Amid warnings from scientists of global warming, pollution, the exhaustion of fossil fuels and the extinction of flora and fauna species, individuals, businesses and governments have begun to give much more weight to the need for business activities to be more responsible and sustainable for future generations.

One of the options to help achieve this is to allow market forces to reduce carbon pollution, which is one of the main contributors to global warming, in the form of a carbon tax. There is no limit to emissions, but a tax must be paid by companies that do emit. Under a carbon tax regime, companies cannot trade emissions permits, and all taxation revenue generated goes to the government.

A second approach is an ‘emissions trading scheme’. The potential introduction of such schemes has been the focus of much political debate in many countries, including Australia, in recent years. Most schemes and proposed schemes are based on creating carbon permits, which entitles the organisation owning the permit to create a certain amount of carbon pollution. The number of permits is limited, so those organisations that generate carbon pollution need to buy enough permits to offset their emissions from organisations that do not require the permits. The theory is that this will push up the price of products that require carbon pollution, reducing demand, whereas carbon‐friendly products will fall to be relatively low in price, increasing demand.

Although Australia only emits approximately 1.5 per cent of total global carbon emissions, it is the world’s third largest emitter of carbon dioxide per capita. About 1000 Australian companies currently emit more than 25 000 tonnes of carbon dioxide equivalents a year. By targeting these with a proposed emissions trading scheme, the Australian government hopes to reduce emissions to 26–28 per cent of 2005 levels by 2030. Despite some debate as to whether or not a scheme would hurt small‐ to medium‐sized enterprises, the Senate cleared the carbon tax legislation on 9 November 2011 (having been passed by the House of Representatives a month before). However, when a new conservative government was elected in 2014 it repealed the carbon tax, stating it did so to relieve cost pressures on families and businesses. New Zealand had made an earlier start, with the first transaction in its greenhouse gas emissions trading market taking place in 2009. New Zealand’s emissions market deals in New Zealand Units (NZUs). New Zealand’s first sale involved 50 000 NZUs at $20 a unit, and represented the sequestration of 50 000 tonnes of carbon in forests.

QUESTION

Can you think of some ways that your university or workplace can reduce its carbon emissions? Provide an example.