Strategic responses to carbon pricing through carbon management: an Australian study

1 Jan 2017

The seriousness of climate change is highlighted by scientific (IPCC, 2014), economic (Stern, 2009) and political (Gore, 2006) evidence. This has led to an increasing concern about carbon emissions which contribute to the climate change problem, and the need to price carbon pollution to minimise the adverse effects of climate change (Garnaut, 2010). The advent of carbon pricing implies that carbon-related impacts are no longer a peripheral aspect of organisational systems and procedures. There is an increasing requirement to embed carbon-related issues into mainstream practices, and management systems need to be extended to incorporate such elements. The Australian Government response to climate change has resulted in the release of the National Greenhouse and Energy Reporting System (NGERS) legislation in 2008 (Lodhia and Martin, 2012). This requires organisations that meet a certain threshold of greenhouse emissions to report on their emissions and to have this information independently audited. Organisations are required to report on the direct emissions resulting from their activities (Scope 1 emissions) and their indirect emissions (use of electricity, gas or steam). They could also voluntarily report on their other indirect emissions which are emissions that arise as a result of their product or service (referred to as Scope 3 emissions). This legislation was a precursor to the development of a future carbon pricing system that would make organisations accountable for their greenhouse gas emissions. From July 2012, Australian organisations were accountable for their carbon impacts through a carbon tax on their activities. A need therefore arises for examining how these organisations responded to the carbon tax through changes to their management systems. Given the subsequent repealing of the carbon tax in 2014, a need arose to document the intricacies of organisational responses as a result of the introduction of the carbon tax, and to establish whether its abandonment led to a change in the existing approach towards managing climate change. This study is one of the first systematic investigations to consider how Australian organisations responded to the carbon tax through their management systems. The transition to a low-carbon economy is a difficult task, and the adoption and repealing of a carbon tax in Australia provides ample opportunities for understanding if and how organisational behaviour changed as a result of carbon pricing requirements.

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