ETS - will it arrive and what will it look like?

Discussion Leader's Argument:

Disclaimer

There is ongoing uncertainty about when we will have an emissions trading scheme (ETS) in Australia and what it will look like. Many companies in the Australian market have a good understanding of their exposure to the potential risks and opportunities presented by a scheme; however the investor opinion largely goes unheard.

1. What are your views on the necessity for a market based carbon pollution mechanism? If in favour what would your preferred market based mechanism be?

2. Please rate on a scale of 1 - 10 (1 is very low; 10 is very high) how optimistic you are for a market based carbon pollution reduction mechanism to be in place by 2013?

3. On the same scale by 2015?

4. In the absence of a scheme, what is the level of time you spend considering carbon and climate change issues (same scale)?

5. What would you need to see from Government to make the issues more material for your business?

Relevant Articles:

Client Page Member Comments

Equity Sales (Investment Banking Client Page Member)
Although it does seem an inevitabilty, it is necessary that it doesn\'t leave Australia disadvantaged in relation to other countries economically. We must see that others are also tackling the problem. 2. 3 3. 6 4. 3 5. Government has to prove to all that each country is also being responsible for their emissions and that we also need to be part of the scheme as our responsibilty.
Executive Director (Investment Banking Client Page Member)
1. reducing carbon emissions is probably a good idea, but don\'t really see the need for a market based mechanism. We just need common sense to use less carbon. Don\'t agree with the ETS. 2. 1 3. 1 4. 1 5. Need to see a clear, simple plan that makes sense. If we want to reduce carbon we should be encouraging more environmentally friendly industries such as wind, solar, geothermal and hydro etc with subsidies for example.
Institutional Equities Dealer (Investment Banking Client Page Member)
1. Need a mechanism, but the rest of the world should go first as we contribute such a small proportion of global carbon. 2. 1 3. 3 4. 1 5. Legislation
Equity Research (Institutional Client Page Member)
1. Necessary, prefer market based. 2. 1 3. 6 4. Minimal 5. Concrete proposals, timelines to action
Executive Director (Investment Banking Client Page Member)
1. assuming that climate change will happen, then i think it is necessary to put a price on carbon to force change. whether it is good for the economy is the issue? 2.1 3.1 4.5 5.I would assume that an official market will be formed to trade carbon credits, this causes issues if the basis is not worked out properly. Personally i don\'t think carbon credits should be tradable on a retail level.
Managing Director (Investment Banking Client Page Member)
1. Reducing carbon emisisons is a noble cause, agreed. There is no doubt that greenhouse gases are more than likely causing global warming and so all efforts to make a meaningful contribution to a reduction of global carbon emissions is the right thing to do. But if Australia alone takes steps to start taxing itself on carbon, all this is going to achieve is all of us paying double what we currently do for our electricity, and as a consequence of that sudden rise in our cost of energy, all of our exports surely will become far less competitive on the world markets, and sadly this will see people lose their jobs. Unless the Australian Government can tell the Australian people that China and the USA will also put the same price deterrant on carbon, that sees their emissions drop, and their domestic cost structures impacted as well, then all we are doing in Australia by introducing a carbon tax is lining ourselves up for higher power bills, and people losing jobs. 2. 1 3. 1 4. 5 5. Lobbying China & the US HARD to get their act together!
Executive (Investment Banking Client Page Member)
1. I do not believe it is necessary - rational science does not support man made climate change. Reduction of pollution is very important - but our efforts should be directed to such things as Consumerism (packaging, food waste), sustainable residential construction and water conservation. I have a dream that one day there are no plastic bags! 2. 2 3. 4 4. 8 - as an opponent current views. 5. Not Applicable
Equities Analyst (Investment Banking Client Page Member)
I reckon you can\'t answer those questions until we know who gets into power. Could be totally different ratings if the Greens get a seat at the grown ups table.
Equity Sales (Investment Banking Client Page Member)
1. rubbish and it will result in is transferring jobs offshore 2. 2 3. 4 4. 1 5. introduce a carbon tax ..that will effect everyone\'s business
CFO (Corporate Client Page Member)
1.I am a bit of a greenie and personally agree that carbon emissions/greenhouse gases are contributing to climate change. The subject is difficult as Australia will have little impact acting alone. Someone has to lead but our collective affluent cost base and laid back attitude has already made Australia an expensive to produce. To get the G20 countries to act in unison is almost impossible - they can\'t agree on other urgent issues. Even if they do, from my own business travel experience, developing countries like India, Vietnam and China are bigger polluters and their economies are not sufficiently developed to introduce an ETS. In NZ, the measure has proven inflationary, giving their government the difficult situation of an inflationary tax which inevitably impacts on interest rates - at a time of low consumer confidence and affordability. 2, 1 3, 1 4, 6 5, acting in concert with a smaller group than at Copenhagen but including industrialised nations from G20, India, China and Brazil
Principal (Institutional Client Page Member)
1. Mechanism good idea. Keen to hear more ideas for best market mechanism. 2. 5 3. 5 4. 1 5. Legislate a mechanism.
Investment Analyst (Institutional Client Page Member)
1.A market based mechanism is necessary. Using the market is far more efficient and effective than a non-market approach and more flexible. An ETS has the massive advantage of limiting quantity (which is the issue we need to control), whereas the next best market mechanism - tax - targets price. A lot less precise! Also, a tax requires a political decision to increase the tax each year - not going to happen. 2. 1 3. 10 4. 3 5. A carbon price ASAP so we catch up witht the rest of the world - many states in the US already have one, China has committed to one just last month, the whole EU have one, NZ have one and Japan are committed to one. We\'re on the outer with Canada and Russia.
Fund Manager (Institutional Client Page Member)
1. A market based mechanism is most appropriate as pollution is a cost to society and the companies causing the polution should pay that cost.While an ETS works better in theory a tax might work better in practice. 2. 3 3. 7 4. 4 5. Legislation
CEO (Corporate Client Page Member)
1. Needed as one tool, there are many others that are more direct. Should be broad based to ensure it changes behaviours rather than shifts costs. 2.3 3.6 4.2 5.A position.

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