SMEs have been overlooked in climate change debate: ACCI

The Australian Chamber of Commerce and Industry says the impact of an emissions trading scheme on small and medium businesses has been largely overlooked and must be debated more seriously before a scheme is introduced.

The Australian Chamber of Commerce and Industry says the impact of an emissions trading scheme on small and medium businesses has been largely overlooked and must be debated more seriously before a scheme is introduced.

The ACCI’s submission in response to the Government’s green paper on climate change argues that while SMEs may not be directly affected by an emissions trading scheme, “they are a vital conduit for the price mechanism to flow through to consumers and this will change Australia’s economic structure”.

“It is generally considered that SMEs are not emissions intensive or highly trade exposed, and that any cost increases can readily be passed through to the consumer,” the report says. “[But] in many instance SMEs do operate in export or import competing markets and direct and embedded energy costs can be significant.

“Moreover many characteristics of SMEs can mean they are less flexible in adapting to changes in input prices compared with larger better capitalised firms.”

The ACCI is concerned that it has not been able to see official modelling from Federal Treasury, which is due out later this year.

“In a large part this concern relates to the potential economic and compliance costs that will be faced by business, especially smaller enterprises which are less able to pass through costs. These costs will be exacerbated where an emissions trading scheme operates with very restrictive emissions targets and competitor nations remain outside these arrangements.”

Later today, Ross Garnaut, who is advising the Federal Government on how best to tackle climate change, will hand his final report to Prime Minister Kevin Rudd. While most of Garnaut’s views have been aired in his previous draft reports and discussions papers, conservation and business groups are waiting to see if he sticks with his draft recommendation to cut emissions by 10% by 2020.

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