Australian business not ready for emissions trading scheme, survey shows

The vast majority of Australian businesses do not understand the Government’s emissions trading scheme, with a new survey showing only 15% are confident they have sufficient knowledge of the pending legislation.

The survey, undertaken by the Australian Industry Group and accounting firm KPMG, also shows that 30% of businesses surveyed have no knowledge of key elements of the scheme.

The report surveyed about 400 businesses in the manufacturing, construction and services sectors in order to establish what stage businesses were at in terms of adopting a carbon trading scheme.

The 400 or so businesses that were surveyed had a total of 205,000 employees and over $76.5 billion in annual revenue. The survey found that 46% of large businesses are likely to take direct actions to reduce their carbon emissions, compared to 24% of medium sized firms and 17% of smaller firms.

It also discovered that over 55% of all businesses surveyed have not taken steps to become better informed about the upcoming scheme, while almost 40% reported an increase in costs of complying with increased carbon regulation.

But there are some businesses who are acting on climate change.

About 75% of businesses currently measure their “carbon footprint”, or at least plan to do so over the next three years, while around 38% of businesses have taken steps to reduce direct emissions.

About 60% have taken steps tor plan over the next three years to purchase “clean” equipment. Additionally, 33% have assessed the fiscal impacts of the upcoming carbon reduction scheme, while more than 25% have actually assessed opportunities that have arisen from the scheme itself.

David Mitchell, principal consultant for carbon solutions at Energetics, a consultancy firm that advises businesses on green policies, says the results are “not unexpected”.

“I think the reason it’s not unexpected is because the legislation is not finalised and it hasn’t passed Parliament, so many businesses don’t know what to do.”

“While a number of businesses have done a lot of work, it’s a clear a lot of them haven’t.”

“What I think will help is when the scheme is fixed, and people understand it, then they can take action. When or if the legislation is passed, then everybody will start to understand it and industry people will start talking to businesses about what they need to do.”

AiG chief executive, Heather Ridout, described the survey’s data as a mixed result.

“There are plenty of very encouraging signs that businesses have begun to take active steps to measure and manage their carbon footprints. Businesses also have strong plans to take these initial steps further over the coming few years.”

“However, the survey also points to some significant problem areas. Businesses are not yet well-informed about the Commonwealth Government’s proposed CPRS. While some businesses have a very good understanding of the key elements of the proposal this is far from widespread. There is clearly a great deal more that needs to be done before we can assume business is adequately prepared for the scheme and its impacts,” Ridout said.

Ridout also said one of the biggest concerns is the proliferation of regulatory measures, including rising costs, with 72% of businesses expecting increases in “regulatory burdens” over the next three years.

But 47% of businesses identified areas to reduce costs of compliance through better coordination with governments.

“Ai Group urges the Government to put right at the top of the policy agenda a plan with clearly defined targets aimed at getting rid of unnecessary and productivity damaging climate change regulations,” Ridout said.