23 August 2011 – Only weeks after the details of the upcoming carbon tax were released public support is slowly turning in favour of the tax.
Ad campaigns for and against the tax are running and one would hope they discount each other and give a real indication of the increase in acceptance.
Only time will tell if the Australian people really are willing to put their money where their mouths are.
A price on carbon in our economy creates the largest business opportunities since the dot com days and will most likely dwarf the growth the tech bubble created when carbon pricing goes into full swing over the next few years.
Whether you are a well established business, a start up or an entrepreneur or investor; there are plenty of opportunities to grow, future proof, diversify or completely begin your business within the carbon constrained world.
The smart and opportunistic operators can capitalise on these opportunities and maximise profits, environmental and social benefits all at the same time. Clever huh?
Maybe it’s just good timing, being in the right place at the right time. A lot of life seems to be about timing which leads me into today’s topic.
Future discounting neglects future needs
Future discounting is neglecting the needs of the future for present gains or rewards, often referred to as short term thinking.
Short term thinking almost always goes against the principles of sustainability and is often the modus operandi for the majority of businesses. This is why accepting a price on carbon is so hard for so many.
Opportunity cost is the concept of appraising the economic value in taking one option at the expense of another.
We are in business to make money which often results in short term opportunities being the most attractive.
What happens when we go for the quick buck or the cheapest fix to a solution?
A good current example of opportunity cost and future discounting is the widespread reluctance to take action on greenhouse gas reduction.
Nearly all the economic commentators agree that the longer we take to put a price on GHG gas pollution the more expensive the solution will become in the future, for everyone.
Provided that we agree that climate change is being caused by humans, it seems inevitable that a price on GHG pollution will occur across the world eventually.
It may get to the stage where businesses will not trade with other organisations that don’t include the cost of GHG emissions in their products.
Before this happens however, there are massive opportunities to firstly reduce GHG emissions and operating expenses but also to take advantage of new technologies, partnerships and directions in your business through the plethora of opportunities offered through practicing sustainability.
The key is to be open to new opportunities. If you keep doing the same things you will continue to get the same results.
The construction and building industries are already focusing on reducing carbon quite heavily but at the same time there are a lot of “old school” builders out there who don’t seem to give a stuff.
I see this as a golden opportunity to grow your business in this field and your clients are only going to want more environmental performance from their projects in the future.
One of the key difficulties is explaining (selling) to clients the concept of spending a little extra upfront to save significantly more in the future on running and maintenance costs.
This sort of concept also works in reverse too such as with the “now being discussed again” mandatory disclosure for residential properties which is currently in public consultation.
The idea being here that if the property is going to cost a lot to run in terms of energy you should have to pay less for it up front.
The key issue here is information; its credibility and availability and let’s face it credible and easily available information can be hard to come by for any business.
Having good information about upfront costs, continuing costs, environmental/GHG implications and potential regulatory costs should enable businesses to weigh up the opportunities over the short and long term.
The way markets are heading with increasing costs for environmental impact one would hope businesses take more consideration of long term costs than they have historically.
Richard Nicol is the director of Building Green Business which advises small to medium sized businesses on a wide range of sustainability and energy saving initiatives.