Climate Change
What is Climate Change?
Climate change is undoubtedly one of today’s biggest challenges. It is now widely accepted, and scientific evidence has confirmed, that human activity is changing the climate of the Earth. This has significant implications on our everyday lives.
Greenhouse gases are a natural part of the atmosphere. They absorb and re-radiate the Sun's warmth, and maintain the Earth's surface temperature at a level necessary to support life. The problem we now face is that human actions are increasing the concentrations of the gases that trap heat. This is contributing to a warming of the Earth's surface. (www.climatechange.gov.au ).
This warming may then cause changes to the Earth’s climate, leading to dramatic environmental, economic and socials impacts.
What is the Carbon Pollution Reduction Scheme?
The Federal Government has announced plans for Australia to have a Carbon Pollution Reduction Scheme (CPRS) in place by 2010. The Carbon Pollution Reduction Scheme is often referred to as an Emissions Trading Scheme or ETS - the meaning is the same.
Emissions trading is designed to control carbon emissions by providing economic incentives for companies to reduce their emissions. Under a CPRS, the Federal Government would set a limit on the amount of carbon Australian industry can emit – this is commonly referred to as “the cap”.
Companies that emit more than 25,000 tonnes of carbon dioxide (or its equivalent) per annum are then allocated, or have to buy, permits or credits which represent the right to emit a specific amount. The total amount of permits allocated across Australia is equal to the total amount of carbon which is allowed to be emitted by Australian industry.
Companies which emit more carbon than they have permits for must buy permits from companies that emit less carbon than the number of permits they hold. This transfer is referred to as a trade in emissions or the “carbon market”.
In order to reduce national emissions, the Government will decrease the number of permits over time and this will see the price of emitting carbon increase.
For more information about the CPRS and the guiding principals of it, click here.
What is the National Renewable Energy Target?
The National Renewable Energy Target (NRET) is separate from the proposed Carbon Pollution Reduction Scheme, or ETS. The NRET is designed to increase the production of renewable energy in Australia’s electricity supply. To achieve this, organisations which buy wholesale electricity will have to source an increasing percentage of their electricity purchases from renewable sources. This is implemented by those companies having to buy and surrender renewable energy certificates (RECs) in proportion to their purchase of electricity. Alcoa would still have to buy RECs even though we would not be able to run our operations on renewable energy. Due to renewable energy being higher in cost than other sources, the RECs come at a significant cost premium.
The NRET has actually been in place since 2001 but the Federal Government is planning to significantly increase the existing arrangement. It has announced a target that at least 20% of Australia’s energy production will come from renewable sources by 2020.
For more information on the NRET click here.
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Video: Alcoa & Climate Change
Watch Managing Director Alan Cransberg and Sustainability Manager, Tim McAuliffe, explaining the climate change challenges to Alcoa employees
 click here
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