CEOs concerned about business climate change

A SURVEY of 79 Queensland company executives has ranked domestic climate change as the biggest issue that will adversely impact their organisations over the next 12 months after the obvious number one issue of the global economic environment.
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Queensland Resources Council chief executive Michael Roche.

Blair Price

The Queensland Resources Council’s CEO Sentiment Index survey was carried out last month, with the QRC saying the companies cover the majority of mining, minerals processing, contracting, exploration, electricity generation and oil and gas extraction activities in the state.

For the global economic environment, the average of the CEO responses came in a score of 75 out of 100, meaning the impact was considered “more than normal”

While the average score was lower at 68, the same rating applied to how CEOs viewed domestic climate change policies, which rated second out of eight surveyed issues.

Uncertain and /or poor regulation was the third-most concerning issue, according to the sentiment index, domestic workplace relations policies was fourth while difficulty in raising capital was fifth with a score of 62.

“Not surprisingly, the issue keeping most CEOs awake at night is the global economic environment and the uncertainty surrounding a timetable for recovery,” QRC chief executive Michael Roche said.

“Also rating highly as concerns are the impact of domestic climate change policies currently before the Australian Parliament and a raft of administrative and sovereign risk uncertainties at the state level.

“Workplace relations policies, capital raising, the availability of industry infrastructure and increasing input costs were also regarded by chief executives as priority business concerns over the next 12 months.”

In a feature story on its June quarter State of the Sector report, QRC said four separately commissioned economic reports showed the proposed Carbon Pollution Reduction Scheme would contribute to falls in coal mining output, employment and royalties in the years 2020 and 2030 when compared to a “business as usual” scenario.

“This is because the emergence of a global emissions price will cause changes in global demand, and domestically the CPRS will cause a number of current operations to either shut down prematurely or scale back production,” QRC said.

“In addition, future investment in new operations will be discouraged.”

The QRC also noted that Australia’s emissions trading scheme was set to be the toughest in the world.

“Compared with current and proposed ETS schemes around the world, the Australian ETS is unique and onerous in that it will require emitting industries to purchase through auction 70 to 75 per cent of its net permits from the outset of the scheme.

“Alternatively, other countries with an ETS have never auctioned more than two per cent of their permits, and the proposed Waxman-Markey legislation, which recently passed the United States House of Representatives, proposes only 15 to 18 per cent auctioning over the first decade.

“This is recognition that high carbon costs will damage those industries that are trade exposed, are price takers in global markets and can’t pass costs on and, who compete against countries with no such carbon costs.”