Wait-and-see approach could cost big business

A SIGNIFICANT number of liable companies remain unaware of the emissions trading scheme's potential impact on their business, according to GHD global climate change response services leader Chris Lund.

"There are companies that are on top of it, have been for a very long time, a lot of those are in WA," Dr Lund told the forum.

"There are other companies that have been waiting, hoping it would go away or waiting for the rules to settle down enough to try and work out what to do. In this sense, WA is likely to be impacted more so than other states, because of our heavily intensive industries particularly, and a lot of those are trade exposed."

Dr Lund believes many companies, including those in the energy intensive trade-exposed area, are waiting on clarification on the design of the scheme, particularly with regard to the free allocation of permits.

"There still are some issues. Alcoa is a good example of that, around competitors internationally, and we're waiting to see how that sorts itself out," Dr Lund said.

"A lot of companies understand this is a change, it has to happen at some point and they're just getting their systems in place and are getting ready for it and are articulating to government what the issues are around that particular industry."

In addition to the direct impacts, Dr Lund believes there is not a wide understanding of the indirect impacts of the scheme.

These include indirect costs, including electricity and other input costs, as well as issues concerning supply chain management, pass-through costs, contracts and legal issues.

"A significant amount of businesses do not understand what is coming in terms of the direct issues, in terms of need to measure carbon emissions and exposure to carbon trading; but the indirect costs that are going to flow down to them through the economy...they haven't factored that in either."

He said the government should be doing more to assist the supporting infrastructure and knowledge of the numerous consultants behind the new trading system.

"You've got such a major shift in 18 months. Who's going to help people do all their accounting, who's going to help people look at the technologies, who's going to install the stuff that comes in?" Dr Lund said.