Energy Efficiency One Part of the Bigger Climate Issue

The BCA and its members have strongly endorsed the development of an emissions trading scheme as part of a multifaceted response to climate change that includes research and development, adaptation and energy efficiency.

The BCA has also highlighted that the absence of clear policy frameworks and inconsistent and conflicting state-based policies have created an environment which does not facilitate longer-term business investment decisions in areas such as low- emissions technology and energy efficiency.

Companies are not in the position to make long-term energy efficiency and other investments when the policy details that impact on the viability of those investments are not known.

The Climate Institute’s current policy brief on energy efficiency simply underscores companies’ difficulties in making long-term investments in this climate.

It is to promote the most efficient reduction in energy use that the BCA is working to get the policy details right on the Carbon Pollution Reduction Scheme (CPRS) and the COAG review of energy efficiency policies and programs.

Additionally, the Climate Institute appears to have overlooked assumptions made in the BCA publication Modelling Success: Designing an ETS That Works. That publication, released in August 2008 in response to the federal government’s green paper consultations, analysed the impact of the government’s initial Carbon Pollution Reduction Scheme (CPRS) design on 14 emissions-intensive, trade-exposed (EITE) businesses.

The BCA case studies assumed that companies invested in energy efficiency and other methods of emissions reduction costing up to $20 a tonne.

The publication also highlighted that the initial approach outlined in the green paper would have unintended consequences, including business closures and restructures, in the absence of a global response.

The government’s white paper, released in December 2008, included refinements to the proposals in its green paper to address those impacts.

Even with these refinements, EITE industries will still face substantial burdens, including purchasing up to 40 per cent of their permits, absorbing an annual reduction in permits allocated, and an increased price of carbon.

The BCA continues to work for the design of a workable and effective CPRS.