Donna Kelly and Denise McNabb

28 June 2012 – While the property industry is almost relaxed and comfortable about the carbon price start date on Sunday experts with a broader view say there is a “massive opportunity” for Australian companies to step forward to clean energy future with $470 billion of investment in the pipeline  – “most, carbon intensive.”

The official line in the property sector is that the carbon price will have minimal impact beyond a small increase in the price of building materials, tipped at less than 2 per cent.

But even so, individual companies are reluctant to elaborate.

GPT’s chief executive and managing director Michael Cameron was most forthcoming in a recent interview.

The impact will be just like “another tax” he said and in time work its way through rents to the “mum and dads”.

But he did not think it would change behaviour.

“In time it will add a layer of costs and will be added to the rents and outgoings and mum and dads at the end of the day will pay for it,” he said.

“I just don’t see it will have an impact on the environment. It’s just a tax. It won’t force people to use less energy.”

Stockland, Australia’s biggest residential developer declined to comment. (The company recently lost its sustainability guru Siobhan Toohill, amidst a raft of senior staff resignations, including national manager strategic urban planning Debarah Dearing, that followed company restructuring and retrenchments of 30 senior staff.)

Rob Fowler at his presentation for Napier & Blakeley

Sustainability and carbon trading expert Rob Fowler, (profiled this week ) agrees the carbon tax will create just “a small ripple effect” mainly through material costs but said there were broader issues to be addressed by the corporates in the property sector.

Mr Fowler, who is the Australia and New Zealand representative of the International Emissions Trading, said “there is already a very strong push for energy efficiency and a sustainable environment with building materials, designs, standards and star ratings”.

At a Napier & Blakeley event in Melbourne earlier this year Mr Fowler said that that the good news for property was the $10 billion Clean Energy Fund, which would be partly available for energy efficiency programs.

Low Carbon Australia was already in place and trying to push alternative sources of funding for environmental upgrades, [such as Environmental Upgrade Agreements] .

“It means there will be cheaper money to flow in the property sector for energy upgrades,” he said.

At the broader level, he said, Australia, “has great opportunity for the next five years.”

He tipped significant investment would go into the rural sector for more sustainable land practices.

And the carbon trading scheme could work, if [only] a political bi-partisan approach could be taken, and the scheme was introduced as a permanent measure removing uncertainty among business.

“If we do it well, it’s going to be a good thing,” he said “(And) some days I am eternally optimistic.”

Mr Fowler said there were great opportunities for companies looking to buy and bank international carbon credits with the price low because of Europe’s struggling economies.

“International credits are super cheap right now and no-one is buying,” he said.

That was in part because international credits could not be used under the Australian scheme until 2015, he said.

But if companies had the cash flow, political fortitude, “courage” and belief the scheme would endure, it was the perfect time to go shopping, he said.

“This is a massive opportunity for Australian companies to step forward to clean energy and a clean future. Right now there is $470 billion of investment in the pipeline. Most is carbon intensive.”

However, the uncertainty over the outcome of next year’s federal elections had caused Australian companies to freeze the preparation of their future carbon trading strategy until then.

Until there was more clarity on the structure of the system not much can be done.

“Companies have very little choice but to hold back mandates in terms of carbon trading but they are still getting ready for compliance,” he said.

Mr Fowler said business was looking at three broad scenarios.

The first retained the present policy settings with Labour remaining in power.

The second, he said, was a change of government next year with the present policy being rescinded and an emission reduction fund introduced.

“The third is a change of government next year but the policy and the legislative package that ensues as a result of that change will be more middle ground, sitting somewhere between the situation now and the Opposition’s approach,” he said.

“Australia’s corporate sector would move much faster and they want to, but with the existing political situation it is pretty difficult to say whether or not it will be here next year.”

– with Tina Perinotto