Carbon Price impacts for CFA

The carbon price is due to commence in July 2012. Under the carbon price, liable entities (businesses, companies, organisations etc) will be required to purchase ‘permits’ for their greenhouse gas emissions. The carbon price creates an incentive for entities to reduce their carbon emissions (where it is cost effective to do so) and stimulates investment in cleaner forms of energy production.

The amount of greenhouse gas emissions generated by an entity will determine if that entity is required to participate in the carbon price mechanism. An estimated 500 Australian companies (responsible for around 60% of the nations’ greenhouse gas emissions) are expected to be liable under the Clean Energy Future plan. This includes power generators, mining operators, landfill operators and ‘heavy industry’ such as steel and iron manufacturers.

According to the Arup Carbon Pricing briefing paper, CFA does not currently trigger emission threshold levels for liability under the carbon price mechanism. Emissions associated with prescribed burning activities are not covered by the CPM and do not contribute to CFA’s liability.

Although CFA has no direct liability for the carbon price, there is likely to be a range of indirect financial impacts for the agency. The extent of these impacts will depend on the degree to which liable entities pass on their costs through the supply chain. Broadly, indirect financial impacts may include cost increases for electricity and gas use, fuel consumption, waste disposal to landfill, building materials and office consumables. 

To minimise exposure to cost increases, improved energy efficiency and waste reduction opportunities are key response measures. Energy efficiency and waste audits of key CFA buildings and functions would clearly identify areas for improvements. Typically these initiatives could include:

• Replacement of lighting with more energy efficient alternatives,
• Upgrades to more energy efficient appliances,
• Introduction of lower emission vehicles and fuels to the transport fleet,
• Installation of solar photovoltaic panels,
• Behaviour change programs aimed at reducing waste to landfill and
• Purchase of Green Power and Carbon Offsetting.

Arup will now develop a comprehensive Carbon Mitigation Business Case Cost-Benefit Analysis for CFA. The focus of this work is to identify cost effective opportunities for CFA to achieve carbon emission reductions across CFA operations. The Cost Benefit Analysis will inform decisions to better manage our energy consumption and the associated costs, including CFA’s indirect exposure to the carbon price. The Cost-Benefit Analysis is due to be delivered to CFA by early July.

For more information on the Australian Government’s Clean Energy Future Plan, go to: www.cleanenergyfuture.gov.au. This website contains general information about the Clean Energy Future Plan and provides tips for householders and businesses to save energy and money.