SA Mines and Energy Journal : February-March 2010
FEBRUARY/MARCH 2010 SA MINES & ENERGY JOURNAL 23 SUSTAINABILITY Businesses languish in uncertainty following the Federal Government's failed second attempt to pass its Carbon Pollution Reduction Scheme and the non-binding outcomes from the Copenhagen conference in December last year. Nonetheless, future climate- change policy seems inevitable and businesses need to prepare themselves. The debate about Australia's response to climate change rages on. Professor Ross Garnaut has stated that to achieve global warming of less than 2ºC, Australia should cut its greenhouse gas emissions by 25 per cent by 2020 on 2000 levels -- the uppermost range of the Government's target. The policy battle lines are drawn between the Government and the Opposition. We can expect more questioning of the efficiency and effectiveness of the CPRS*, as well as negotiations with other parties such as the Greens. What is clear is that the issue will demand action and will likely be a central theme of the next federal election. In the short term, the rejection of the CPRS Bill meant Australian companies avoided any assessment of immediate impact on future asset values. This would change if the CPRS Bill passes in February. Uncertainty still surrounds domestic climate change policy, increasing risk for investors and financiers, and hindering investment decisions and companies' strategic response to carbon regulation. In the longer term, it is clear action is likely. The discussion of the role of nuclear power in Opposition policy will benefit uranium producers, while the focus on resource use will continue to affect the mining sector. Recent media coverage has ensured the public and businesses are now acutely aware of the issue, even if they don't understand the Government's CPRS. This demands a strategic response by SA mining and energy businesses to mitigate the impact on the environment of their operations and to explain to stakeholders the actions being taken. *The CPRS would require Australian businesses with activities emitting more than 25,000 tonnes of carbon dioxide equivalent (CO2-e) to annually surrender permits to the Government for each tonne of CO2-e emitted. In doing so, it puts a financial cost on greenhouse gas emissions. Carbon ... ready or not? As the debate about climate change continues to rage, Andrew Petersen of PricewaterhouseCoopers explains recent and upcoming developments. UN Conference of the Parties (COP15) The objective of the 15th Conference of the Parties in Copenhagen was to establish a global climate change agree- ment beyond the expiry of the Kyoto Protocol in 2012. The resulting accord is a non-legally binding agreement between participating nations to: • Jointly act to combat climate change. • Limit long-term global temperature rises to 2ºC, with developed nations stating their individual targets by January 31 this year. • Provide funding from developed to developing nations of US$30 billion between 2010 and 2012, and of US$100 billion per year by 2020. • Establish the Copenhagen Green Climate Fund to support climate change mitigation activities in developing countries and the Technology Mechanism to accelerate technology development and transfer to developing countries. A legally binding agreement is yet to be reached on cuts in greenhouse gas emissions beyond the expiry of the Kyoto Protocol in 2012. The next phase is likely to be debated at the COP in Mexico in November this year. Climate change protestors turn up the heat in Copenhagen.