3 minute read

Emission goals need a national strategy

from AMT AUG/SEP 2023

from AMT AUG/SEP 2023, page 120

THE RELUCTANT GIANT

The passage of the Government’s Climate Change Act last year provided a useful basis for business, government, and the community to work towards ever more challenging emissions goals.

A reduction in emissions to at least 43% below 2005 levels by 2030 has been characterised by the Government as a floor, not a ceiling, in its efforts to plot a credible path to achieving the goal of net zero by 2050.

Upon delivering his first ‘Annual Climate Statement’ last December, Climate Change and Energy Minister Chris Bowen suggested that to reach this target we will need to achieve the same emissions reduction in the next eight years that has been managed in the last 18. Such an ambition will take transformational investments in industry, power, transport and more. Making those investments requires business confidence that the basic framework of public policy will be strong and stable.

In his December Statement, Mr. Bowen detailed advice from the Climate Change Authority recommending that Australia’s Net Zero 2050 plan be underpinned with separate plans for our major economic sectors. And now, in a speech to the Clean Energy Council in July, he has outlined his next steps.

Mr. Bowen announced that the Government will begin developing six sectoral plans:

1) Electricity and Energy;

2) Industry;

3) the Built Environment;

4) Agriculture and Land;

5) Transport; and

6) Resources.

The waste sector will be included both in the industry plan and as part of a focus on the circular economy that will be a crosscutting issue for all sectors.

In making his announcement, Mr. Bowen foreshadowed “heavy rounds of engagement with the community on each plan,” suggesting that “the level and quality of dialogue and collaboration with industries, experts and citizens will set these plans apart from anything that’s been done before.” This period of consultation will take shape as part of an 18-month review.

Such dialogue will be crucial if the Government’s plans are to succeed. Setting Australia up for success on our next round of climate goals undoubtedly requires a wider canvas, stronger dialogue, and more openness than we have seen in the past.

Physics, national interest, and the terms of the Paris Agreement mean that Australia's emissions reduction goals will keep deepening, all the way to net zero and most likely beyond.

But equally, arithmetic dictates that industry and the electricity sector cannot achieve these targets alone. While recent debate has focussed on the Safeguard Mechanism and power sector initiatives like the Capacity Investment Scheme, a much wider swathe of the economy will need to make investments and change practices to hit more challenging emissions numbers for 2035 – Mr. Bowen expects to receive advice from the Climate Change Authority on recommended 2035 targets by late 2024.

Industry, power, transport, agriculture, construction, resources, and waste all have much to do, as do consumers and households.

Practical plans for all those sectors cannot simply be imposed from above. They must emerge from deep dialogue and partnership. In the Australian Industry Energy Transitions Initiative, major enterprises in several key economic sectors collaborated with researchers to map their transition pathways and the areas where government action will be needed. Policy has an important role, but it will be undirected and ineffectual without insights and investment from businesses and other stakeholders in each sector. aigroup.com.au

The 18-month review announced by the Government must be as thorough and inclusive as it looks in the sketch of Mr. Bowen’s speech to the Clean Energy Council. There is no room for a repeat of the sins of the past, where openness to insights from outside Parliament took a back seat to manage tensions within it. It would be good to move on from many old failings. Nuclear energy is a fraught subject but too important to be left to empty fights over symbolism. New nuclear technologies combine intriguing potential with formidable delivery and economic challenges. It makes little sense to continue simply banning them, but mere legalisation is no substitute for a comprehensive and investable climate and energy policy for all technologies to compete under. Putting all your eggs in one basket is a bad idea for any side of politics. As we have seen with State goals in NSW and Victoria, 2035 targets are likely to be significant steps up from 2030. Our prospects for achieving that will be strongest with a national strategy that ties together sectoral insights with whole-ofeconomy coherence, backs technology with robust policy, and keeps a close eye on trade competitiveness. It's a tall order, but this is not optional.