Backed by a new team of non-accounting types, a leading big four accounting firm will launch its carbon pollution permit auction
simulator in the New Year to help clients better understand the impact
of carbon trading.
Nick Wood, an associate director in KPMG's sustainability, climate
change and water practice, said: "The biggest thing we are working on
at the moment is to help clients understand the full implication of
the Carbon Pollution Reduction Scheme. We are about to launch one in
Australia for up to 100 clients, which will last for six months."
The simulation is designed for organisations with emissions of 25
kilotonnes a year of carbon dioxide equivalent or more at a facility
level, and also for fuel suppliers to small energy users which want to
be ready to buy and sell Carbon Pollution Permits in preparation for
He said the simulation would be much bigger than the UK version
introduced in 2001. This will be the third such scheme in which he has
participated, having worked on the European Union version.
"The original UK scheme was quite narrow in its focus and the
Australian scheme is much bigger," said Dr Wood, who expects the
simulation to be launched in February.
"It puts people into an arena where they have to do all the things
they would do in the real scheme . . . people take in real live
auctions, they submit bids and we work out what they bought. We then
report back to the companies how cost-effective their carbon
management strategies have been."
Experience in the UK provided insights into the successful
participation in the auction process.
For example, during an auction simulation, some participants bought
permits when they had meant to sell, others purchased too many and
over-invested, while others acquired too few.
A nuclear reactor technology specialist, Dr Wood joined KPMG this year
after having been involved in emissions tradings schemes in Europe
He has degrees in physics and chemistry as well as a PhD in nuclear
reactor technology, and spent three years working on a European acid
rain research program.
"I've been involved in the impacts of energy technology on the
environment, whether acid rain from power stations or nuclear power
and associated issues."
Between 1997 and 2002, he ran his own business, undertaking
environmental awareness training for management and staff in key UK
When the UK proposed an emissions trading scheme, he joined KPMG for a
year as an associate in 2002, before joining another consultancy for
When Australia signed the emissions trading scheme in 2007, he looked
to moving here.
He joined a team in KPMG's climate practice that includes a geologist,
engineer, environmental scientist, marine scientist and several people
with degrees in public policy.
According to KPMG, 85 per cent of the firm's climate change practice
comes from a non-accounting background
The practice has six full-time partners and 12 part-time partners.
Full-time and part-time staff number 25 and 50-60 respectively. Last
year, the number of partners was two, assisted by 10 full-time staff.
In general, the firm is taking on more graduates from non-accounting
backgrounds - 25 per cent of the 2008 graduate intake were
non-accountants while 20 per cent of the 2007 intake were
Meanwhile, fellow big four accounting firm Deloitte warned that the
Carbon Pollution Reduction Scheme White Paper put a multi-billion
dollar incentive on the table for Australian businesses to pursue
energy efficiency more strongly and reduce their exposure to a carbon
Patrick Crittenden, the principal sustainability and climate change
consultant for GHD, warned that with government assistance available
up to the start of the Carbon Pollution Reduction Scheme and the
likelihood of a significant increase in the cost of carbon after the
first few years of scheme operation, "the time for business to plan
and act is now".
"If the government increases the target to 15 per cent [greenhouse gas
emissions reduction] following the outcomes of international
negotiations, then the cost to business is likely to be even more
significant," he said.
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