What does the carbon price mean for Monash?
Many of you will have heard of the carbon price recently introduced by the Federal Government as part of a Clean Energy legislative package. The carbon price is one part of an overall plan that also aims to promote innovation and investment in renewable energy, encourage energy efficiency and create opportunities in the land sector to cut pollution.
Around 500 of the businesses that operate large facilities in Australia with scope 1 emissions of more than 25,000 tonnes CO2-e each year will be required to pay for their emissions under the carbon pricing mechanism, commencing on 1 July 2012. These organisations will need to buy and surrender a permit for every tonne of carbon pollution they produce. For the first three years the cost of each permit (the carbon price) will be fixed, starting at $23 per tonne and rising by 2.5 per cent a year in real terms. From 1 July 2015, an emissions trading scheme will operate and the price will be set by the market. Under the emissions trading scheme, the number of permits issued by the Government each year will be limited to enable Australia to meet its target of a decrease in carbon emissions of least five per cent compared with 2000 levels by 2020. Businesses that can decrease their greenhouse gas emissions will, therefore, pay less, driving innovation and energy efficiency.
Approximately 60 per cent of Australia’s carbon emissions will be covered by the carbon price, including emissions from electricity generation, stationary energy2, some business transport, waste, industrial processes, and fugitive emissions3. The carbon price will not apply to agricultural emissions or emissions from light on-road vehicles.
Households, small businesses and other organisations such as Monash will have no direct obligations under the carbon price. Monash's scope 1 emissions that are covered by this scheme arise from the use of natural gas for heating and cooling and in laboratories. However, natural gas retailers will be responsible for the emissions from the use of natural gas by their customers, which means that Monash will not have a liability under the carbon pricing mechanism.
It is expected that electricity and gas retailers will pass on the carbon price to their customers, leading to rises in prices. As a large electricity and gas user, Monash can expect, therefore to pay more for these utilities in the future.
- Scope 1 emissions are direct emissions that are produced from sources within the boundary of an organisation as a result of that organisation’s activities.
- Stationary energy includes emissions from fuel consumption for electricity generation, fuels consumed in the manufacturing, construction and commercial sectors, and other sources like domestic heating.
- Fugitive emissions are substances which escape to air, such as leaks from mines or equipment.
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