Environmental Commodities
“...the world carbon market is growing at a staggering rate...”*
Major existing domestic schemes:
- NSW carbon trading scheme (GGAS) with NGACs (carbon credits) traded
- The Federal Mandatory Renewable Energy Target Scheme (MRET) mandates that electricity retailers purchase 2% of energy directly or indirectly (by purchasing RECs) from renewable sources
Substanial growth in the value of traded environmental commodities will effectively be legislated over the next decade. The election of the Rudd Labor government will create substantial growth in the environmental product market as a result of the implementation of:
- A new mandated reduction emission target of 20% by 2020. This represents a 1000 time increase in the present reduction target of 2%.
- The introduction of a regulated federal emissions trading scheme by 2011.
Clean Energy Council forecasts**:
- Approx. 13% CAGR*** in value of RECs traded to 2020
- Approx. 9% CAGR in value of NSW carbon credits traded to 2011 (then superseded by larger federal emissions scheme)
Environmental Products
Driven by the ongoing drought and climate change, it has been estimated that the market for water and energy environmental products and solutions will grow from $2.1bn to $3.1bn over the next seven years.
Green Plumbers is the No. 1 environmental products and installation services network in Australia and the only one formally affiliated with the MPMSAA.
- Near term growth is driven by water and energy efficiency products
- Medium-longer term growth is forecast to be in energy efficiency products
- Demand is supported by significant State and Federal Government grant and product rebate schemes – targeted at schools, businesses, communities and households
| Examples of current grant and subsidy schemes |
| Community Water Grants (CWG) |
$1.6bn federal program running to 2013 targeting large scale (>$1m) community water projects |
| Green Vouchers for Schools |
$336m funding provided over four years to allow public schools to install solar hot water systems and rainwater tanks |
| Solar hot water rebates |
$1,000 rebates for households installing solar hot water systems |
| Victorian Water Smart Scheme |
Rebates on households installing water saving systems (e.g. rainwater tanks) |
*“Voluntary Carbon Markets”. R. Banyon, A. Hawn, K. Hamilton. 2007 Earthscan London
**Clean Energy Council “2007 Carbon Markets Report”
***Compound Annual Growth Rate