Carbon price package - President's comment

Carbon price package - President's comment

In each edition we feature the views of a Local Government Association president. The following is from Councillor Bill McArthur, President of the Municipal Association of Victoria.

In 2011, the Australian Government passed its carbon price package to reduce national greenhouse gas emissions.

While Victorian Councils have diverse views, there is support from Local Government for a carbon price framework to help transition to a low carbon economy.

With budgets already under strain, concerns remain about its effect on Councils' landfill, energy, fuel, building and construction costs.

In 2009, an MAV analysis showed the implications of the proposed Carbon Pollution Reduction Scheme (CPRS) at $25 per tonne of carbon dioxide equivalent (CO2e) was a two per cent increase in Council expenses.

Securing a Clean Energy Future treats landfill emissions and automotive fuels differently to the former CPRS, so the cost impact is expected to be less.

Federal Treasury modelling estimates the carbon price could increase the Consumer Price Index by 0.7 percent. As Councils nationally spend $28 billion annually, the Australian Local Government Association has estimated that expenditure directly linked to a carbon price (excluding costs associated with emissions from landfills) will increase council spending by 0.8 percent.

The MAV is currently collating responses to a 2011 survey update, to better understand impacts for individual councils and the Victorian sector. In coming months we will be providing councils with training and resources to help them transition to the new regime in July.

A number of other Local Government Associations across the country have joined us in this project to expand analysis of how municipalities will be impacted by the introduction of a carbon price.

Landfills are a particularly challenging area, given the complexity of estimating waste emissions now and into the future, despite the carbon liability only applying to emissions from waste deposited after 1 July 2012.

Up to 20 Victorian municipal landfills are included in the 25,000 CO2e threshold, depending upon their emissions profile and use of gas capture.

Councils face higher landfill gate fees and need to consider effective gas capture tools to minimise their carbon price exposure, or bring them under the threshold. The carbon price, plus recent increases in State landfill levies, makes diverting waste from landfills an even higher priority.

For years Councils have responded to climate change challenges by implementing innovative solutions to reduce energy and landfill costs and emissions, and help the community to do the same.

The MAV will continue working with Councils to build capacity to understand municipal greenhouse gas emissions and reduce sector exposure to the carbon price.