Climate Exchange

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nergy

One fifth of the opportunities identified in the Low Carbon

Growth Plan (or 53 MtCO

e) generate a positive return for busi-

nesses, even after taking account of the upfront costs and before

factoring in the impact of carbon pricing (which will amplify

potential financial savings available through energy efficiency, for

example). By using resources more efficiently and thus reducing

input costs, many businesses will be able to achieve returns above

their cost of capital while at the same time reducing their green-

house gas emissions.

Despite the fact that many of the opportunities identified in the

Plan are profitable for investors, emission reduction opportunities are

often not implemented due to a range of financial and non-financial

barriers. These include project profitability, capital constraints, infor-

mation gaps and structural problems in the market that prevent the

opportunity from being captured. Importantly, the Plan articulates a

clear ‘roadmap’ with recommendations and strategies to overcome

these barriers which allows policy makers and opportunity owners to

compare different options and make informed decisions about where

to invest their time and resources.

Reducing GHG emissions can also provide additional growth

opportunities for businesses. As the world moves towards a low

carbon economy, demand for carbon-efficient products and serv-

ices will steadily increase, providing significant opportunities for

businesses that supply these, such as engineering and construction

companies and equipment and product manufacturers and install-

ers. The Low Carbon Growth Plan can provide insight for these

businesses about where potential business growth opportunities

may exist.

What action can businesses take?

Many of the profitable opportunities identified in the

Plan are concentrated in the built environment, transport

and industry. Opportunities from land-based activities

and power generation come at a moderate to high cost,

but may become profitable under Australia’s emissions

trading scheme, or through complementary measures

such as Government programs that support or incentiv-

ise the uptake of clean technology.

Businesses can expect significant financial benefits

through improving the energy efficiency of existing

buildings. Across all types of commercial buildings, the

most cost effective opportunity comes from reducing

energy waste, through actions such as reducing oversized

and unnecessary equipment and better management of

control systems. These often simple actions can reduce

energy use by an average of 10 per cent for a low upfront

cost of AU $4 per square metre of floor space. TThe Plan

also demonstrates that the installation of distributed

energy technologies – such as cogeneration – can be

expected to offer attractive financial savings with even a

modest carbon price.

Without further action, emissions from Australia’s

industrial activities are expected to grow by 40 per

cent between 2000 and 2020, driven largely by

growth in the mining and gas subsectors (extraction

and resource processing). However, many energy

efficiency opportunities in industry are financially

Source: ClimateWorks

A more detailed example of new opportunities that a low carbon economy can create for the chemical industry, especially in the basic materials and

products manufacturing sub-sectors