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Since the early 1970s, environmental legislation around the world has become increasingly prescriptive, detailed, and complex. In the US, this included the Clean Air Act, amendments to the Federal Water Pollution Control Act, the Toxic Substances Control Act, forerunners to the Resource Conservation and Recovery Act (RCRA), and the Safe Drinking Water Act and amendments to the pesticides legislation.
The aftermath of these early legislative drivers in the US is that many other governments throughout the world have taken similar action with regard to the development and enforcement of environmental regulations.
In Australia, the corporate marketplace is faced with the need to understand and execute its environmental obligations on a far more stringent basis than ever before. Environmental regulations are enforced at the local, state and Commonwealth level.
The impact of this is that environmental concerns are routinely built into government actions. By and large, government authorities have institutionalised environmental quality concerns in decision-making.
In many projects today in Australia, progress towards regulatory approval can be significantly slowed because of inadequate information on specific environmental issues, which require expert input. Few projects proceed today without a rigorous assessment requiring specialist consulting assessment in all areas of the environment including air, noise, surface water, groundwater and flora and fauna. Human health impacts are also frequently of concern.
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Today, corporate environmental reporting for Australian businesses is becoming more demanding. For example, many companies must report annually to the Commonwealth Department of Environment and Heritage (DEH) on their releases to the environment of a range of pollutants, through the National Pollutant Inventory (NPI). For many companies, assistance is required from technically adept environmental specialists to ensure the information provided to the public is accurate.
This requirement to understand and execute environmental obligation is only expected to increase in the future as social views become more informed and the world becomes more aware of the need to protect our environment. This social pressure forces political change which is resulting in greater environmental responsibility and accountability for the business world.
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A green paper on the Carbon Pollution Reduction Scheme (CPRS) detailing Australia’s plans to implement a domestic emissions trading scheme was released on the 16 July 2008. The CPRS is a cap and trade emission trading scheme which will cover approximately 75% of Australia’s emissions (approximately 1,000 organisations that emit greater than 25 kt of greenhouse gases as CO2-e). The Department of Climate Change has expressed the intention to implement this scheme by 2010.
A European Union carbon trading market is already open, and European carbon emitters are trading allowances within their own countries and across borders. Phase I of the EU Emissions Trading Scheme began on January 1, 2005 and ran to December 31, 2007. Phase II will run from 2008-2012 to coincide with the first Kyoto Protocol commitment period.
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Compliance with the Kyoto Protocol requires that countries prove that they can track progress towards their emission targets.
Under the Kyoto Protocol - which Australia ratified in March 2008 - developed countries can use a number of flexible mechanisms to assist in meeting their targets. These are trading-based market mechanisms which include:
Joint Implementation (JI) – where developed countries invest in GHG emission reduction projects in other developed countries; and Clean Development Mechanism (CDM) – where developed countries invest in GHG emission reduction projects in developing countries.
PEL is well positioned to assist companies in the development of trading scenarios to maxiimise the opprtunities presented by emissions trading. Specifically, we can assist in the technical aspects such as developing baseline emissions, emissions trending and scenario analysis, and with emission inventories.
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