Deeper targets achievable with hard work

“The more ambitious emissions reductions proposed by the Federal Opposition, and already adopted by most States, can be delivered with sensible policy reforms, greater collaboration, and a close focus on industry competitiveness,” Innes Willox, Chief Executive of national employer association Ai Group, said today.

“Australian industry competitiveness requires successful transition to the emerging net zero emissions economy. At Glasgow we saw further confirmation that our major trading partners and allies are committed both to long-term net zero and deep mid-term emissions cuts. Business is reminded every day that customers and investors increasingly demand low-carbon products and credible pathways to zero.

“A 43 per cent cut by 2030 would be consistent with our trading partners and the directions industry has called for. But just as important as where we’re going is how we get there. No matter who forms Australia’s next Federal Government, the call for greater ambition will need to be answered and the challenges of achieving it will need to be navigated.

“Industry options for low, zero and negative emissions are growing ever more tangible. Global technology cost trends will put wind in our sails. But the large lumpy investments needed to transition Australian industry to new processes and facilities remain a big leap. Ambitious, predictable and efficient policy frameworks remain essential for making that leap possible for industry.

“Building on the existing Safeguard Mechanism is an obvious place for any Government to start. While hardly the perfect climate policy tool, the Safeguard is a familiar system established and refined by the current Government over the past seven years. Industry has long expected that sooner or later baselines would ratchet down to drive abatement. Making that reduction firm and predictable can help underpin transformative industry investments.

“Complex work will be needed to ensure an evolved Safeguard is simple to participate in, equitable in operation and efficient in effect. Trade competitiveness needs to be secured all along the road to a net zero emissions economy. Sorting through the many detailed design options to that end will require deep consultation with industry and other stakeholders.

“We should be neither fearful nor complacent about accelerating carbon cuts. The nature of carbon budgets means that if emissions merely glide down now they would need to power-dive later. By lifting our 2030 ambitions we reduce the burden of adjustment that we leave to post baby-boomer generations.

“Emissions have already fallen further, faster and more easily than most expected thanks to improvements in energy efficiency, shifts in the pattern of economic growth and steep falls in the cost of renewable energy. We will be surprised again, and on many fronts.

“But bending the arc of emissions reduction will require working both harder and smarter. As the States and the Commonwealth increase their ambition there is scope for much greater coordination between them. Building a new energy advantage will be much harder if the National Electricity Market continues to fragment. It will be much easier if transport electrification, hydrogen industry development, power network planning and built environment policy work together towards an agreed coherent strategy.

“That is a challenge for all Governments and alternative Governments in Australia. Industry is ready to work with them to make this transition successful and secure Australia’s future prosperity,” Mr Willox said.

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