Are we ready for a low-carbon future?

Wednesday, 22 June 2011  Features

New analysis indicates that a carbon tax could turn investors and entrepreneurs into "accidental environmentalists" who will profit from investing in clean technologies, even though they have no particular ethical stance on the issue of green energy.

However Ben McNeil, a senior fellow at the Climate Change Research Centre at the University of New South Wales, believes there's a huge and growing gap between innovative firms and the laggards.

"All we hear about is the cost of the tax and that it will force us back to the dark ages, and that's the complete antithesis of what a carbon price is supposed to do," says McNeil. "It's designed to shift the economy into producing clean goods and services that the world will want in the longer term."

Ben McNeil says the inevitable short-term pain of adjusting to a carbon tax is no excuse for inaction. He says "Australia's inertia compares poorly to offshore carbon reduction activity in Europe, China and the US, where renewable energy capacity has outstripped fossil fuel growth for a number of years."

The majority of Australian firms believe a carbon price will benefit their business in some way, but half say they could be doing more, according to a survey by the Economist Intelligence Unit. These companies risk missing out on growth opportunities for products and services for a clean economy, estimated at two trillion dollars per year by 2020.

Ben McNeil adds "The doubters' argument that Australia should not bother with a carbon tax – since it emits only 1.5% of the world's carbon – misses the point. In just one year – in 2009 – China built 30% more carbon-neutral renewable energy capacity than all of Australia's coal-fired power stations. That's the largest investment in the world by far."

Read analysis with Ben McNeil in Pricing Carbon: The New Age of Accidental Environmentalism an article in Knowledge @ Australian School of Business.