Citola Blog
Carbon Price Legislation, Low-Carbon Economic Transition and Large Commercial Opportunities
Earlier this year at the invitation of the Australian Department of Climate Change and Energy Efficiency (DCCEE), Citola submitted a response about the design of the Carbon Farming Initiative (CFI): Citola’s submission can be seen here.
A key point that was conveyed to the DCCEE was that the realities of the paradigm shift required as the Australian economy transforms to a 'renewable' economy are clear and broad participation needs to be driven by compliance and voluntary demand. I.E. CFI initiatives to drive adoption must be driven by large and liquid environmental markets.
With the passing of the carbon price legislation in Australia this week, the government has taken a big step towards facilitating these ‘large and liquid’ environmental markets that will drive adoption, efficiency, technology transfer and incentivise sustainable land management.
What does this mean?
Fundamentally, from a carbon/environmental marketeer’s perspective it is creating a billion dollar market overnight and large commercial opportunities from the necessity that the community, business and investors transition towards a "lower-carbon" economy. The opportunities are greater when this reality is fundamental to your business model (like Citola) rather than having to be retrofitted to a legacy business model and operations.
With a price on carbon and a transition to a "lower-carbon" economy, it can be seen that the greatest commercial return going forward will be achieved by optimising for triple bottom-line outcomes (economic, environmental, social) and placing a value on natural capital (i.e. the dividend received from nature and the environment).
Why?
Because a price on carbon and other environmental-based market incentives DO place a value on natural capital and incentivise those who incorporate this into their business model and bottom-line. This view in the context of an economy not solely based on growth (i.e. an economy that considers other environmental, climatic, social contexts that do provide services/products previously not factored into business/economic decisions) aligns with the view of Pavan Sukhdev on three-dimensional capitalism. Pavan, the founder and CEO of GIST Advisory, has stated that human and natural capital are as important as financial capital but often ignored.
“I am often asked how I reconcile my capitalist background with my commitments to nature and the environment? I give my stock reply 'I don't reconcile them – I am a total capitalist'. And usually, the conversation ends there.” - Pavan Sukhdev
At Citola, we welcome the new markets that have been created by the passing of the Australian carbon price legislation and the strong demand it will create for domestic Australian Carbon Credit Units (ACCUs). The rewards will be greatest for those organisations who recognise the opportunities and have the expertise and ‘operational engine’ to execute. We look forward to it.
Access Australian Carbon Credit Units
Citola provides client access to a long-term, fixed price provision of Australian Carbon Credit Units (ACCUs) eligible to meet liabilities under the Australia carbon price legislation.
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