Today there were 2 hot topics - communication on climate change
(the extroverted media performer?) and carbon accounting and
measurement (the serious number cruncher?) – but completely
entwined with the other. This was illustrated in today's launch
of both the Carbon Disclosure Project ASX200 Leadership Indices and
the CDP Australia and New Zealand Climate Change Report.
Indeed, as experience under the National Greenhouse and Energy
Reporting System deepens, carbon accounting and measurement
practices crystallise and access to public information on carbon
performance of business explode, there is an ever increasing
expectation on business to disclose and be held to account for
carbon emissions policy and practice.
Key themes from Wednesday are:
ensure, first and foremost, compliance with all legal carbon
reporting and other obligations
ensure carbon reporting and liability management is handled at
the appropriate level within the business (note that deliberate
errors in accounting may give rise to personal liability) and
ensure, from the perspective of the fiduciary obligations to
shareholders, that both the opportunities and the liabilities
associated with increased carbon regulation are identified and
From the sessions
Understanding Australia's clean energy legislative
The Clean Energy Regulator (CER) is taking a pragmatic approach
to compliance as business works through the early stages of the
carbon price. The CER's door is open to discuss any issues as
they arise with a view to finding a solution.
The conversation for business to date has principally focussed
on compliance issues with less consideration of investment
opportunities – the latter being subject to the risk of
Australia's carbon pricing mechanism (CPM) is being closely
watched by a number of countries looking to implement similar
schemes – the Australian CPM advances carbon market policy
Carbon decision making and risk management
Liable entities should develop a common assessment framework to
allow them to develop a portfolio approach to carbon
It is recommended that this framework should draw first upon
existing skills within the organisation, particularly the skills
that sit with the operational people.
Additionally, the framework should have a senior person
responsible for this project – a person in a position with
autonomy to make decisions. This is very important in times of
political and market uncertainty.
Emerging carbon economies in northern Australia
A significant percentage of land in Australia is indigenous
native title or land rights land. Indigenous peoples must be a
major part of the story of Australian carbon emissions reductions
As methodologies are developed and approved, the opportunities
in Northern Australia under the Carbon Farming Initiative are
significant, however bureaucratic delays in existing regulatory
regimes will need to be overcome.
Carbon projects in northern Australia can have significant
benefits for indigenous employment and connection to country. This
is both a core policy outcome of the CFI and a value add to the
credits produced from projects.
Analysing and modelling carbon markets
Only a few people tend to operate in the spot or short term
Very few people operate in the long term carbon market.
Most business decisions are based on the medium term market (1
to 5 years).
Australia will be a price taker from the EU market and the key
policy decisions imminent in the EU market will significantly
affect the price of carbon in Australia out to 2015 and
A critical issue for Australia will be whether the secondary
market is prepared to smooth out the significant injections of
carbon in the market for Australian Auction rules.
Quote of the day
"I disagree that compliance payers will always take the
cheaper CERs. Some buyers are equally concerned about qualitative
aspects of carbon decision making"
Mark Meyrick, Eneco Energy Trade
Looking forward – Thursday, 8 November 2012
Today we will hear from:
the Honourable Mr Mark Dreyfus QC MP, Parliamentary Secretary
for Climate change and Energy Efficiency
This legal update is an overview of existing eligible project activities and new project types proposed to be developed.
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