Australia unprepared for higher energy prices: report

Australian business are woefully under-prepared for rising energy prices, which may be exacerbated by the government’s planned carbon tax, according to a report by manufacturers’ organisation Australian Industry Group (AIG).
‘Energy costs have already risen substantially for most businesses over the past five years, and there is no end in sight,’ said the report.
‘A range of factors point relentlessly upward, from massive network investment to movements
in international markets to the increasing role mandated for higher-cost renewable energy.’
It found that two thirds of companies had made no improvements in energy efficiency during the last five years, despite rising prices.
‘Australia is far from alone in confronting rising energy costs, but the challenge is serious given our historic reliance on cheap energy as a competitive advantage,’ said the report.
The country’s Labor government, which relied on the Green Party for its parliamentary majority, has promised to introduce a carbon price by July 2012, but has yet to set out details of the policy.
‘A well-designed carbon price could eliminate the policy uncertainty that is damaging investment in new electricity generation, and reduce reliance on the high-cost renewable energy target,’ said the AIG report.
‘This would soften the blow of a carbon price, but it would remain a big hit.’
Australia has one of the world’s highest per capita rates of carbon dioxide emissions, thanks to heavy reliance on coal for electricity generation.