This is the view of Businesses for a Clean Economy (B4CE), which added that businesses also require certainty in order to transition their operations to lower emissions over time in the most cost effective and efficient way.
Thus, it is calling on Clive Palmer's proposal, launched by former US Vice-President Al Gore last week, to move to an emissions trading scheme (ETS) with a carbon price set at zero until other major trading partners begin their own schemes, to be reconsidered.
Palmer met with Prime Minister Tony Abbott last week, just hours before the carbon tax repeal passed the lower house of parliament, to discuss its passage through the new Senate, where the PUP holds the balance of power (see Related Stories).
Although it was reported that Abbott had rejected Palmer's ETS proposal, the retired mining magnate told the Financial Review today that he was confident an ETS would become law within the next 12 months.
However, B4CE believes a flexible carbon pricing system is a better option, given there are already markets operating within most of Australia's major trading partners, with momentum for widespread national and global carbon pricing building.
B4CE added that the building blocks to move to a flexible carbon price are already in the hands of policymakers by converting the current fixed price mechanism to a floating one.
"It was encouraging to see the practical understanding Mr Palmer now has of the critical need for action on climate change and global leadership, underpinned by consensus science. His support for the retention of the Renewable Energy Target without any amendments, retention of the CEFC, which invests in clean-tech projects at a profit, and support for the CCA and its important independent oversight should be applauded," Jennifer Lauber Patterson, B4CE spokesperson said.
"However, it is important for the PUP to seek a transition to a floating price rather than supporting the removal of the existing carbon price architecture.”
A move to an immediate floating price on carbon, B4CE said, would also ensure Australia’s competitive position with the 40 other countries with emissions trading schemes around the world, including key trading and investment partners such as the European Union, California, and seven provinces in China.
South Korea’s ETS is also slated to begin in 2015, with China most likely moving to a national scheme in the same year.
Signatories to the B4CE initiative comprise more than 400 businesses and associations.
According to an AECOM survey commissioned by B4CE, a move to flexible carbon pricing has broad-based business support.
“The AECOM survey showed that businesses support strong policy action that will effectively and efficiently reduce emissions. The business community also signalled their desire to be part of the solution, but one that provides long-term certainty and investment confidence," Lauber Patterson said.
"B4CE is calling on Australia’s lawmakers to recognise the significant voice of the forward-thinking business community, provide certainty, and immediately support a price and limit on carbon, like a flexible emissions trading scheme."
