85 per cent of of 38 firms directly liable for the carbon price have a carbon strategy in place. Photo: Reuters
BUSINESS leaders overwhelmingly believe carbon pricing will survive and those directly affected have started taking steps to reduce greenhouse gas emissions, according to a survey of senior executives.
The survey of 136 executives commissioned by multinational GE found nearly three-quarters believed the carbon price scheme would remain despite the Coalition's pledge to repeal it if elected.
But nearly half said they thought the scheme starting on Sunday - requiring big emitters to pay a fixed rate per tonne of carbon dioxide for three years, before evolving into emissions trading under which pollution permits can be bought and sold on the market - would eventually be replaced with an improved model.
Of the firms directly liable for the carbon price, it found 85 per cent had a carbon-reduction strategy in place. Across all firms, nearly a third, up 3 per cent from early last year, had modelled the impact of different carbon prices on operations.
But there was a slight drop in the way businesses felt prepared for the scheme.
The Economist Intelligence Unit, linked to the The Economist newspaper and which conducted the survey, found this was likely to be in part due to nervousness about the scheme being greatest just before it was introduced.
While 72 per cent believed carbon pricing would survive, nearly two-thirds thought the $23-a-tonne starting price was too high. About one in 10 said it was too low.
Only a third believed the opportunities created by carbon pricing would outweigh the risks in the long run - down from half last year.
GE's director of ecomagination, Ben Waters, said evidence from New Zealand, where emissions trading started in 2008, suggested concern would wane after the scheme started.
In submissions to the NZ government, 63 per cent of companies last year said they backed its scheme. Two years earlier 78 per cent were opposed.
''Given we are about to impose a new cost on business … I don't think it is surprising that there is some anxiety and nervousness. I'd be very surprised in a year's time if it doesn't move in the other direction,'' Mr Waters said. The survey showed the scheme was doing what it was supposed to be doing: spurring businesses to become more energy efficient and cut emissions.
About a quarter of those surveyed led energy and resources companies, 15 per cent were in manufacturing, 12 per cent in construction and real estate and 12 per cent in retail.
Companies listed as having prepared for a carbon price include oil and gas multinational Shell, which began planning for emissions trading in 1997 and factors a $40 carbon price into investment decisions.
Wesfarmers, the owner of Coles, expects a net carbon cost of $100 million, compared with 2011 revenue of $56 billion. It said over four years it had invested heavily in energy-efficiency technology to cut power consumption at its stores and reduced emissions from its chemical business.
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