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Purpose - The purpose of this paper is to investigate the potential impact of the approved Australian carbon emissions reduction plan on the cost of capital and the association between companies' carbon emission intensity and the cost of capital. Design/methodology/approach - A sample of Australian Stock Exchange 200 (ASX 200)-indexed companies from 2006 to 2010 is used. Hypotheses are tested based on Heckman's two-stage approach. Three regression models are developed to examine the association between carbon emissions and the cost of capital. Findings - Using a sample of ASX 200-indexed listed companies, the paper finds that the cost of capital, including the cost of debt and the cost of equity, will increase for emissions-liable companies. Results also show that the cost of debt is positively correlated with a company's emission intensity. However, little evidence supports that the emission intensity affects the cost of equity. Originality/value - As it is evident that the emissions reduction plan will adversely affect corporate entities' cost of capital, this study suggests that companies, investors and lenders need to include carbon emission in risk analysis. An emissions-liable company should establish strategies to combat the impact of the Plan on rising cost that comes with the enforcement of the Plan. Government assistance is essential in the transitional period. [ABSTRACT FROM AUTHOR]

Climate-action groups (CAGs), whose members are highly motivated and publicly engaged citizens, have emerged in recent years within Australia. This paper draws from a multiple case study of eight Australian CAGs. It considers what distinguishes CAGs within third-sector environmental organisations active on climate change; what CAGs can tell us about the characteristics of people who join similar grassroots TSOs concerned with environmental and sustainability issues; and whether and how CAGs enhance the individual and collective motivations of their members in voluntary climate-change mitigation. The paper argues that CAGs are distinct from the centrally organised and established Australian environmental non-government organisations working in the climate-change policy arena. They are strongly associated with place, and enhance both individual and collective motivations for voluntary climate-change mitigation. CAGs, as grassroots 'niches', challenge the dominant discourses of unsustainability, as they allow actors to develop alternative practices and provide pathways to a low-carbon society. [ABSTRACT FROM AUTHOR]

Cities, and particularly urban local governments, are now widely recognised for their part in the complex, multilevel landscape of climate governance and carbon reduction. Nonetheless local government projects and initiatives are often framed as of limited value, outside the formal governance framework, and unable to contribute systematically. In contrast, this paper locates these initiatives as already part of the way in which governing climate and carbon is conducted and as governance experiments. We provide a descriptive analysis of these initiatives across Australia's capital cities, highlighting the domains, mechanisms, and partners through which they operate. We illustrate the enactment of experimentation through a detailed examination of the Sydney-based initiative termed Treading Lightly, drawing out in particular the workings of institutional experimentation and experimentation in governance practices. We conclude with brief reflections on the governance implications of such experimentation and their importance as a site in the emergent politics of urban carbon governance. [ABSTRACT FROM AUTHOR]

Abstract: Building adaptive reuse plays a critical role in emissions reduction and supports global climate protection. Thus, the designing of future buildings with embedded adaptive reuse potential is a useful criterion for sustainability. This paper describes the development of a new rating tool known as adaptSTAR, which offers holistic and unified design criteria suitable for assessing the adaptive reuse potential of future buildings. The findings show that criteria can be identified and weighted according to physical, economic, functional, technological, social, legal and political categories to calculate an adaptive reuse star rating. In addition, this paper reports on the first stage of the research methodology used in the initial development of the rating tool and concludes with some preliminary observations from 12 selected successful case studies in New South Wales (NSW) and Melbourne, Australia. The use of adaptSTAR in designing future buildings will lead and help promote low carbon built environments. [Copyright &y& Elsevier]

In the absence of a national price for carbon, a number of other market-based instruments aimed at incentivising the transition to renewable and cleaner energy have been developed and are now operating in Australia. These include the NSW Greenhouse Gas Reduction Scheme, the Renewable Energy Target and the National Carbon Offset Scheme. The design of the deferred Carbon Pollution Reduction Scheme included specific taxation rules aimed at scheme transactions but these other certificate-based markets have been left to operate under the general taxation rules. This article provides a detailed technical analysis of the taxation consequences that arise from transactions under the nominated schemes and considers taxpayers who participate in the following ways: those which undertake qualifying activities that give rise to the generation of offsets; those who acquire offsets to meet compliance liabilities; and those who voluntarily seek carbon neutral status. In order to provide a context for this discussion, the article also includes a description of the basic operation of each scheme so that the relevant transactions may be identified. The similarity in design features across the schemes highlights the conclusion that substantially similar taxation issues are raised by each of the schemes. Particular emphasis is placed on forestry offsets and the new Carbon Farming Initiative is also briefly discussed. [ABSTRACT FROM AUTHOR]

This commentary offers a background to the carbon challenge, carbon offsets, and emissions trading from an Australian perspective. It sets the scene for a more detailed discussion about carbon sequestration rights, which are defined explicitly by some Australian states and territories but not by others. We highlight that the term carbon sequestration right is poorly defined and relies, inappropriately we suggest, on the borrowed term profit à prendre. This terminology is at odds with the notion of a carbon property right, which has yet to be conceptualized fully by the marketplace and the existing legal framework, given the need to fully engage the sociological and ecological dimensions of carbon and climate change. We find that current policy intent, together with evolving public will and corporate responsibility, is ahead of the science and the legal framework for managing property rights in carbon (used broadly to represent the six greenhouse gasses). The Australian Property Institute has taken the lead in its 2007 policy paper Conceiving Property Rights in Carbon and more recently in Sheehan and Kanas's investigation of "Property Rights in Soil." This article takes the discussion to the next stage by offering a framework for property rights in carbon and asking whether such rights should be vested in the state or the nation, rather than merely creating a commodity that can be efficiently allocated and thus speculated upon. [ABSTRACT FROM AUTHOR]

We seek insights into potential benefits for firms adopting strategies to improve business sustainability in a carbon-constrained future. We investigate whether lenders incorporate a firm’s exposure to carbon-related risk into lending decisions through the cost of financing, and if so, importantly whether firms can mitigate the penalty by demonstrating an awareness of their carbon risks. We use a sample of 255 firm-year observations from eight industries over the period 2009-2013. We measure carbon-related risk exposure as the firm’s historical carbon emissions and our primary measure of carbon risk awareness is based on the firm’s willingness to respond to the Carbon Disclosure Project (CDP) survey. We document a positive association between cost of debt and carbon risk for firms failing to respond to the CDP. Further, this association is economically meaningful, with a one standard deviation increase in carbon risk mapping into between a 38 and 62 basis point increase in the cost of debt. Equally, we find that this penalty is effectively negated for firms exhibiting carbon risk awareness. Our results are robust when we consider alternate measures of carbon awareness—disclosure through alternative medium to the CDP and firms’ annual cash investment in new capital assets using “cleaner” technology. Our results highlight not only the importance of carbon awareness as a business strategy for polluting firms, but also its importance to lenders exposed to their clients’ default and reputational risk. The debt market appears to incorporate historical carbon emissions and forward-looking indicators of carbon performance. [ABSTRACT FROM AUTHOR]

The purpose of this study is to understand how regulatory uncertainty associated with the Australian Federal government initiatives towards establishing a carbon pricing scheme has affected the perceptions and management of risks related to carbon emission reduction at the organisational level. The present study, based on evidence from archival and interview data from two Australian energy sector firms, provides insights into how managers perceived various risks associated with the Renewable Energy Trading (RET) scheme and the delay in the proposed Carbon Pollution Reduction Scheme (CPRS), and how such risks were seen to impact different features of their organisations' management control system (MCS). Our findings indicate that regulatory uncertainty and the strategic stance undertaken by organizations affect a variety of internal uncertainties related to financial, information processing and organisational values, which in turn impact risk mitigation and performance management strategies. [ABSTRACT FROM AUTHOR]

Carbon stock change due to forest management and disturbance must be accounted for in UNFCCC national inventory reports and for signatories to the Kyoto Protocol. Impacts of disturbance on greenhouse gas (GHG) inventories are important for many countries with large forest estates prone to wildfires. Our objective was to measure changes in carbon stocks due to short-term combustion and to simulate longer-term carbon stock dynamics resulting from redistribution among biomass components following wildfire. We studied the impacts of a wildfire in 2009 that burnt temperate forest of tall, wet eucalypts in south-eastern Australia. Biomass combusted ranged from 40 to 58 tC ha−1, which represented 6–7% and 9–14% in low- and high-severity fire, respectively, of the pre-fire total biomass carbon stock. Pre-fire total stock ranged from 400 to 1040 tC ha−1 depending on forest age and disturbance history. An estimated 3.9 TgC was emitted from the 2009 fire within the forest region, representing 8.5% of total biomass carbon stock across the landscape. Carbon losses from combustion were large over hours to days during the wildfire, but from an ecosystem dynamics perspective, the proportion of total carbon stock combusted was relatively small. Furthermore, more than half the stock losses from combustion were derived from biomass components with short lifetimes. Most biomass remained on-site, although redistributed from living to dead components. Decomposition of these components and new regeneration constituted the greatest changes in carbon stocks over ensuing decades. A critical issue for carbon accounting policy arises because the timeframes of ecological processes of carbon stock change are longer than the periods for reporting GHG inventories for national emissions reductions targets. Carbon accounts should be comprehensive of all stock changes, but reporting against targets should be based on human-induced changes in carbon stocks to incentivise mitigation activities. [ABSTRACT FROM AUTHOR]

The Northern Territory (NT) in Australia has been perceived by many as a frontier for future agricultural development that could serve as a future food bowl for Australia. However, such development is likely to require the conversion of large areas of relatively intact savanna forests, woodlands and grasslands into other land uses, resulting in the release of large amounts of greenhouse gases. With the evolution of international carbon markets, new livelihood opportunities are arising from the management of carbon in landscapes, to enhance sequestration as a means of combating climate change. In order for land owners and governments to realise these opportunities, it is necessary to gain a better understanding of the potential carbon stocks that can occur across different ecosystems throughout the NT. This article assesses the utility of the National Carbon Accounting Toolbox (NCAT) for estimating and mapping carbon stocks in the NT. The NCAT modelling estimates that the NT environments hold approximately 21.5 billion tonnes of carbon dioxide equivalents. The estimates of carbon vary from 5 to 235 tonnes of carbon per ha, decreasing from the north, where the highest estimates are for north-east Arnhem Land and the Tiwi Islands, to the arid lands of the south. They are thought to be the lowest in the Spinifex grasslands east of Alice Springs and west of Tennant Creek. Estimates of potential emissions from clearing and burning of native vegetation range from 27 to 439 tonnes of carbon dioxide per ha, depending on the initial vegetation type. The NCAT estimates are already being used for land-clearing assessments in the NT and demonstrate that Indigenous lands hold high levels of carbon. The performance of NCAT will depend strongly on the quality of the data on which predictions are based and the robustness of model parameterisation. We suggest that further work on soils, fire, grasslands, wetlands and woody debris is needed to improve the validity of the NCAT estimates for carbon in north Australian environments. [ABSTRACT FROM AUTHOR]

Spontaneous combustion and low-temperature oxidation of waste coal and other carbonaceous material at open-cut coal mines are potentially significant sources of greenhouse gas emissions. However, the magnitude of these emissions is largely unknown. In this study, emissions from spontaneous combustion and low-temperature oxidation were estimated for six Australian open-cut coal mines with annual coal production ranging from 1.7 to more than 16 Mt. Greenhouse emissions from all other sources at these mines were also estimated and compared to those from spontaneous combustion and low-temperature oxidation. In all cases, fugitive emission of methane was the largest source of greenhouse gas; however, in some mines, spontaneous combustion accounted for almost a third of all emissions. For one mine, it was estimated that emissions from spontaneous combustion were around 250,000 t CO2-e per annum. The contribution from low-temperature oxidation was generally less than about 1% of the total for all six mines. Estimating areas of spoil affected by spontaneous combustion by ground-based surveys was prone to under-report the area. Airborne infrared imaging appears to be a more reliable method. [ABSTRACT FROM AUTHOR]

• Here, we evaluated how increased shading and declining net photosynthetic capacity regulate the decline in net carbon balance with increasing leaf age for 10 Australian woodland species. We also asked whether leaves at the age of their mean life-span have carbon balances that are positive, zero or negative. • The net carbon balances of 2307 leaves on 53 branches of the 10 species were estimated. We assessed three-dimensional architecture, canopy openness, photosynthetic light response functions and dark respiration rate across leaf age sequences on all branches. We used YPLANT to estimate light interception and to model carbon balance along the leaf age sequences. • As leaf age increased to the mean life-span, increasing shading and declining photosynthetic capacity each separately reduced daytime carbon gain by approximately 39% on average across species. Together, they reduced daytime carbon gain by 64% on average across species. • At the age of their mean life-span, almost all leaves had positive daytime carbon balances. These per leaf carbon surpluses were of a similar magnitude to the estimated whole-plant respiratory costs per leaf. Thus, the results suggest that a whole-plant economic framework, including respiratory costs, may be useful in assessing controls on leaf longevity. [ABSTRACT FROM AUTHOR]