Business Wants Emissions Certainty

Business needs “policy and regulatory certainty” on emissions trading, the Business Council of Australia said this week following the Senate’s rejection of the Rudd Government’s controversial Carbon Pollution Reduction Scheme (CPRS).

Felicity Williams in The Australian/Herald Sun (2 December 2009):

The political wrangling over the ETS is bad for business, the Business Council of Australia has warned.

Business needs “policy and regulatory certainty” on emissions trading, the Business Council of Australia said this week following the Senate’s rejection of the Rudd Government’s controversial scheme.

 BCA president Graham Bradley, who supported the failed emissions trading scheme backed by ousted Opposition Leader Malcolm Turnbull and Prime Minister Kevin Rudd, vowed to keep working with both sides of politics “despite recent developments”.

“For business to make the necessary investments to enable this transition it must have regulatory and policy certainty,” he said.

“These policies must enable emissions reductions to be achieved at least cost to the economy, maintain the reliability and viability of the domestic electricity industry, and maintain the competitiveness of Australia’s industries in the absence of a global price on carbon.”

The Senate struck down the proposed ETS legislation yesterday by an eight-vote majority, ending – for the time being at least – the Rudd Government’s plans for a market-based mechanism to cut the nation’s carbon pollution.

However, Deputy Prime Minister Julia Gillard indicated the government would try again to win Senate approval for the scheme in February.

Credit Suisse analyst Michael Slifirski said yesterday the defeat of the ETS has helped Australia’s steel-makers, Bluescope Steel and Onesteel, to avoid downgrades to their share price valuations.

“I guess the extent of the downgrade would have been dependent on the extent of carbon exposure,” he said.

“It is a company-specific thing, but steel-making is carbon-intensive.

“The steel guys would have been significantly impacted.”

Bluescope and Onesteel gained almost 3 per cent and 2 per cent respectively by the close of trading on the Australian Securities Exchange yesterday.

Mr Slifirski said the impact of the ETS on the steelmakers was more of a long-term issue for investors and was not expected to affect the companies’ short-term earnings.

“It is not over yet and companies are pretty conservative, but certainly there would have been a bit of relief in the short-term anyway,” he said.

Source: www.heraldsun.com.au