Group calls for broader scheme

The Investment and Financial Services Association, which invests more than $1.3 trillion on behalf of 10 million Australians, has called on the Federal Government to allow for an open and efficient market, with transferable emissions permits so an accurate carbon price can be set.

In its submission to the Government's emissions trading green paper, IFSA says the Carbon Pollution Reduction Scheme should be as broad as possible to allow integration with existing and developing schemes and to enable open trading across borders.

"Given the size of emissions from the agricultural sector (estimated to be 16% of Australia's emissions), further consideration of including the sector as an allowable offset generator until it is covered under the scheme is necessary," IFSA says.

The Government's green paper indicates that agriculture will not be included in the first phase of its emissions trading scheme due to the difficulty of calculating emissions, but that farmers will have to offset their emissions from 2015.

The organisation is also pushing for a strong monitoring, reporting and assurance regime to be adopted to ensure that emissions reported under the scheme are accurate and the information is transparent.

"The transparency of reporting is an important aspect for investors as we need to be able to get access to meaningful and accurate data that is reflective of a potential liability to be able to make any meaningful assessments on the way a company may be impacted," IFSA says.

John O'Shaughnessy, IFSA deputy chief executive, said the funds management, superannuation and life insurance industries were aware of the impact of climate change on the wider economy and on the value of investments. He said the Government needed to spread the burden accordingly.

"We therefore support the Government's commitment to move forward on this matter to ensure that a reduction scheme for carbon emissions is managed effectively," he said. "IFSA is of the view that the design of an emissions trading scheme should facilitate market efficiency and integrity and minimise uncertainty, along with the economy-wide costs of reducing emissions."