National emissions trading scheme threatens aged care costs

Hospitals and nursing homes face a $100 million jump in powerbills under a national emissions trading scheme, threatening to compromise future levels of service, unless they are included in government plans for compensation.

Most debate has focused on the appropriateness and scale of compensation for major emitters such as power stations, trade exposed, energy intense industries and low income households.

Australia’s biggest not-for-profit health service provider, Catholic Health Australia (CHA), says it is unable to pass on higher energy costs.

CHA research estimates the greenhouse footprint of each of the nation’s 83,000 hospital beds is about 28 tonnes a year – double the emissions from an average household.

When combined with the emissions from 170,000 nursing home beds and other aged care services, the health sector accounts for about five million tonnes of CO2 a year.

CHA chief executive, Martin Laverty, said there was growing concern that not-for-profit organisations operating in this and other sectors, would be forced to cut services as a result of an emissions trading scheme.

CHA manages about 9,500 hospital beds, 19,000 aged care beds and 6,000 retirement units, and would face an increase in its energy bill of about $10 million a year at a starting price of $20 a tonne for CO2.

In CHA’s submission to the Government’s green paper, it has recommended all Commonwealth or state healthcare funding mechanisms be indexed, to compensate for the flow on effects of a carbon price.

“What it should have done is look at the proper structural impacts across the entire economy, and given the start of the solution.”

A coalition of civil society, representing unions, charities, churches and environment groups, has called on the Rudd Government to spend up to half of all revenue from the sale of permits to assist households and vulnerable communities to cut energy consumption and adapt to higher prices.

A research paper by left wing think tank ‘The Australia Institute’ has warned that the community sector has been overlooked for compensation payments, and could face increased costs in excess of $822 million under the scheme.

A spokeswoman for Climate Change Minister, Penny Wong, said the Rudd Government welcomed constructive feedback from the not-for-profit sector.