This month, Australia introduced a carbon tax that will require about 300 mining, energy and other industrial firms to pay $24 USD for every metric ton of greenhouse gas emitted. The tax has received a mixed reception, but many regard it as an opportunity to improve energy and resource efficiency throughout the nation.
Ecomagination.com talked to Ben Waters, director of ecomagination for Australia and New Zealand, about how the tax will create new jobs, spur investment in renewable energy and speed the transition to a cleaner and more prosperous economy.
What have Australia’s historically low energy prices done to energy efficiency in the country?
Ben Waters: Due to the low costs of energy in Australia, we are one of the most carbon intensive developed economies in the world.
Australia is sitting on 700 years’ worth of coal. This has meant cheap power prices which haven’t historically encouraged energy efficiency. Work by economists Vivid Economics commissioned by GE showed that Australian businesses are generally less efficient than their peers in key trading partner economies such as U.K., Germany and the U.S.
The research also revealed that it is possible for economies to reduce carbon emissions while maintaining economic growth and prosperity. If we look at the experience of other economies that are already on the move towards higher carbon productivity, we can learn how to do this most efficiently.
Many businesses are generally supportive of curbing emissions but hesitate when it comes to signing on for a plan with specific costs. How do you get them to embrace a specific plan?
There is a need to act on carbon pricing. Government has legislated. Business should now swing into action and get on with making money and creating customer value in the new environment.
The time for policy advice is over; the time for action has arrived.
Countries and companies that embrace cleaner energy and use energy more efficiently will win. They will be quicker to respond to the opportunities for new jobs and new investment.
How have Australian businesses been adapting to the new carbon price?
Business is getting on with the job of reducing energy usage. A recent report, commissioned by GE and prepared by the Economist Intelligence Unit, highlighted that 85 percent of businesses directly impacted already have a strategy in place, with a further 6 percent in the midst of developing one.
More than half have developed broad strategies that encompass their external partners or supply chains, in addition to their own business, so we can expect to see a ripple effect or carbon abatement throughout the economy.
Now it’s about action, rather than policy.
The big opportunity for business is in improved productivity from lower energy usage and innovation aimed at cost reduction and growth.
Next page: Taking the uncertainty out of carbon pricing
This article originally appeared on GE's Ecomagination site. It has been reprinted with permission.