The document discusses carbon management issues for local governments in Australia. It outlines how the carbon price impacts over 250 organizations, including many landfills and council sites. While $300 million in grants have been provided, there are also cost of living pressures on ratepayers. Effective carbon management requires understanding direct and indirect carbon costs, eligible funding, and developing communication plans. Planning needs to consider inputs, outputs, and impacts over the short, medium, and long term while also addressing uncertainty around climate change politics. Global frameworks like Rio+20 also provide opportunities for knowledge sharing between local governments.

1. CARBON MANAGEMENT &
LOCAL GOVERNMENT
Deakin University Centre for Sustainable and
Responsible Organisations
Carbon Management Public Seminar, Local Government and Related
issues, Melbourne 16th July 2012
Matthew Tukaki, CEO
The Sustain Group

2. Contents of this PP
1. Setting
the scene and some
carbon price context
2. What are some of the
challenges ahead and what is
the latest in research telling
us? Will this thing be thrown
out? 3. What does an effective
carbon management
framework look like? What
are some of the
opportunities?
4. What do global frameworks
mean for Local Government?
Rio+20
Hopefully by the end you
have learnt something new!
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3. Deakin University / CSaRO
1. SETTING THE SCENE

4. The basics…
 The carbon price will ultimately impacts up to 500 companies, organisations and sites across
Australia
 It was estimated that 130 may be council sites or operated facilities / although the total liable
is currently sitting at 250 organisations
 A large number of landfill’s over 25,000 tonne
 The price has started at $23 per tonne
 $200 million has been provided as grants through the $200 million Community Energy
Efficiency Program (CEEP) (local councils and community based organisations
 $100 million Low Income Energy Efficiency Program t help in trials of new energy efficiency
technologies and approaches in low income households
 Large potential to consider the newly announced Carbon Farming Initiative
 Cost of living pressures across the rate payer base
There is no doubt that a carbon
price is and will have impacts on
cost of living which has flow in
effects across supply chains
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5. Explanation of carbon pass through
Direct Cost Pass Through in reference to carbon pricing is defined, for the purposes of this
presentation, as a cost that is imposed on a supplier as a result of the Australian Governments
carbon pricing mechanism. This cost, potentially less any compensation that has been applied to
that supplier or that sector, may be subtracted before a cost increase is passed through the supply
chain and directly onto a client. There is no specific requirement that any compensation passed
onto a supplier who is directly liable for a price on carbon is then passed through to a client.
Therefore, Direct Cost Pass Through is that cost which is passed on from a directly liable supplier to
Council.
Directly liable
organisation (Origin Council
Energy / AGL)
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6. Explanation of carbon pass through (continued)
Indirect Cost Pass Through in reference to carbon pricing is when a supplier has a cost increase
imposed on it by a directly liable organisation and passes that increase in costs directly onto the
client. For example, a supplier may not be the highest of emitting organisations, yet they still
procure their energy from a power supplier who is directly liable. Therefore, the energy supplier
may increase the cost of supply to that organisation and that organisation will do one of three
things:
1. Absorb the total increase and not pass the cost increase through
2. Absorb a partial cost and pass a partial cost onto the client
3. Pass the full cost on to Council
Directly liable
Supplier: Visy
organisation
(Origin Energy /
Industries / ACI Council
Glass
AGL)
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7. It is important to understand both your inputs & outputs
 Map those outputs that are internal such as direct liability
 Map external inputs into council costs “Communication is
 Understand what compensation / funding you may be eligible for key.”
 Make sure you have a communications plan in place for stakeholders
 Stakeholders: small business, households / heavy industry / investors
Inputs Outputs Planning Communication
Effective
planning and “medium to long term planning will be
fundamental and organisations will
medium to long need to map things out with scenarios
term and higher risk profiling.”
Implementation
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8. Why it won’t be
thrown out…
An election in “We will dump
2013 this unfair tax”
Already reached year 1.5
of the fixed price period
The Opposition wins / takes
Hypothetical
Government at the end of
The political
2013
Practically impossible to remove
Why is it practically impossible? The practicality of the scheme by January 1st of 2014
the politics and the complexity of a sophisticated which means it could be July 1st of
piece of legislation. This is economic, structural, 2014 – the end of year two and
social and taxation “weaving” – also, it is plausible start of year three
that the Senate will still be controlled by the Greens
which would likely cause a double dissolution
election – which is a very big risk to take…
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9. Climate change & the business response is about as
big an issue as you can get... In 2011 we surveyed 347
58% business people and...
61%
Of those surveyed...
Believe that a price on carbon at least Are uncertain as to the
provides certainty, in terms of policy...
impacts...
68%
A price on carbon will have for
their organisation as it is uncertain
how they will be both directly and
Have no idea...
What the Coalition policy is or
66% indirectly impacted...
how it will impact them... Already responding...
And yet business and industry have already
begun to respond, some up to ten years
ago...
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10. We decided to repeat the exercise in November 2011
with local councils
42% 67%
Of those surveyed...
Believe that a price on carbon at least Were uncertain as to the
provides certainty, in terms of policy...
impacts...
71%
Have no idea...
What the Coalition policy is or
54%
how it will impact them... Already responding...
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11. December 2011 a research project began…
Three council groups / Individual / Small Group / Clusters
 Ranging in size and geographic location
 Rural, semi rural, large regional town centres
 Some had a belief that the carbon price would be thrown out / therefore
the politics had caused an immense amount of confusion
 Planning was in place but there was confusion over the impacts of carbon
pricing in relation t landfill (proximity rule)
 Some software being used to assess emissions is rudimentary at best and
flawed / wild variations when the software is tested
 Some software assesses results only against other users of the software
 A significant number of plans were coming up for review
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12. Carbon Management Framework
Risk,
Internal External Community Geographic
Planning &
Factors Factors Factors Factors
Compliance
Infrastructure Waste Mngmt Corporate City Services Water
•Property • Landfill • Admin •Parks and •Water
planning •> 25,000 • Buildings reserves •Waste
• Natural •< 25,000 • Works and water
resources services
• In order to plan for the future we need to • It is important to get across what other organisations are doing
understand whether or not your current carbon who may have a similar profile to your council
footprint is correct • You need to review what is happening on an annual basis and
• Has it been validated? this includes both an annual data review and validation /
assurance
• We need to understand the price impacts across the
first three years because this will also provide the • Identify what other initiatives can be applied to lower the
context for potential cost increases across the emissions profile of the organisation
organsiation
•What plans are currently in place and are they
aligned
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13. Project phase 1 re-cap
Mapping the Council’s carbon footprint and understanding the underlying data enables us to feed this information into the
development of recommendations for carbon reduction, risk profiling and the over arching carbon management framework.
Phase One: Data Collection Organisational Assessment
Carbon Footprint against current
Footprint Overview / analysis
Analysis Divisional
Breakdown
Council Carbon Reduction Carbon
Footprint strategies Mmgt
Framework
Risk and
Analysis Profiling
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14. Carbon footprint at the organisational level…
Division Current Validation Year1 Carbon Year2 Carbon Year3 Carbon Totals
Total Carbon Name analysis Price Impact Price Impact Price Impact
Output Potential Potential Potential
Price Impact $23 $24.25 $25.40
Potential has
been assessed on
a constant
footprint being 1
maintained from
year to year 2
through the fixed
price period
3
4
5
6
Total
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15. So what are some of the challenges?
Trusting your data
Making sure your footprint is correct – accurate data informs the short,
medium and long term plans required…validate it / assure it
Identify what additional funding you could access at both the State and
Federal level / budgeting for the cost of compliance / potential increase
in unpaid rates because of cost of living pressures
Carbon farming / household and building efficiency programs
The politics of climate change remaining toxic
Uncertainty – which is why you need to plan for a series of outcomes
Collaboration is key…
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16. What is happening @ the global level?
Rio+20
Making sure your footprint is correct – accurate data informs the short,
medium and long term plans required…validate it / assure it
United Nations Global Compact
Global Cities Program / encouraging knowledge sharing / global
secretariat based here in Melbourne
Regional Local Government
Auckland City Council / Wellington City (NZ) & Ireland
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17. matthew.tukaki@sustaingroup.net
www.sustaingroup.net
THANK YOU