The possibility of Australia implementing a carbon pricing mechanism has increased with the release of Australian Federal Government's proposals. The proposals are backed by the members of the 'Multi-Party Climate Change Committee' (MPCCC), which may imply, but not necessarily guarantee, the legislation may pass both Houses of Parliament in the months ahead.

An exposure draft of the legislation to enact the carbon pricing mechanism was released by the Federal Treasurer on 28 July 2011, and is open for comment until 22 August 2011 before being expected to be tabled in Parliament in early Spring.

Given these developments, the key question for companies is what the carbon pricing mechanism announcement means for the current June 2011 financial reporting cycle. The publication sets out some of the considerations of the carbon pricing mechanism for entities as they finalise their June reporting.

Click for Australia's carbon price — June 2011 financial reporting implications (PDF 1123k).