Viticulture– Carbon introduction Site / company name and logo here Presenter/s names here This is an Agrifood Skills Australia Ltd project developed in partnership with Energetics Pty Ltd and funded by the Australian Government under the Clean Energy and Other Skills Package

Climate change Resource depletion – Energy – Water – Materials Increased emissions, contamination & waste Reduced air quality Loss of biodiversity 2 What is the problem?

How is economic activity affected by climate change? Agriculture, tourism and insurance Directly affected - more droughts, floods and bush fires. Carbon taxes, energy tariffs and emissions trading. To address climate change, emissions must be reduced Impact upon other sectors Energy sector costs flow through to energy intensive sectors – mining, manufacturing Other indirect impacts include Reduced demand for products Disruption to business activities Potential litigation Brand and reputation risk Longer term global impacts potentially: Large scale refugee movement Political instability Social unrest.

Risks specific to Australia Access to Water Australia is the driest continent on earth Many industry sectors are dependent on access to water for operation. Access to Water Australia is the driest continent on earth Many industry sectors are dependent on access to water for operation. Market related risks Climate change risks in other countries may differ remarkably – regulations, consumer behaviour Market related risks Climate change risks in other countries may differ remarkably – regulations, consumer behaviour Energy pricing Low energy costs, greenhouse intensive coal sources Costs to increase – oil prices, carbon, lack of investment, drought conditions Energy pricing Low energy costs, greenhouse intensive coal sources Costs to increase – oil prices, carbon, lack of investment, drought conditions Regulatory uncertainty Carbon Price and Emissions Trading. Uncertainty - difficulty in long- term infrastructure/ asset planning. Regulatory uncertainty Carbon Price and Emissions Trading. Uncertainty - difficulty in long- term infrastructure/ asset planning.

Things to consider when managing carbon – organisational boundaries Decisions must be made as to how emissions will be aggregated. Three approaches include: Equity share Financial control Operational control Operational control is default boundary! What is operational control? Defined in Australian law as the right to introduce or implement operating, health and safety or environmental policies

Things to consider when managing carbon – operational boundaries Scope 3 “Emissions from services You use and products You produce” Nat Gas Petrol Process emissions LPG Scope 2 “Fuel burnt for You” Scope 1 “Fuel You Burn” Electricity

The business case for carbon management – carbon neutrality. Vineyards producing ‘carbon neutral’ wine. Case Study: Temple Brewer - Carbon Neutral “From 2011 onwards all wines produced by Temple Bruer are and always will be carbon neutral. Temple Bruer has achieved carbon neutrality through measuring its carbon footprint through a cradle to gate lifecycle analysis, working tirelessly to reduce our footprint through all means possible and finally purchasing environmental and socially sustainable carbon credits to offset the remainder.. We hope to achieve this through increasing our generation of renewable electricity through a combination of solar with future plans to invest in a pyrolysis plant, Continuing to search for further savings and participating in the Federal Governments carbon farming initiative and further reducing our footprint in any way possible.”

The business case for carbon management – carbon labeling uk carbon trust. Aldi – first company in Australia to introduce Carbon Reduction Labels. Suppliers now required to report GHG emissions commit to GHG reductions Aldi – first company in Australia to introduce Carbon Reduction Labels. Suppliers now required to report GHG emissions commit to GHG reductions Woolworths and the Australian Food and Grocery Council conducting study on benefits of carbon labeling

The business case for carbon management – carbon trading Japan – currently designing ETS that is likely to be implemented in 2011 NZ – ETS started 1 July 2010 China - likely to have an ETS EU – existing ETS may legislate a 30% reduction target UK Coalition - setting a floor price for carbon US – multiple regional ETS’ From 1 July 2012 – Australia has a price on carbon set at $23 per tonne of CO2-e – following a number of other countries NB: Emissions trading works: EU verified emissions showed a decrease of 11% in 2009

The business case for carbon management – carbon price Q: Who pays the Carbon price? Some pay directly eg. Large users of coal such as coal fired power stations Some pay directly eg. Large users of coal such as coal fired power stations Some pay indirectly eg. Consumers of electricity / smaller users of fuels Think petrol excise – you pay, but payment collected upstream Some pay indirectly eg. Consumers of electricity / smaller users of fuels Think petrol excise – you pay, but payment collected upstream

The business case for carbon management – what level of price? What might a carbon price be? Interim tax $23 Introduced 1 July 2012 Permit price 5% reduction target for 2020 = $25 in 2013 Transition to trading scheme (variable price) = $20 - $35 in 2015 Regulation eg. ban on all coal - fired generators (incl. boilers) NB: Very costly for some Costs spread across the economy

The business case for carbon management Experience shows that sustainability makes good business sense Embedding sustainability within an organisation’s broader business strategies frequently results in organisational and technical innovations that generate both top- and bottom-line returns. Reducing inputs to a business, due to a carbon-constrained economy, reduces costs. Reducing inputs requires new or improved products or even new business lines.