Greensense recently attended the Carbon Trading Summit presented by the AIA. This is Part 4 of a series. You may like to start by reading Part 1, Part 2 and Part 3.

Following Tony Mahar we heard from Kim Horne. Kim was originally invited to speak in his role as the President of Chamber of Minerals and Energy. However, he instead focussed on his experiences with Alcoa Australia and Mitchell Corporation, a local trucking company.

In both cases he concentrated on the positive actions that business can take. He discussed Alcoa’s local cogeneration power plant and the sequestration of carbon from their industrial processes. He also discussed Mitchell’s initiative to convert their fleet to dual-fuel (LNG/diesel) motors.

What was particularly impressive was the approach Alcoa was taking to employee engagement. By harnessing the innovative thinking and enthusiasm of their workforce they were finding energy efficiency opportunities that benefit the environment and their bottom line.

Concluding thoughts

The tag-line for the event was ‘the bottom line’, with an event flyer that challenged attendees with the following questions:

What does the introduction of the Carbon Pollution Reduction Scheme (CPRS) mean to you & do you understand the issues that will affect you and your organisation? How much is this going to cost you and who can you go to for help?

I think this was a good event and the audience benefited from a broad range of views on the proposed emissions trading scheme. But I don’t think questions posed above were fully answered by any of the speakers.

If you attended this event looking for answers on how to prepare for the emissions trading scheme, here are a few things to think about. First and foremost, it is important to understand that the point of an emissions trading scheme is not to just be another tax. It is intended to help encourage investment to reduce the carbon intensity of your business. You need to be viewing this as an opportunity to transform your business in a positive way.

To start with, you must make sure you fully understand your compliance obligations. Do you need to report under NGERS? Are you likely to be a liable entity under the CPRS? You may need to take some immediate steps because the first reporting period for NGERS commenced on the 1st of July 2008.

Next you should do some commercial analysis and modeling. Do you know the carbon intensity of your business? You don’t need to do a full lifecycle assessment of all of your products services, like that undertaken by Mars Foods, but your should still follow a standard methodology. You should develop some new organisational metrics to help you to manage the carbon performance of your organisation. For example, these might be ‘tonnes CO2e per unit shipped’ or ‘tonnes CO2e per $1,000 EBIT’. You should also model the likely impacts on your business of different carbon cost scenarios. You should definitely know at what WACCO2 (weighted average cost of carbon) the viability of your business, in its current form, is put at risk.

Now begin to develop a register of carbon abatement opportunities: initiatives that will reduce the carbon intensity of your business. You should also adapt your capital expense planning process so that business cases for new initiatives consider impacts on carbon intensity and WACCO2. Consider starting a programme of employee engagement and innovation. Your workforce will be your best source of opportunities to innovate and transform your business.

Lastly, start thinking more broadly about the sustainability of your business and the opportunities it presents, not just for your bottom line but also for your community and the wider society and environment. Climate change and carbon management should just be one aspect of your overall sustainability strategy.

The Government is setting a price on carbon to help trigger a transformative journey for your business, the economy and society generally. If you’d like help with this journey, we’d be more than happy to help.

Tags: carbon trading summit

This entry was posted on Friday, March 27th, 2009 at 7:56 am and is filed under Climate Change, Events. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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