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uch as possible by improve our environment-friendly equipment and other releasing management control. Moreover, because of the high carbon tax, the product price would also be increased and the sales revenue would change as well.

2.2 Overview of Emissions Trading Scheme
Besides the carbon tax, the emission trading scheme is also announced by Australian government. In order to control climate change effectively, a limit of emission will be placed on rights on emission greenhouse gas to the atmosphere. According to the scheme, every company will get their limits of emission. If the emission exceeds their limits, lots of money would be charged.
Moreover, the emission trading scheme is a market based scheme that allows parties to buy and sell permits for emissions or credits for reductions in emissions of certain pollutants. There will be an instrument traded under the policy between the seller and buyer in the “emission market”.
Due to the new regulation, Kagara Ltd will suffer from huge differences. The limit of emission will influence the budget of outputs, the profit margin of products and the improvement equipment which could reduce the emission of greenhouse gas. The researches and development on the method of greenhouse gas emission, greenhouse gas recycle and greenhouse gas filtration also will be made.

3. Effects on Income statement of companies
The application of Carbon Tax and ETS probably increase the costs of Karaga Ltd. As mentioned before, the government will charge carbon tax as about $20 per tonne of the carbon emissions. Meanwhile, the ETS will encourage the air-polluted companies to reduce their Green house gas emissions. Therefore, as an ore production firm, Karaga Ltd’s revenues and expenses will be adversely affected by the ETS and Carbon Tax.
Kagara Ltd (2010) suggests that the management of this company had been considering the environmental effects as the report stated that ‘the Consolidated Entity’s operations are subject to various Commonwealth and State laws governing the protection of the environment in areas such as air and water quality, waste emission and disposal, environmental impact assessments, mine rehabilitation and access to and use of ground water’. Despite the fact that Kagara Ltd had successfully reversed the big loss of 94 million in 2009 to net profits of 3.7 million in 2010 (Kagara Ltd, 2010), the carbon tax and ETS will adjust the revenues earned to a lower level in the year end. To keep the profits, it seems like a good option for Kagara Ltd to increase its product price to compensate its extra costs resulted from carbon tax and ETS. However, some conditions should be considered that Kagara Ltd is a small based mineral company. It is difficult for Kagara Ltd to raise its price while its peers keep the price stable. The reason is that when comparing with its peers, such as BHP, Rio Tinto, Kagara Ltd occupies only a small proportion of market share. The share price of Karaga Ltd is just less than $0.6, while BHP’s is over $40 and Rio Titon’s price is about $80. Therefore Kagara Ltd does not have the significant power to define the price. If Kagara Ltd increases the price unilaterally, it is obvious that many of its customers will be lost. Hence the adjustment of price must be of kind negatively influence, which leads to the loss of revenues.
Another choice for Kagara Ltd is applying some new technological equipment to reduce 本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。