Business executives plan to push Pacific Rim leaders to create carbon emissions pricing system

Sep 5, 2007 - Malcolm Foster - The Associated Press

SYDNEY, Australia - Pacific Rim business leaders say governments must make polluting more costly to businesses and make investing in expensive energy-efficient technologies more attractive if they want to reduce global warming.

The business leaders are planning to suggest that the politicians gathered here for a summit of the Asia Pacific Economic Cooperation forum should attach a price to carbon emissions, said Mark Johnson, chairman of AGL Energy Ltd., an energy retailer, and head of a business advisory council to APEC leaders. It would be up to individual countries to adopt their own systems.

"Business is going to have to change its behavior in the way it uses energy and how it invests in new technology," Johnson said Monday. "For that to happen, we need price signals" that would motivate companies to change their behavior.

"That is the essence of the climate change debate: to pollute it will cost you X," he said.

APEC's 21 members are grappling with how to address climate change. Australia moved the issue to the top of the agenda after it barely got a mention last year; finding common ground on the thorny topic has proved difficult.

For businesses in Australia, finding a predictable, practical solution is urgent. In the absence of federal government regulation, Australian states were coming up with their own sometimes conflicting rules.

Businesses felt adrift, with "a lack of knowledge about what might be a long-term national policy" on climate change, said Maria Tarrant, director of policy at the advisory council.

In April, the Business Council of Australia, which represents Australia's 100 largest companies, including mining giants BHP Billiton Ltd. and Rio Tinto Ltd., got involved, calling on the federal government to adopt a centralized carbon emissions trading scheme.

That regional businesses are clamoring for government help represents a sea-change in business attitudes about global warming, environmental groups and other observers said.

"It's enormously significant," said Paul Toni, program leader, development and sustainabilty at WWF-Australia. "You're not going to drive change until you pay for the pollution."

Carbon credits have been traded in Europe since 2005. Under the system, governments set a limit for the amount of carbon dioxide that major polluters such as coal-fired power plants and steel makers could emit, while letting them buy and sell CO2 emission allowances.

This system encourages factories and industries to cut emissions because they can make money by selling surplus permits if they release less greenhouse gas. Companies that make no effort to reduce emissions pay the price because they have to buy extra allowances or face fines.

___ AP Writers Meraiah Foley and Rod McGuirk in Sydney and Aoife White in Brussels contributed to this report.