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What do businesses think about the Emissions Reduction Fund?

Emissions target scheme welcomed by australian businesses 171 87665 0 14065522 300

The government has revealed it will be joining forces with the Palmer United Party to secure the Emissions Reduction Fund and the targets it intends to reach.

This has the potential to impact businesses up and down the country, but one group believes it could be in their best interests that this decision has been made.

What is the Emissions Reduction Fund?

The Emissions Reduction Fund was implemented with one goal in mind - bringing down growth in Australia's carbon emissions.

So far, this has been achieved in various ways, ranging from energy labelling on consumer products right through to stricter environmental building standards.

Earlier this year on June 18, the government presented a bill to parliament to embed the Emissions Reduction Fund in legislation.

As a result, the Carbon Farming Initiative Amendment Bill 2014 was born and will now encompass the Carbon Credits (Carbon Farming Initiative) Act 2011.

Are businesses on board?

The Australian Chamber of Commerce and Industry (ACCI) explained how companies are in some respects lacking in direction when it comes to lowering emissions, which is making compliance difficult.

It pointed out how there isn't a global emissions trading model to refer to, which could prove useful in giving firms the incentives they need to bring down their emissions.

The Emissions Reduction Fund therefore has the potential to enhance how companies make a difference, providing it is implemented in the right way.

The ACCI suggested it could give a long-term solution for lowering greenhouse gas emissions - and potentially electricity bills - but only if the impacted industries are taken into account.

Andrew Grant, a board member of the Carbon Market Institute, told the ABC how this scheme will create greater certainty for businesses because of the long-term contracts it offers.

"It's a positive policy. It will lead to more investments, there's no doubt about that," commented Mr Grant.

What about an emissions trading scheme?

The ACCI has been quick to play down the need for an emissions trading scheme, which it believes could lead to unnecessary costs being imposed on companies.

ACCI Director of Economics and Industry Policy John Osborn suggested it is not only economic reasons that are getting in the way of such a scheme being rolled out.

"There is a very real risk of carbon leakage and net environment harm if all we do is push emissions offshore," he explained.

However, the group is keen to see Australia make the most of cost savings wherever they may lie - even if this means considering overseas involvement.

Posted by Richard West