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Australia’s carbon trading to hit energy sector: CLP

| Sourced From Times of the Internet |

Australia’s carbon trading scheme will hit power company profits and cause some disruption to the country’s energy sector, the head of Hong Kong’s largest power firm said Thursday.

Andrew Brandler, the chief executive of China Light and Power (CLP), which provides electricity to around 1.3 million homes in Australia, said the proposed “cap and trade” system would hit the firm’s bottom line.

“There will undoubtedly be dislocation and a period of disruption in the Australian market as a consequence of the implementation of the (scheme),” he said.

Brandler said the firm, which owns TRUenergy in Australia, also saw opportunities in the policy and was expanding its natural gas operations in the country.

However, he said the white paper outlining the scheme suggested “substantial” financial help to big emitters as they moved to reduce carbon emissions, seen as the major contributor to global climate change.

Brandler was speaking at the announcement of the firm’s annual results.

CLP Holdings, with operations in mainland China, India and Taiwan, posted a 1.7 percent fall in 2008 profits to a better-than-expected 10.42 billion Hong Kong dollars (1.34 billion US), on reduced gains from the sale of assets.

However, the company’s earnings remained robust, up 4.6 percent on the previous year despite the global economic slowdown and the introduction of a new method of calculating permitted returns by the Hong Kong government.

Last year, Australia committed to introducing a “cap-and-trade” carbon trading scheme under which the government provides permits to industry to produce a certain quota of carbon emissions.

Companies can then trade their permits, meaning carbon-intensive industries will have to pay extra if they want to exceed their allocation, a system the government believes will provide a market-based incentive to reduce pollution.

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