It takes ambitious action by all countries to achieve a net-zero-emissions world. The logic of Paris is for nations to commit to the greatest action they can, then keep upgrading those commitments towards net zero as mutual confidence grows and technology improves.
Australia’s national interest lies in everyone driving that positive spiral by going beyond minimalist
compliance with current commitments. If we don’t lift our weight, it takes the moral and political
pressure off emitters of all sizes and makes a global solution much harder.
We can contribute by charting our own course to net-zero emissions by 2050, backing it with policies
that preserve equity and competitiveness, and co-operating internationally to improve technology and promote success.
Australia has many places to start. The federal government is developing a long-term emissions strategy, an electric vehicle strategy and a technology roadmap, it has options to expand its investment in clean innovation. The states all target net-zero by 2050 and are developing plans to deliver; greater co-operation and co-ordination on those plans is needed.
The next integrated system plan for the national electricity market will be finalised in June. Internationally, Australia has joined a collaboration on harder-to-decarbonise industrial sectors, and Britain is asking all nations to bring deeper emissions commitments to the Glasgow climate
summit in November.
Policy-making needs a clear sense of what matters and what doesn’t. Being seen to “do something” is not enough. Quality matters. The policy principles offered by the Australian Industry Group and the Australian Climate Roundtable – a broad alliance of major Australian business, environmental, farmer, investor, union and social welfare groups – should guide any policy. It covers environmental integrity, economic efficiency, trade competitiveness, social equity and more.
Electricity is already transitioning, but badly needs clear, integrated, long-term climate policy to attract sufficient investment to meet our needs and support net zero. But the rest of the economy accounts for two-thirds of Australian emissions and needs workable pathways too.
Trade matters. Losing competitiveness via uneven international climate policies has long been our
greatest reservation about Australian efforts. Different trade risks are now also opening up: Europe
pushes climate in trade deals, and is developing a carbon border adjustment – potentially, tariffs on
Smart policy design can manage these trade risks, allowing Australia to show leadership while maintaining competitiveness. Some current shibboleths may be dispensable. Carry-over credits for past over-performance don’t help with the long-term transition to net zero, and controversy over them threatens to shut Australia out of international co-operation.
The aversion to a carbon price should be rethought. What justifies it today beyond the inertia of past politics? Carbon prices are key policies for major economies on every continent except Antarctica – and Australia. An emissions trading scheme for China’s huge power sector starts this year.
Should Australia rely solely on government regulation and public spending to reform our economy? Many different pricing models are available, not only those developed by former prime ministers John Howard, Kevin Rudd and Julia Gillard.
We need creative thinking. The fate of Australia’s fossil fuel exports lies ultimately with our customers’ decisions about their energy systems in light of changing technology and preferences. We need to be ready for those decisions. The recently announced national hydrogen strategy is a great first step towards an economic hedge. It is an industry whose growth prospects are the inverse of the expected long-term decline in fossil exports in a world that successfully limits climate change.
The trauma and tragedy of the bushfire crisis is shaking climate politics and policy out of its rut.
Evolution is needed. And all of us have a responsibility to shape it.
Innes Willox is the chief executive of the Australian Industry Group.
Innes Willox is chief executive of the Australian Industry Group.
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