Effects of the Trading Scheme on the wider
community
The implementation of the Scheme will certainly affect
individuals as well as Industries. The implementation of
emission trading schemes world wide is expected to
disrupt some industries and will inevitably cause
intense competition resulting in reduction of profit
margins as costs may not be able to be passed on to
consumers.
With the increase in costs and reduction in profits
experienced by Industry, it is expected the community at
large will experience countless job losses through
relocation of businesses to low polluting countries in
order to avoid compliance.
To mitigate hardship on the communities and industry the
government will also be forced to provide substantial
financial assistance toward retraining for entire
communities to cope with the massive number of job lost.
There are already reports by financial analysts
evaluating significant company profit write downs of
certain heavy polluting businesses. Companies who do not
have the strategy or means to deal with the ETS will be
severely punished by the market discounting their share
prices.
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Carbon Credit Trading with the rest of the World
Industrialized countries are struggling to meet the
Kyoto Protocol set targets because the cost of reducing
Carbon Dioxide (CO2) is in the order of $AUD500 for
every tonne of reduction of CO2, in contrast to $AUD25
per tonne for developing countries.
The developing countries emission levels are
substantially below the target fixed by the Protocol.
Consequently, the developing countries are permitted to
sell their surplus credits to the industrialized
countries.
Furthermore, companies in the industrialized countries
who are unable to meet their targets can buy credits
from companies that have surplus credits from developing
countries.
There are reports that the sale and trading of Carbon
Credits is a new global commodities market with more
than €145 billon in present day value. |
