pricing per se, but they are introducing legislation to require cars in the future to have a higher mileage per gallon and there are those kinds of regulations which might fall into the category I discussed today as good regulations.

MICHAEL JANDA: Jonathan Jutsen says it seems odd for business leaders to be effectively calling for more regulation, rather than supporting a market-based mechanism.

JONATHAN JUTSEN: There's a good application for targeted regulation and I think it can be very cost effective in specific areas but I think that you obviously also need other incentives, both financial incentives and correct pricing, to get the best benefit for the community.

I mean it's interesting that the Business Association should argue for more regulation and not using a market mechanism (laughs) as the main mechanism for action in this area.

MICHAEL JANDA: And Mr Jutsen says the current legislation does more than just put a price on carbon.

He says the incentives and grants to implement energy efficiency, along with the higher cost of electricity, will drive most major companies to reduce their power use soon after the scheme comes into effect, even though the Opposition has promised to dismantle it.

JONATHAN JUTSEN: I think most businesses will see that we have legislation in place and there's a reason to act on it and probably won't treat too seriously at this stage the Opposition's approach.

What I'm expecting to see is a lot of companies are now moving forward much more rapidly to take advantage of energy efficiency opportunities they have in their business and encourage by and supported by grants and finance that are in this carbon package.

What I think will be the difference now is that, that was the leading companies that were doing those programs, and I think you'll find a lot more of the mainstream of business will now join them in seeking opportunities to reduce their carbon emissions and reduce their energy costs.

MICHAEL JANDA: Mr Jutsen acknowledged that his business stands to gain from companies seeking advice on how to become more energy efficient, but with renewable energy companies also to benefit, and much of the finance sector also eagerly awaiting opportunities from the emissions trading scheme to start in 2015, it perhaps goes to highlight that most policy changes produce winners as well as losers.

BRENDAN TREMBATH: Michael Janda.

Click here to listen to the full interview with Jonathan Jutsen.

Source: ABC Radio PM program.

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