Securing a clean energy future - What the Carbon Pricing Mechanism means for business

14 July 2011

The Government has repackaged the proposed mechanism as part of a wider climate change plan – Securing a Clean Energy Future – which places more emphasis on renewable energy, energy efficiency and Government assistance than the disbanded Carbon Pollution Reduction Scheme.

The four elements of the plan are:

  • A carbon price
  • Renewable energy
  • Energy efficiency
  • Action on the land

The Government has re-affirmed its commitment to achieve at least a 5% reduction in Australia’s greenhouse gas emissions by 2020 (from 2000 levels) and is now proposing a target of an 80% reduction by 2050 (from 2000 levels), in line with targets in the United Kingdom and Germany.

With the Greens and key independents confirming their support for the principal elements of the plan, it looks likely that legislation to implement the Carbon Price Mechanism will pass through Parliament later this year – with draft legislation to be released for comment by 31 July 2011.

Businesses must now assess the impact the changes will have on their business. Key issues to consider include:

  • whether you will be required to acquire and surrender carbon permits
  • opportunities to minimise your potential exposure or to allocate liability within your corporate group or between joint venture participants
  • whether you will be entitled to any industry assistance, grants or other Government funding and navigating application processes
  • whether your contracts allow you to pass through any cost increases as a result of the Carbon Price Mechanism and whether your suppliers will be entitled to pass through any cost increases to you
  • whether you will need to make disclosures to the market under the ASX Listing Rules and the Corporations Act 2001 (Cth)
  • opportunities to acquire or create carbon offsets
  • potential exposures under funding agreements or securing new funding in the affected sectors
  • how greenhouse gas information is being collected and analysed in your organisation
  • if appropriate, the preparation of a submission on the draft carbon pricing legislation when it is released at the end of this month.

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The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.

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