Emissions trading won't hurt small business

The Rudd government’s proposed Carbon Pollution Reduction Scheme (CPRS) would not significantly impact most Australian businesses, according to a research report released by the National Centre for Sustainability (NCS).

The Swinburne University-based centre recently completed an industry study to model the potential financial impact a carbon price would have on businesses with fewer than 200 staff.

The authors found that under the scheme, the likely cost increase for these small-to-medium enterprises (SMEs) would be minor, flying in the face of the Opposition’s claims that it would be a ‘big new tax’.

According to study leader Scott McKenry, the price signal would, in fact, be lost against a background ‘noise’ of other cost increases.

“Under a CPRS, the likely cost increase for most businesses is really small. For some businesses we are talking a few hundred dollars a year,” he said.

“So claims that an emissions trading scheme would have a dramatic negative impact on small business owners simply cannot be substantiated.”

However, according to McKenry, this easy ride for small business owners is actually not a good thing.

“The problem with this is that the cost increase would be so minor for most businesses that it won't act as a strong driver for industry to modify its behaviour.

“This means we’ll be relying on organisational culture to drive businesses to become more sustainable. Businesses won’t do it as a cost incentive,” he said.

Despite this, the NCS still endorses the notion of a carbon price and trading scheme.

“We feel that an emissions trading scheme is the right mechanism to reduce Australia’s carbon footprint,” McKenry said.

“However, we believe it needs to go a lot further. In its current form, a 5% emissions reduction target and carbon price of $10 per tonne is not going to be enough to drive investor and consumer change.”

The NCS’s study included online surveys distributed randomly across Australia; surveys of participants within Swinburne’s accredited carbon accounting course; focus groups and interviews with carbon accountants; an analysis of the carbon footprints of over 170 businesses; and economic modelling of CPRS costs to SMEs.

The study was supported by Sensis and peer reviewed by Adjunct Professor Alan Pears AM. It can be accessed at:
http://www.swin.edu.au/ncs/documents/SP1323_NCS_ClimateChangefinal.pdf.