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The Low Carbon Growth Plan for Australia:
providing climate services to businesses
Professor David Griggs, Megan Argyriou and Scott McKenry, ClimateWorks Australia
W
hen people think of the provision of climate services
to business or industry they probably think of the
provision of weather and climate information. Most
businesses are dependent on the weather in some way and many
are vulnerable to changes in climate, particularly those in climate
vulnerable sectors such as agriculture. Increasingly businesses
are starting to take weather and, to a lesser extent, climate change
into account in their business planning and climate services are
starting to be developed to address these needs. However, there
is a whole other area of climate service required by business.
Climate policies and the need to reduce greenhouse gas emis-
sions present both challenges and opportunities for business.
Businesses may be required, legally or morally, to reduce the
carbon footprint of their operations and climate services are
required to inform business of the most efficient and cost effective
ways of doing this. There are also opportunities for businesses to
innovate and to diversify into new markets created as a result of
the need to reduce greenhouse gas emissions.
The Low Carbon Growth Plan for Australia described below is an
example of a climate service to business and provides an analysis of how
Australia could reduce its greenhouse gas emissions at the
lowest cost and an examination of the barriers to achieving
these emissions reductions and how theymay be overcome.
What’s happening in Australia?
The centrepiece of Australian Government policy to
address greenhouse gas emissions is the Clean Energy
Future package, which represents a suite of legislative
measures including a price on carbon. The carbon price
package (introduced on 1 July 2012) will impact on the
business community in three ways:
• For businesses that are included in the emissions
trading scheme, every tonne emitted will require
a permit, whose value will be equal to the carbon
price in the year in which it is sold. These businesses
include power generators and large energy intensive
businesses.
• For businesses that can provide offsets (through the
Carbon Farming Initiative), every tonne of abatement
can earn a certificate which can then be sold to emit-
ters as equivalent to an emissions permit.
• For other businesses and individuals, the impact of
the carbon price will be experienced mostly through
an increase in electricity prices, passed on by elec-
tricity generators who need to buy permits for their
emissions. This provides an incentive to invest in
energy efficiency and cleaner technologies.
In order to deliver the required emission reductions, it is
critical that we harness the power of business and the ability
of the markets to develop innovative technologies and effi-
cient abatement solutions. To achieve this in the most cost
effective manner, decision makers require a framework
to understand where the lowest cost abatement opportu-
nities can be found, and which opportunities should be
prioritised in the short, medium and long term. In 2010,
ClimateWorks Australia developed the LowCarbonGrowth
Plan for Australia to fill this critical information gap.
What is the Low Carbon Growth Plan?
The Low Carbon Growth Plan for Australia identifies 62
opportunities to reduce Australia’s national emissions from
activities in energy efficiency, land and power. It found that
by 2020 Australia could reduce its greenhouse gas emis-
sions by 272 MtCO
2
e for a lower than expected cost. This
represented a reduction of 25 per cent below 2000 levels
1
.
E
nergy
The volume of abatement required against buinsess as usual
(BAU) projections
Source: ClimateWorks