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June 11, 2009 – 10:29AM

Australian companies have done little to preempt any negative impact emissions trading could have on future earnings, risking downgrades from credit rating agencies, according to PricewaterhouseCoopers.

PwC found that more than a third, or 35 per cent, of the businesses it surveyed haven’t factored in a proposed emissions trading system. Almost a quarter of companies have done nothing at all to prepare for the carbon plan, PwC said.

Australia delayed by a year to mid-2011 on May 4 the proposed start of a carbon trading system, which places a cost on emissions blamed for climate change. The government has called for a $10 a metric ton carbon price for a year until July 2012, after which the market will determine the cost.

Companies ”risk being downgraded by investment analysts and credit rating agencies” if they don’t develop an effective carbon emissions trading strategy, Liza Maimone, Sustainability & Climate Change Leader for PwC Australia, said in the survey.

About 23.8 per cent of businesses are ”comprehensively prepared” for the introduction of carbon trading, PwC said. Most companies indicated a plan to purchase emission permits to comply with the new regime and will outsource responsibility for trading, PwC said.

Chief executives from 151 Australian businesses in the manufacturing, mining and resources, construction, transport and finance industries were surveyed.

Emission cuts

Australia plans to cut its emissions by between 5 per cent and 15 per cent from 2000 levels by 2020. The nation would increase that target to 25 per cent “if the world agrees to an ambitious global deal,” Prime Minister Kevin Rudd said on May 4.

Producers of liquefied natural gas said last year the proposed carbon pollution reduction scheme may cut Australia’s output of the fuel by half of what it would otherwise be in 2030.

Climate-treaty talks will take place in Copenhagen in December, where about 180 nations are due to negotiate an accord to replace the Kyoto Protocol expiring in 2012.

Australia’s federal opposition wants to defer a vote on the emissions trading system until after the Copenhagen meeting and the completion of US legislation. The Liberal-National coalition will move to amend the laws, which means the government may not pass them by its end-June target.

http://business.theage.com.au/business/aussie-firms-unprepared-for-emissions-trading-20090611-c451.html

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