With the carbon price coming into play this weekend, and the political circus surrounding it, it’s time to remind people about why we need a price on carbon. Our sister company Impact Sustainability's Hayley Morris and Heidi Ireland, talks us through it...
Let's first examine the real cost of externalities. Defined as a consequence of an industrial or commercial activity that affects other parties without being reflected in the cost, externalities by nature are market failures. For example, the price of a product does not take into account the economic cost associated with the environmental issues created by mining the item’s materials, the cost of managing landfill sites and the toxic chemicals that are leached into our soils,etc.
More relevant to this argument is that we don’t ‘see’ the monetary cost of emitting greenhouse gasses. We do, however, see the escalating societal costs associated with greenhouse gasses, such as the clean up and rebuild resulting from the impacts of climate change through droughts, floods and cyclones. As a result, we’ve ended up paying after the fact through taxes and levies, such as the flood levy.
Enter the carbon price. Pricing carbon internalises the environmental impact in the price of the good or service with the flow-on effect being people will think more about their consumption of carbon-intensive goods and services and seek to reduce them. With electricity, this means fossil fuels become more expensive and renewable energy starts to become cheaper in comparison.
A huge part of the debate has been on the effect the carbon price will have on businesses and the economy, at a time already characterised as economically difficult. The reality is there’s never a good time for cost increases, but now is the time to take action.
The EU has had a carbon trading market in place since 2005. China, the scapegoat for all action, is leading the way in clean technology and has stronger emission reduction goals than Australia. So, while the rest of the world is moving away from coal and fossil fuels, political and industry opponents of the carbon price are fighting hard to protect them.
This position sets us up for economic failure in the long term. Ironically, it’s the environmentalists who are acting in the interest of our economy.
So, how can businesses reduce the impact the carbon price is going to have on them? It’s often said that you can’t manage what you don’t measure, so a management system for measuring environmental impact is fundamental to identifying areas where you can improve efficiencies and ultimately save on costs. Impact Sustainability’s Impact Management System does just that and it’s free for any business looking to start measuring energy, water and waste for one location. Through a commitment to operate more efficiently, you will in turn reduce your environmental impact and save on costs.
To find out more about how Impact Sustainability and their Impact Management System can benefit your business, go to www.impactsustainability.com.au. You can also follow them on Facebook and Twitter for organisational tips and other news.