Carbon Emissions

Australia’s carbon emission scheme is scheduled to commence mid-2012. Every organisation and every business will be impacted upon by the scheme. While only a small number of organisations, those recognised as bulk carbon emitters will be required to purchase an emissions permit to cover their expected emission levels, it can be expected any cost increases associated with reducing carbon emissions by these businesses will be passed onto every other business in the form of increased utility, transportation and packaging prices. Small businesses are not required to assess emissions or pay for emissions permits.

The cost of these permits has been fixed for the three year transitional period. After 2015 it is envisaged an emissions trading process will facilitate the purchase and sale of emissions permits.

The fixed price for emission permits enables management teams to begin planning. Emissions permits represent both an asset and a liability, even prior to the commencement of a trading scheme. This means there are financial and taxation implications that need to be considered in financial projections.

While it is unlikely any organisation in healthcare, aged care or the nonprofit sector will have to assess and report upon their carbon emissions, it is to be expected that as large carbon emitters develop technology and strategies for reducing emissions, other businesses and organisations will also begin to adopt them. It is possible such strategies and technologies may create cost savings and provide a competitive advantage. Reducing emissions may help aged care providers to increase their margins in a competitive environment.

The first step in maximising savings and reducing emissions is to develop a learning process designed to inform people on what emissions are, what activities emit emmissions, what emissions cost and the benefits of reducing emissions.

Then you need to conduct an audit. If you dont know how, and it can be difficult to obtain guidelines, then retain an emissions expert or consulting firm. They will introduce you to tools that enable you to identify and measure emissions.

Communicate the results of the audit. Its a part of the learning process. People need to be aware of how costs are incurred, where the root causes are and what needs to be done to reduce emissions.

Take action to reduce emissions. Identify opportunities for claiming emissions offsets and finally monitor the situation while continuously looking for opportunties for further reduction.

The sooner boards and managment teams commence the process of planning and forecasting the better placed they will be when the emissions scheme kicks off in 2012. Ultimately the actions taken to reduce emissions are expected to create operational efficiencies and reduced operating costs.


About John Coxon

Principal consultant for John Coxon & Associates, a management consultancy working with boards and management teams in healthcare, aged care and not for profit organisations to develop effective strategic planning processes and social enterprise business plans
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