Prof. Rachmat Witoelar - Executive Chair of the National Council of Climate Change (Dewan Nasional Perubahan Iklim - DNPI) / President's Special Envoy for Climate Change, today announced the launch of Indonesian Carbon Management Association (ICMA) or Asosiasi Pengelola Karbon Indonesia (APKI) during Carbon Neutral Golf Tournament held in Damai Indah Golf, Partai Indah Kapuk, Jakarta. The ICMA was established on 6 October 2011 as the first association of parties involved in carbon management businesses in Indonesia. The head of ICMA is Paul Butar Butar from South Pole Ltd.
Somany reasons why i enjoy doing my PhD study at my school - School of Commerce, University of South Australia (UniSA). While doing research here requires a high commitment and hard works, fun and laughter are around to make it enjoyable. For instance, here are the songs presented by Prof Rick Sarre, Prof. Janek Ratnatunga and Assoc. Prof. Margaret Lightbodyfor all researchers. Hope you like it.
This is a brief summary about my jointly-written research paper on Green House Gases (GHGs) emissions reporting, with my supervisors - Michaela Rankin and Carolyn Windsor - when I did my Master degree in Monash University. We examined voluntary corporate GHGs emissions disclosures in the absence of public policy regarding climate change in Australia. My video presentation is as follows:
PURPOSE
Our study looked at the determinants of voluntary GHGs emissions disclosures by Australian firms. In particular, we aimed to investigate two main points: (1) factors that associate with the Australian firms’ decision to provide voluntary (GHGs) emissions reporting in 2007; and (2) for those disclosing firms, factors that relate to the extent and credibility of corporate voluntary (GHGs) emissions reporting.
Institutional governance theory is introduced here to explain proactive corporate response to climate change in the Australian context. This theory is used to examine the hypothesised links between voluntary emissions reporting, internal governance systems and private regulations that guide GHGs emissions disclosures from external parties.
METHOD
We studied GHGs emissions disclosure in a voluntary setting in 2007. It is a point in time when global warming and climate change risks are acknowledged on the international stage as a crucial issue for corporations, and when a cap and trade scheme had been proposed in Australia, but before any mandatory reporting of corporate GHGs emissions was required in Australia.
Since the first July of 2008, Australian firms that meet certain thresholds, have to report their GHGs emissions and energy use to a government agency.
The sample includes all of the top 300 firms listed in Australian Securities Exchange (ASX).
Initially, we collected 295 firms that were recorded in the ASX300 as at 26 August 2008. But then we decided to study 187 firms as the final sample because the rest of them did not meet all testing requirements in our models.
We used a two-stage approach to test two different models.
First, we want to investigate the propensity to disclose emissions for ASX 300 firms as the sample. The first model includes both internal and external factors that relate to decision to provide or not provide voluntary GHGs disclosure.
Therefore, we use binary-choice logistic regression to test 187 firms that have all testing requirements.
Then we proceed to the next one.
The second model is to test whether the internal organisational systems and the external factors that are likely to impact on voluntary emissions disclosure, also relate to the extent and credibility of disclosures.
To measure the extent and credibility of emissions disclosures we designed an index based on the guidance provided in ISO 14064, part 1.
It is a standard that details guidance on what should be included in a publicly available GHGs report.
We use an OLS (Ordinary-Least Squares) regression to test this more complex measure on a sub-sample of 80 disclosing firms as the dependent variables.
FINDINGS
Interestingly, we find evidence that 80 firms out of 187 Australian firms that we analysed, that is around 43%, provided voluntary GHGs emissions reports for the year 2007. That was before the Government required them to report this information to a government agency starting from 2008. They disclosed emissions information in their annual reports, and or stand-alone sustainability disclosures.
Firms are more likely to present voluntary (GHGs) emissions disclosures when they have an Environmental Management System (EMS) in place, either certified or uncertified, have stronger governance systems, make publicly available disclosures to the CDP (Carbon Disclosure Project), are larger in size, and operate in either the energy and mining, or industrial sector.
When we evaluate the extent and credibility of disclosures by the sub-sample of 80 disclosing firms, we find that they are more likely to have an EMS that is ISO14001-certified, use the Global Reporting Initiative (GRI) to guide their sustainability disclosures, and disclose to the CDP with those disclosures being publicly available. Firms that provide more credible emissions disclosures also tend to be larger and operate within the energy and mining, industrial, or services sectors.
CONCLUDING REMARKS
We find evidence of Australian firms’ willingness to move to a carbon-low future in the absence of public policy.
These proactive companies have implemented organisational systems, but also have relied on external private guidance provided by GDP & GRI to publicly disclose their responses to climate change risks, including GHGs emissions data.
AAAJ
For more details about this research, the article is available in the recently released edition of AAAJ, Accounting, Auditing, and Accountability Journal in November 2011, volume 24 number 8 - which is a special issue on climate change & greenhouse gas - pages 1037-1070.
Prof. Lee Parker
when crowned as Supervisor of the Year 2011
in Division of Business, Univ. of South Australia
Lee read this nice story when he delivered a plenary speech in the 23rd CSEAR International Congress on Social and Environmental Accounting Research in St. Andrews University, Scotland, on 7-9 September 2011. Thanks Lee for sharing this. It was one of the most discussed topics amongst many audiences during the conference, including me!
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All I Ever Really Needed to Know I Learned in Kindergarten
by Robert Fulghum
Most of what I really need to know about how to live, what to do, and how to be I learned in kindergarten. Wisdom was not at the top of the graduate school mountain, but there in the sandbox at nursery school.
These are the things I learned:
Share everything. Play fair. Don't hit people. Put things back where you found them. Clean up your own mess. Don't take things that aren't yours. Say you're sorry when you hurt somebody.
Wash your hands before you eat. Flush. Warm milk and cookies are good for you. Live a balanced of life. Learn some and think some and draw and paint and sing and dance and play and work every day some.
Take a nap every afternoon
Take a nap every afternoon.
When you go out into the world, watch for traffic, hold hands, and stick together. Be aware of wonder.
Remember the little seed in the plastic cup. The roots go down and the plant goes up and nobody really knows how or why, but we are all like that...
And then remember about Dick and Jane and the first word you learned, the biggest words of all - LOOK. Everything you need to know is in there somewhere. The Golden Rule and love and basic sanitation. Ecology and politics and sane living.
Let's hold hands for a better world
Think of what a better world it would be if we all - the whole world - had cookies and milk about 3 o'clock every afternoon and then lay down with our blankets for a nap.
Or if we had a basic policy in our nation, and other nations, to always put things back where we found them and clean up our own messes.
And it is still true, no matter how old you are, when you go out into the world, it is best to hold hands and stick together.
The Australian Government’s Climate Change Plan: Securing Clean Energy Future was released on 10 July 2011. The Plan includes four main actions: putting a price tag on carbon pollution, driving innovation in renewable energy, improving energy efficiency, and creating climate-friendly opportunities on the land. Imposing a carbon price to big polluters is the central strategy. The key designs are as follow.
Carbon Price
CARBON PRICE MECHANISM
To start off from 1 July 2011
It will be charged on around 500 heavy polluters which emitting at least 25ktCO2e direct green house gases (excluding emissions from transport fuels)
The scheme coverage: emissions stationary energy, industrial processes, fugitive emissions (other than from decommissioned coal mines) and emissions from non-legacy waste. Agriculture will be excluded from the scheme. It will be covered by other Government measure called the Carbon Farming Initiative.
It will be delivered in two phases: fixed carbon price for the first 3 years, followed by a floating price though a cap-and-trade emissions trading scheme (ETS)
Phase 1 – Fixed Carbon Price – commencing on 1 July 2011
oCarbon tax per tCO2e (tonne CO2 equivalent) = an initial price $23 rising by 2.5% p.a. in real terms, assuming 2.5% inflation p.a = $23 in 2012, $24.15 in 2013, and $25.40 in 2014
oLiable entities have to buy emissions permits from the Government at fixed price which will be automatically surrendered for that compliance year.
oThese fixed price permits are non-tradable and not bankable for future use.
oPenalties for any shortfall: 1.3 X the fixed price for permits = $29.90 for 2012-13, $31.40 for 2013-14, and $33.00 for 2014-15
Phase 2 – Floating Carbon Price – commencing on 1 July 2015
oThere will be pollution caps for each year
oPollution caps for years 2015-2019 will be announced on 31 May 2014
oThe price ceiling and floor will be set for the first three years of the flexible period, 2015-17
oThe price ceiling will be set $20 higher than the estimated international carbon price on 1 July 2015, rising by 5% in real terms per year
oThe price floor will be set $15 initially, rising by 4% in real terms per year.
oPenalties for any shortfall: double the average price of permits for the relevant year
oIt will be linked to international carbon market since the first year of operation
PLANNED ASSISTANCE FOR BUSINESSES
Jobs and Competitiveness Program to assist emissions-intensive trade-exposed industries, e.g. for the most emissions intensive industries – aluminium, steel, zinc, pulp and paper makers – will be allocated free permits representing 94.5% of industry average carbon costs, reducing by 1.3% p.a. This industry will be allocated $9.2bn by 2014-15 to assist the transition to the flexible price period.
Clean Technology Program with $1.2 bn for investments on innovation across manufacturing industries.
Energy Security Fund, including payment to phase out around 2,000 MW of highly polluted coal-fired generators by 2020.
Small businesses: increase in instant asset write-off thresholds to $6,500
Clean Energy Finance Corporation - $10bn to be invested in renewable energy and low polluting technologies.
Australian Renewable Energy Agency (ARENA) – to administer $3.2bn for R&D and commercialisation of renewable energy.
ESTIMATED IMPACTS OF CARBON PRICE ON HOUSEHOLDS
Big polluters that must pay carbon prices will likely pass these carbon costs on to customers. It was predicted that it will increase living costs by 0.7% - on average, electricity will rise by $3.30/week, gas by $1.50/week and food expenses by 80c/week. Average costs will increase $9.90/week or $515/year.
PROPOSED ASSISTANCE FOR HOUSEHOLDS
Average assistance rate for most households: $10.10/week or $525/year.
Tax-free thresholds will increase to $18,200 from 1 July 2012, then to $14,900 from 1 July 2015
At a glance, the Australian climate policy looks similar to EU ETS climate policy landscape to me. The EU charges polluters a carbon price through ETS and demands higher level of renewable energy and energy efficiency. The first three years of fixed price period in Australia resembles a pilot phase in EU ETS – from 2005 to 2007 - which mainly serves as a transition period to the more stringent rules of ETS.
The obvious difference is that the Australian climate policy appears to be better designed to charge polluters since the beginning of policy implementation compared to the EU’s. For phase 1 of the EU ETS, 95% of European Union Allowances (EUAs) – the permit to emit one tonne CO2 equivalent gas during a specified period – are allocated free (termed grandfathered) to liable entities. In contrast, the Australian policy is going to really charge polluters with a carbon price, which I think will encourage businesses to alter business-as-usual operations to become more carbon conscious.
It is clear that Australian businesses need to start factoring in the impacts of future carbon prices. Not only liable entities that directly covered under the carbon price scheme, but industries outside the scheme will also be affected by carbon price through increased electricity prices transferred along the input supply chain.
All in all, this is a progressive step into our sustainable future. I think the Plan opens up lots of opportunities for both individuals and businesses. Let’s start carbonvestmens... It can be simply started off from investing carbon conscious into our daily activities, such as carbon mindful in using electronic equipments at home and at workplace J
Yesterday, the Australian PM, Julia Gillard, announced the architecture of carbon price policy to commence next year.
The blue print set out a hybrid scheme, with a carbon tax starting from 1 July 2012, converting to a cap-and-trade emissions trading scheme (ETS) in three or five years. Media reported that many complaints has been directed to Gillard as to her election campaign commitment last year: "There will be no carbon tax under the government I lead". There have been interesting debate afterwards regarding how Gillard will make them dancing to her tune. Broken promise or not, the government revealed that attaching price tag on pollution is back on the national primary agenda.
The proposed carbon policy will impose a fixed price that will gradually increase at a pre-set rate for a period of three or up to five years from 2012. At the end of fixed price period, two options will be considered: either to shift to a flexible carbon price that can be linked to international carbon market, OR to defer the transition to carbon price by continue applying a fixed price with adjusted price level and rate. The decision to execute the deferral option of floating carbon price depends upon the impact of carbon price on Australian economy and on carbon emissions reduction, as well as the state of international emissions target and international carbon market.
The carbon price will charge emissions from electricity generators, transport, industry, fugitive emissions from mining as well as waste. It will not hit the agriculture sector due to the complexity of counting agricultural emissions. The dollars of polluting the atmosphere will be used to compensate households and businesses, and funding renewable energy programs. However, the starting carbon price and the assistance measures for both households and businesses are still in the discussions agenda of the Multi-Party Climate Change Committee (MPCCC). The pricing scheme expected to passage its legislation by the end of the year, to come into operation on 1 July 2012.
In theory, putting a price on carbon pollution offers incentives to conduct cleaner businesses. The more emitting carbon pollution simply means the more costly the carbon compliance costs. Looking through a 'business spectacle', the indications of the starting level of carbon price and the forward curve, also the clarity of the transition measures and business compensations are essential for decision making, especially for long-term investments. The details of the interim measures, i.e. the transition rules from fixed to flexible carbon price mechanisms, can be translated into targets to be achieved in adjusting to a low-carbon economy while maintaining business competitiveness.
What is a carbon price? It is a charge to those who pollute, either through a carbon tax or an emissions trading scheme (ETS). The carbon tax gives certainty about the carbon price, but uncertainty about the emissions reduction. Whereas the ETS offers certainty about the emissions cut, with uncertainty about the carbon price.
The Australian government has planned to use an ETS, the so-called Carbon Pollution Reduction Scheme (CPRS), as a market mechanism in transition to a low-carbon economy. The CPRS, which was originally planned to start on July 1, 2010, has now been shelved until 2013. The legislation to implement the CPRS was defeated in the Australian Parliament three times, in August and December 2009, as well as early last year. The Greens rejected the CPRS bill as it set out too low emissions target and too much compensation to the coal and power industries.
As reported by news, carbon price is back on the table. Prime Minister Julia Gillard announced to deliver a fixed price on carbon emissions starting from July 1, 2012, for around three or four years. Putting a price on carbon will then move to an ETS after 2015 or 2016.
This climate action to involving a broad range of industry via a carbon price is crucial for Australia commitment to achieve its ambitious target of 25% emissions reduction on 2000 level by 2020. Otherwise, as highlighted in the latest emissions projection report for Australia which was released by the Minister for Climate Change and Energy Efficiency yesterday, Australia's emissions will continue to rise on a business-as-usual (BAU) projection without further policy action.
