Climate change is not only coming, it is already here; and so too is the law requiring businesses to take measures to mitigate an otherwise predicted temperature rise of 4°C by the end of the century.1 Businesses already have national greenhouse and energy reporting obligations and national renewable energy targets. However, until recently, the obligations on businesses and the ramifications for failing to comply under the Australian Federal Government’s proposed form of a national emissions trading scheme (ETS) have remained somewhat elusive.
On 14 May 2009, the Rudd Government introduced into Parliament its Carbon Pollution Reduction Scheme (CPRS) comprising six Bills.2 Originally due to commence on 1 July 2010, the Government has conceded that the CPRS will not take effect until 1 July 2011. As a potential trade-off, the Government has committed to more ambitious carbon pollution targets in certain circumstances, as well as tweaking a number of other design features to accommodate concerns about the impacts of the global recession.3 Passed by the House of Representatives on 4 June 2009, the fate of the CPRS in its current form will be decided by the Senate when Parliament resumes on 11 August 2009 with the benefit of a number of Senate inquiries and the release of draft regulations to the CPRS.4
Even though the global recession defence pleaded by industry and the Opposition alike has succeeded in delaying the Government’s original timeline,5 it is clear that the introduction of the CPRS is no longer a matter of “if”, but “when”. As a result, the sooner businesses and their executive officers assess their liability under the CPRS, the better prepared they will be to avoid the raft of penalties and sanctions that can be imposed against them and the broader consequences of any failure to comply.
This article seeks to conduct that analysis on behalf of businesses generally. First, the objectives and key design elements of the CPRS are deduced to place businesses’ liability into context. Secondly, the core obligations imposed on businesses under the CPRS are extracted as a basis for assessing their liability. Thirdly, the types of businesses liable for those core obligations under the CPRS are identified, as well as any potential to transfer that liability. Finally, the scope of liability for businesses and their executive officers who fail to comply with their core obligations is investigated, both under the CPRS and beyond.