// How will the carbon tax affect your fitness business?

In a bid to clear up the confusion surrounding the carbon tax, Danny Morgan explains how the new scheme will affect you, and provides some practical advice for reducing carbon emissions.

There has been a lot of debate and a little mud-slinging over the government's decision to forge ahead with a price on carbon. A carbon tax will be introduced in July 2012 (moving to an emissions trading scheme three to five years later); the details of this were announced by the Prime Minister and her team in July. While Julia Gillard and Tony Abbott have gone head-to-head, battling over the political, economic and philosophical implications of the tax, the fact is, it is happening; so how will it affect your fitness business?

Why the tax has been introduced

Before we look at the implications for the fitness industry, it's useful to just summarise the reasons for the tax. The debate itself seems to have moved past the 'real and/or man-made?' quagmire that has bogged down action on climate change for so long. The general acceptance that climate change is real and that we should do something about it was a necessary step forward.

As complex as climate science is, the solutions to combat global warming require a comprehensive approach free from political agenda – although politics is where major changes can occur. The underlying basis for a price on carbon dioxide (CO2) emissions is that it incentivises cleaner alternatives through increasing the price of older emitting technologies, curbing the extent to which climate change will affect us, which would ultimately cost us more in the long term. Although both the tax and the actuality of climate change itself are disputed by some individuals and groups, it should be noted that the Australian Industry Group (AIG) and the Business Council of Australia (BCA) representing industry groups have expressed a preference for a price on carbon.

Other countries with a carbon tax include Finland, the Netherlands, Denmark, Sweden, Switzerland, Ireland, Costa Rica and India. The list of countries involved in emissions trading schemes (ETS) includes many European countries under the EU ETS as well as New Zealand, Republic of Korea (trial) and ten US states under the Regional Greenhouse Gas Initiative (RGGI).

For Australia to have waited any longer for the rest of the world to take action would have been like waiting for everyone else to jump out of a burning building: the longer we waited, the more burnt we would get. With its heavy reliance on coal, Australia needs to safeguard its future in a carbon constrained world. A price on carbon is not the only solution, but will level the playing field for the cleaner technologies and provide significant momentum in the right direction.

Effect on the fitness industry

Does the fitness industry stand to lose from the carbon tax? With the tax being applied to the top 500 polluting companies, which will inevitably pass their increased costs on to customers, it is true that the fitness industry, as with most industries, will bear at least some of the brunt of the tax. This will include:

  • 4 to 7 per cent decrease in profitability for unprepared small business
  • Rise in the price of some goods and services.

It's not all doom and gloom though, and saving the planet doesn't have to cost the earth. Here's how you can reduce your facility's carbon emissions and your energy costs.

Download 'green' posters for your club
Every little helps when it comes to reducing the carbon footprint of your fitness facility. Network's range of posters featuring energy saving tips for gyms and training studios can be downloaded or printed from the Club section of the Network Member Gymbag at www.fitnessnetwork.com.au/gymbag

Energy efficiency
Energy efficiency is the simplest, cheapest and most effective way to reduce carbon emissions and electricity bills. Within the fitness industry the majority of electricity consumption is created by lighting, air conditioning, entertainment and heating water for showers.

Simple strategies to significantly reduce electricity consumption include:

  • Retrofit energy efficient lighting and appliances.
  • Set the thermostat on the air conditioning to a sensible level of approximately 24 to 27°C in summer and 18 to 20°C in winter. Each 1°C increase in winter or decrease in summer can add up to 10 per cent to your electricity costs.
  • Educate members about how much time they spend in the shower and encourage them to limit it to four minutes.
  • Switch off equipment when it's not being used.

Energy efficiency initiatives are an effective low cost way to reduce electricity bills, engage members and promote social responsibility within your facility. Gyms are sometimes criticised for being impersonal; engaging your members on the environment is a very effective way of developing a sense of community. And who knows – with the TVs off, members might even speak to each other more often!

Carbon offsetting
Carbon offsetting is a process that allows organisations to neutralise their unavoidable climate change impact by purchasing verified carbon credits. Carbon credits are generated by new renewable infrastructure projects that avoid greenhouse gas emissions and displace polluting alternatives. A carbon credit represents the abatement of one tonne of CO2 equivalent gases from our atmosphere. Businesses can promote and validate their offsetting actions through creditable certification programs such as the NoCO2 Certification Program overseen by the Carbon Reduction Institute.

Use of renewable energy
Fossil fuel is, effectively, stored sunlight. Oil and coal is fossilised plant matter that has held the sun's energy underground for millennia. There is 20,000 times more energy hitting the surface of the earth in the form of sunlight every minute than humanity uses in a day! Solar panels are made up of semiconductor materials that absorb photons, i.e. sunlight. Solar panels can generate electricity or heat water, which is great for the fitness industry. The lifespan of a high quality solar energy system is about 15 to 25 years, and many gyms have large rooftops that could accommodate an extensive solar array.

Technology also exists for generating electricity that relates specifically to the fitness industry. Consider all the energy being expended on the gym floor on a busy night. In your average gym all that energy isn't being used – it's just being dissipated as heat. There is exercise equipment available that can capture that energy, convert it into electricity and use it to power the building. A handful of gyms around the world are trialling this equipment and the results are promising. A person of average fitness exercising at a moderate pace on an exercise bike can maintain about 50 watts of electricity; enough to power three laptops. In larger gyms, the combined effort of members would easily power lighting and sound.

More group exercise
Group classes are not only an excellent fitness and retention tool, they are also much better for the environment. Thirty people in a room with a stereo will use far less electricity than thirty people in the cardio theatre with their own personal screens – and they will probably work a bit harder too!

Marketing benefits
Governments, corporate companies, manufacturers, service providers and retailers are all taking steps to become energy efficient. More and more organisations are realising that reducing carbon emissions equates to more efficient operations and lower operating costs, and promoting these actions attracts new business and gains a competitive advantage. In the fitness industry, being able to communicate environmental credentials provides a powerful marketing edge, particularly in postcodes with a high green demographic.

Health and climate change

Climate change is close to home for the fitness industry because we can't have healthy bodies without a healthy planet. The obesity epidemic and climate change are two closely related issues as they have both been driven by technology and overconsumption. Fifty years ago people had to move their bodies in everyday life; walking places and doing manual chores. Advances in technology, combined with eating too much of more readily available 'bad' foods, has contributed to increased laziness and obesity. We use vast amounts of fossil fuel to power things we do not really need and this contributes to climate change. Too many people don't walk to the shops anymore; they drive the car. Too many kids have ditched playing sport in favour of playing video games. And because of its negative impact on incidental exercise, people are often psychologically dependant on technology to exercise.

Nobody is advocating a return to the Stone Age, rather a smarter way of doing things. Humanity needs to find balance between our bodies, our planet and our economy. The fitness industry could play a huge role in facilitating this shift. We are already halfway there because we help people achieve healthy bodies and we are in the business of education. A huge part of what we do is educate people about health, exercise and nutrition, which is essentially energy management.

Let's broaden our scope to educate members and clients about the health of our planet. It makes sense: what is the point of helping people achieve healthy bodies, if the facilities we do it in are unnecessarily polluting our environment?

Industries fail to create the future not because they fail to predict it, but because they fail to imagine it. The fitness industry is perfectly positioned to turn the threat of the carbon tax into a powerful opportunity – and those that do not will be left behind.

Danny Morgan
A retired professional boxer, Danny has worked in the fitness industry since 2001 as a trainer, group fitness instructor and course presenter. He owned and operated Surry Hills Boxing, Australia's first eco-friendly gym that generated its own renewable electricity from exercise bikes. Danny has now launched a pilot project with Sydney City Council and works for the Carbon Reduction Institute, Australia's leading climate change consultancy. For more information email dannym@noco2.com.au or visit www.noco2.com.au