Any price set on carbon must be premised on a global agreement and also take into account all Australian businesses rather than just the largest carbon emitters, according to CPA Australia.
“A global agreement before the introduction of a carbon price in Australia is a must to ensure the competitiveness of Australian businesses and to ensure the effectiveness of the response to climate change,” Alex Malley, CEO of CPA Australia, said recently.
Any effective and sustainable action must also factor in the effect such a price would have on all Australian businesses, he added.
“The government’s current approach focuses largely on the 1000 or so largest emitters, and while their position is undoubtedly critical, there are 2 million other entities [which] will be fundamentally affected by a business environment where carbon emissions come at an increasing cost,” Malley said.
“Through the supply chain effect, the vast majority of businesses, regardless of size, will be affected despite not being directly liable under the proposed emissions trading scheme.”
While rewards for early action for emission-intensive activities are welcomed, he said it is critical that all businesses be given incentives to reduce their emissions in the lead up to the introduction of such a scheme.
Ahead of the upcoming federal election, CPA Australia recommended the government consider a 200 per cent deduction under the existing R&D tax concession or an equivalent 60 per cent tax credit fully refundable for R&D into new or improved low emissions and carbon capture and storage technology.
CPA Australia also recommended accelerated depreciation for capital expenditure on replacing or upgrading existing plant and equipment with lower emissions technology, as well as an upfront investment allowance of 20 per cent for capital expenditure on low emissions technology.
“These measures are not dependent on the start of a carbon price and should proceed regardless,” said Malley, who added that business certainty was crucial in any successful response.
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