Will be announced in a few weeks. :) COZ will derive enormous benefit that will be immediate and extraordinary.
John Howard's climate change
April 21, 2007 12:00am
EXCLUSIVE: A CARBON trading scheme linked to the Australian Securities Exchange and modelled on the European Union's emissions offset market will be announced within weeks.
Businesses could be forced to pay more than $50,000 in an open market for every 1000 tonnes of carbon dioxide they are responsible for emitting under the model believed to be favoured by the Federal Government.
While the government has refused to confirm if it backs a trading regime to scale back the nation's greenhouse emissions, many peak business bodies are champing at the bit for a carbon credits market to be launched as soon as possible.
It is believed Prime Minister John Howard will move quickly ahead of the coming election to outline details of a national trading scheme he can control before the Opposition aligns itself with the more environmentally pro-active states on the issue of greenhouse emissions.
The states have threatened to unite to launch their own independent carbon reduction mechanism if the federal government does not act quickly.
BusinessDaily has been told the federal government's trading scheme, planned to start operating within three years, will initially apply to emissions from the energy sector.
The agriculture and transport sectors, including motor vehicles, and all other industries will be captured by the scheme in later years.
The government will decide how much carbon an organisation is allowed to produce and that organisation will be penalised by being forced to buy credits to offset any emissions over the cap.
The credits are expected to trade for between 15 euros ($A24.50) a tonne to 40 euros, which is what they are currently worth on the European market.
Energy companies will be the hardest hit.
For instance, a company that emits a million tonnes of CO2 a year could feasibly be told its emissions allocation will be set at 900,000 tonnes.
That company then has to buy the equivalent credits from the trading regime to offset the extra 100,000 tonnes over its cap.
If the credits were trading for $24.50 a tonne, the company would have to cough up a total offset charge of $2.45 million.
Big accounting firms, such as PricewaterhouseCoopers and KPMG, already have dozens of staff ready to roll out advisory products to help businesses comply with the advent of a mandatory carbon market.
Sources close to industry groups advising the government have said it is virtually certain that a national trading platform linked to global carbon markets will be in place by 2010.
Compliance with the regime will be mandatory across all organisations and their balance sheets will be forced to account for the notional cost of carbon and any investments made in sustainable activities that could earn credits for trading.
Under the new emissions accounting scheme, organisations will be required to file yearly reports on their carbon emissions in much the same way they lodge tax returns and those reports will be audited by the government.
Organisations that create CO2 offsets will be allocated credits that can be traded on a type of exempt futures market, which will be an offshoot of the ASX.
Heavy polluters that produce more carbon than their mandated allocations will be able to buy the credits to offset their liability.
At PricewaterhouseCoopers, a climate change team of 50 people are working through the accounting, advisory and legal issues of a carbon market.
The firm believes that a policy on emissions will follow soon after May 31 when the government's taskforce hands in its findings.
"We expect that by the end of the year, we will all have a good idea of exactly how a carbon trading market will be structured," the spokesman said.
PwC recently conducted a client survey that indicated the big end of business wanted a broad based trading scheme.
Energy Supply Association of Australia director Shane Breheny said a carbon credits scheme would be costlier for business to implement than the GST.
http://www.news.com.au/heraldsun/story/0,21985,21594871-661,00.html
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