Business in limbo land as Federal Government drags chain on pollution management policies: report

Most of Australia's biggest polluters don't believe their energy bills will fall as a result of the carbon tax repeal, Deakin University research has found.

The research will be handed to the Federal Government, along with recommendations it address lingering business concerns about carbon pricing regulations and clarify its plans to offer incentives to continue the investment many have already made to cut their emissions.

The recommendations are contained in a report to be released by Deakin University today, based on the results of a survey of 87 of Australia's biggest polluters.

The Carbon Risk Management: In an Era of Changing Regulations survey asked Australia's biggest polluting companies from industries including energy, manufacturing, mining and construction, what they were doing to reduce risks associated with managing pollution, including minimising emissions and associated costs such as the now defunct carbon tax.

The survey was part of a larger research project between Deakin University's Centre for Sustainable and Responsible Organisations (CSaRO) and Macquarie University, funded by the Australian Research Council's Linkage Project scheme.

CSaRO Director Professor Nava Subramaniam said the survey found half the respondents felt little or no choice but to continue to invest in management systems that would lead to better risk controls and measures to reduce pollution levels.

"However, the majority of respondents did not agree that the Government's planned Emissions Reduction Fund would benefit their company. This appears to be much related to poor articulation of the policy to date," Professor Subramaniam said.

An overwhelming 80 per cent of survey respondents believed the carbon tax would be replaced in some form in the future anyway.

Prof Subramaniam said the survey showed Australian companies were in limbo.

"To stop the good work that many of them have started on setting carbon management systems would be unwise" she said.

"Such investments need to be viewed from a mid to long-term stance. A bundle of complementary policies are needed including energy efficiency initiatives, low carbon electricity generation and regulatory sanctions.

"Yes the problem is complicated and thus the solution needs to be sophisticated.

"On the positive side, many companies feel it prudent to continue with some of their carbon management practices, and not drop the ball on being better environmental neighbours in the community.

"Corporate social responsibilities as well as brand image play a critical role. Clearly, it is not simply a matter of a carbon tax or no carbon tax.

"But while this may ultimately be a good thing, the Government must heed the warnings from this report.

"The reality is most companies do not see the repeal as the last word on Australia's carbon policy, but a prelude to an unknown future where some form of carbon impost is re-introduced, whatever the name next time around.

"Businesses are waiting for confirmation of what exactly the Government plans to do with its talked-about but ill-explained Emissions Reduction Fund (ERF), set to replace the carbon tax. 

"They are therefore waiting to find out what they need to do, how much they need to spend, when and on what, in order to be eligible for the incentives to flow from the fund.

"And waiting to see when the next policy U-turn might occur and therefore how they can prepare for when a new form of the carbon impost emerges."

But Professor Subramaniam said business couldn't afford to wait.

"The world's powerhouse economies of China, Korea and the US are certainly not waiting; they are all preparing to lower their countries' own carbon emissions and if Australia wants to compete on a global scale they'd better be doing the same – carbon tax or no carbon tax," she said.

Recommendations for Government contained in the report, include:

• Address the lingering business concerns about the carbon pricing regulations;
• Provide clearer details on ERF to businesses;
• Investigate whether voluntary carbon management actions can be further promoted;
• Consider the use of past emissions data to set baselines for future emissions when developing the "safeguards mechanism" feature of the ERF; and
• Provide additional and/or alternative incentives for entities to operate more efficiently in a low-carbon economy.

The report will be available on Wednesday, August 20. Professor Subramaniam is available for comment.