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Climate Change and Sustainable Business Future in the Australian Energy Industry


Unsustainable practices in energy production and utilisation have brought about a number of adverse environmental issues globally. In the past, environmental laws in Australia significantly overlooked the consequence of energy production as well as consumption, with energy viewed as being of little importance to the progress of sustainable development. This, as highlighted by Lyster & Bradbrook (2006), has significantly changed since the year 2000 especially due to mounting international concern over the issue of climatic change.

According to the Local Government Association of South Australia (2014), climate change is an issue that does not require an introduction. Climate change is widely viewed as among the gravest environmental issues that the world currently faces. As such, as Cosier (2004) highlights, there is no doubt that the issue of climate change and sustainability is continuing to dominate not only government but also corporate agendas throughout the globe. The likely economic climatic change implications on businesses are receiving significant attention as well as recognition, with various investors and stakeholders urging companies to not only identify but also assess and publicly report the economic implications that the climate change issues has on their businesses.

The significance of sustainability currently goes beyond issues relating to the environment and extends to social and economic requirements to act responsibly. This has turned out to be not only a significant aspect of maintaining brand and looking for/seeking good growth but also a significant strategy and operations aspect. Businesses are for instance, not only dealing with regulatory impacts but also dealing with significant expectations (for action) from various stakeholders including investors, customers, lenders, suppliers, employees and even the local community. It is within this backdrop therefore that this particular paper intends to provide an analysis on climate change and a sustainable business future in the Australian energy industry.

The Current State of the Australian Energy Industry

largest liquefied natural gas exporter in the year 2012.The nation is heavily-dependant on fossil fuels and ranked among the world’s most coal-dependant nations within the globe in as far as its major energy consumption is concerned. rd largest exporter of coal in terms of weight during the year 2011 as well as the 3nd Australia as a nation is richly endowed with commodities including uranium reserves and fossil fuels and is among a few nations in the world that export significant net hydrocarbon, exporting approximately more than 70% of its entire energy production (ABARE & Geosciences Australia,2010). According to the Bureau of Resources & Energy Economics (2011), the nation was the globe’s 2

Natural gas, coal and other oil-based products currently form the major sources of the nation’s energy consumption, irrespective of the reality that the Australian oil industry emits about 38 percent of the nation’s entire greenhouse gas emissions. In the year 2011, for instance, oil represented approximately 36% of Australia’s energy consumption. Coal and natural gas, on the other hand, accounted for about 33% and 25% of consumed fuel, respectively, with renewable energy sources such as wind, hydroelectricity, biomass and solar that are often consumed or used on a smaller scale, accounting for approximately 6% of the entire consumption (Australian Government, Department of Resources, 2013).

(2000) argue that various states, territories and local governments within Australia have certainly committed themselves to various policies and measures aimed at addressing the climatic change issues.Australian Bureau of Statistics
In general, since energy use comprises of over 50% of all the greenhouse gas emissions within Australia, the proficient utilization of energy has been recognized as very significant to the nation’s greenhouse response. The Federal policy is actually starting to change especially after the publication of the Carbon Pollution Reduction Scheme and the Garnaut report, the declaration of the Emissions Trading Scheme as well as the that national mandatory renewable energy targets of about 20 percent of electricity supply within Australia by the year 2020.Notwithstanding the various strategic challenges to its sustainability in light of climate change, the

Strategic Challenges Sustainability in Light of Climate Change

Despite the call for action regarding climate change currently pushing for the mainstreaming of sustainability as key part of business/organization strategy and operations, a number of strategic challenges to its sustainability in light of climate change are still bound. According to Gillespie & Burns (2000), one of the strategic challenges to Australia’s sustainability in light of climate change is lack of a serious implementation of ecologically-sustainable development. Gillespie & Burns (2000) highlight that although the government of Australia has various policies on energy efficiency, greenhouse emissions and renewable energy, these particular policies are often basically limited to either the politicians’ statements or policy documents. In fact, according to Bosselmann et.al (2008), successive governments of Australia have not often been serious about the implementation of ecologically-sustainable development policy, a factor that has without a doubt hindered the sustainability progress. The implementation as Gillespie & Burns (2000) state has been hampered owing to the government over-emphasis on short-term consideration of the national economic development instead of the long-term environmental imperatives. The main efforts of the successive governments have thus been mainly focused on the expansion of energy markets. Australia has thus been unsuccessful in as far as developing renewable energy, promoting energy efficiency and even stabilizing its greenhouse gas emissions. In general, the economy of Australia lacks structural diversity despite its potential to develop high technology.

According to Henderson-Sellers & McGuffie (2011), another strategic challenge to Australia’s sustainability in light of climate change is lack of clear leadership in as far as demonstrating how the issue of sustainability can become a significant part of carrying out business. As highlighted by the State of Queensland, Environmental Protection Agency (2008), the government ought to be in the frontline in as far as the leadership role of assisting individuals to not only understand but also adapt to the long-term physical impacts that come with climates change, as well as to benefit from the opportunities that come with the emissions trading.

However, the apparent lack of leadership among key players within the climate change debate is argued to be stalling progress in as far as sustainability is concerned. The State of Queensland, Environmental Protection Agency (2008) thus highlights that the government ought to display leadership in as far how sustainability can be integrated in doing business, for instance, by including it in the implementation of the various states’ strategic plan.

According to Winefield (2005), one of the major strategic challenges to Australia’s sustainability in light of climate change is related to not only stimulating cultural but behavioural change among the general population as well. As highlighted by Gillespie & Burns (2000), community engagement on issues relating to climate change is not very strong within the nation. In fact, climate change is regarded as an experience that is not easy to comprehend by those who are scientifically-illiterate. The phenomenon according to Gillespie & Burns (2000), is in fact, more often than not, mystified with the ozone depletion issue by a majority of the Australian population. Winefield (2005) therefore argues that for the strategic plan of states to be more sustainable, the state governments ought to come up with an integrated or a comprehensive approach aimed at engaging the Australian community as regards sustainability. These include demonstrating leadership, encouraging/supporting behaviour change, promoting strategic alliances, educating individuals on sustainability, and raising sustainability profile.

Major stakeholders involved, their roles and possible involvement

Given the scope of this issue and the fact that both the actions and operations of the Australian government and the business community have a significant impact that go beyond its people, a number of stakeholders have to be involved in the various decisions relating to the issues of climate change and sustainability. One of the major stakeholders is the sustainability advisory groups comprising of leaders within the fields of environment, corporate responsibility and sustainability. The role or function of this particular group is to offer independent, strategic advice as well as a wide range of opinions so as to attain the best practice in as far as sustainability is concerned.

The Australian community forms another important stakeholder. With its huge population located across its vast geographical area, constantly promoting as well as implementing sustainable practices would be a challenge. On the other hand, these people are the most helpful resource that the Australian government can employ to drive the expected change hence their importance in as far as pushing for climate change sustainability is concerned.

As highlighted by Woolworths Limited (2007), working groups across the business community also form major stakeholder in as far as the push for sustainability is concerned. The role of these people according to Woolworths Limited (2007) is normally to help come up with strategies as regards energy and greenhouse targets, waste packaging, as well as sustainable transport goals or targets. According to Woolworths Limited (2007), members forming this particular group are often drawn from all areas of business in order to help in establishing not only the implications but also practical considerations as regards the targets (goals) and commitments described within the sustainability strategy. These groups are often involved as the implementations plans as well as evaluation tools are developed until the strategy is brought to life.

The government is also a major stakeholder in as far as the push for sustainability is concerned, and as Woolworths Limited (2007) highlights, they have a more significant role in as the debates around sustainability are concerned besides providing leadership. Both the state and territory governments have a significant role in dealing with the greenhouse emissions, including the decision-making relating to energy productions; hence have a significant influence on a great number of activities. In fact, according to Gillespie & Burns (2000), it has been argued that policies administered by the local government often have a significant impact on over 50% of the greenhouse emissions within Australia.

Possible Strategic Responses and a preferred Approach over Time

Given the complexity, the scale as well as the immediacy of the issue of climate change sustainability, one of strategic response, as well as preferable approach would to restructure the Australia’s energy sector (industry) so as to ensure ecologically-sustainable development. This implies that the Australian energy sector ought to ideally be based on diversified and sustainable energy systems. Gillespie & Burns (2000), however, argues that although this kind of reform may be difficult to achieve, it is capable of ultimately securing Australia’s long-term economic interests in addition to helping it protect the global environment. Other than restructuring the energy sector (industry) to ensure ecologically-sustainable development, Garnaut (2011) argues that the government of Australia ought also to increase its assistance with regards to research, development and even commercialization of renewable energy sector beyond the Australian Prime Minister’s Greenhouse package.

Another key strategic response, as well as a preferable approach would also be to not only develop a strengthened but an effectively coordinated countrywide effort on education for climate change sustainability. The major aim of this plan would be definitely to equip all the Australians with the necessary knowledge as well as the skills required to enable them live sustainably. According to the Australian Government, Department of Environment, Water, Heritage and Arts.(2009), this can be achieved through setting out a national action framework that assumes various strategies such as re-orienting the Australian education system to sustainability, harnessing the community spirit to act, and fostering sustainability within business and demonstrating government leadership so as to strengthen the government leadership role in as far as sustainability education is concerned. All these strategies are aimed at or will be in response to not only the needs but also the priorities of education for climate change sustainability.

Moreover, the government of Australia ought to develop foreign or overseas markets for the renewable energy products in addition to developing technologies by means of its not only its aid programs but trade organisations as well. Doing this would strengthen its renewable energy sector besides helping secure its energy markets for the long-term (Diesendorf 2014).With regards to this, Gillespie & Burns (2000) argues that it is not good for Australia as a nation to depend on exporting fossil fuels while competing with other suppliers within the global energy markets. This is because such efforts are only encouraging the depletion of the non-renewable energy resources while retarding the progress of energy efficiency with global pollution of the environment also increasing.

Indicative Timeline

2015 Sustainability Strategy for the Australian Energy Industry




1st Quarter (January-April)

Education/creating awareness

Awareness and education campaigns on sustainability issues in the Australian energy sector

The government in conjunction with environmental agencies and organisations in the energy sector publishing and broadcasting information on sustainability issues in the energy sector

2nd Quarter (May- August

Research and Development

Research directed towards solutions for creating diversified and sustainable energy systems

The government, environmental agencies and businesses to provide funding for research and development initiatives


Restructuring energy sector

Expanding the renewable energy sector

Developing diversified and sustainable energy systems

The government to develop regulations and policies to support sustainable practices in the energy sector


From the above analysis, it is clearly evident that climate change is among the gravest environmental issue facing the world. There is also no doubt that this particular phenomenon is initiating changes in terms of environmental reforms, a factor that has not only brought to light the urgent need for sustainability in terms of resource use but also a recognition of the seriousness of the various challenges facing Australia and the general public concern for the Australian government to act. The paper has generally reviewed the issue of climate change and a sustainable business future of the Australian energy industry. The focus has been on mainly analyzing the current state of the industry, identifying the strategic challenges to its sustainability in light of climate change and finally analysing and discussing possible strategic responses, and a preferred approach over time. On the other hand, and based on the analysis, it is clear that to achieve sustainability, a significant transition or shift to new energy paradigm that is not only based on a decentralized low carbon but also a lower energy consumption. Macro-decisions alone, as highlighted in the paper, cannot(will) never be sufficient to pull the required shift as real solutions exists at the local, regional and micro-level authorities who hold a significant role in as far as achieving the energy objectives are concerned.


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