The federal government’s announcement that they are going to review their climate change and energy policy framework is to be welcomed by those interested in seeing sensible, effective outcomes achieved in combatting the very real risks climate change poses to our economy, community and environment.
But it is also imperative that we recognize this is an opportunity – one where we should avoid, at all costs, repeating and continuing the costly and disruptive policy chaos and political point scoring that has impacted investment, electricity prices and energy security over the last ten years.
By the breadth of its Terms of Reference, the review presents us with a clear opportunity to join the host of other countries around the world in choosing a credible pathway to net zero emissions by mid-century.
It is an opportunity to have a real national conversation about modernising and decarbonising our energy systems, backed up by responsible risk management and recognition of the economic opportunities that a world turning to clean energy is offering us. Because, if we have a credible, effective plan for modernising and decarbonising our economy, it will unlock billions of dollars of clean energy opportunities. Indeed, it is the policy chaos and the political point scoring of the past decade that has locked up large scale investment in the electricity sector
And now is the time for us all to recognise that the only certain long-term policy solution to managing the transition to clean energy will be one which has bipartisan support.
The reality is that Australian communities and businesses are already affected by the global shift to clean energy. Hazelwood is closing because its parent multinational company is shifting to cleaner energy. The increasing affordability of clean energy alternatives, as well as international climate obligations, are making investors reconsider traditional approaches. Solar panels and increasing energy efficiency are disrupting the business models of energy incumbents.
The disruption caused by all of these elements creates an urgent need for an integrated national plan to better manage the change that is upon us. A path forward, which is inclusive and factors in the needs of people and businesses, can deliver economically, socially and environmentally for everyone.
The other thing we must keep in mind, when approaching this review, is that focussing too much on carbon pricing detracts from our end goal. Given the history of the political and ideological Â â€˜carbon wars in Australia – Gillardsâ€™ Carbon Tax, Ruddâ€™s proposed Emissions Trading Scheme, Abbottâ€™s Direct Action, and now the possibility of an Emissions Intensity Scheme – the media and the policy commentariat could become obsessed with this. But doing so would substantially risk a failure to examine the rest of the policy framework which is needed to ensure investors return to help fund a modern and decarbonised sector.
We shouldnâ€™t again make the mistake of obsessing over the mechanism without being clear about the decarbonised end we must achieve. For an emissions intensity scheme to work, it will need to steadily drive investment in clean energy that replaces our existing, aging, stock of coal fired generators.Â It will need to send very clear signals to investors.Â If the settings are too weak, it will need other policies, such as clean energy incentives or regulated retirements. We need to consider the full suite.
In recent weeks Australia, with bipartisan support, ratified the Paris Agreement, under which it joined other countries in committing to achieve net zero greenhouse gas emissions, limit global warming to 1.5-2Â°C and increase climate resilience. This means that Australia, and other countries, will need to develop a more credible emissions reduction pathway to be able to achieve net zero emissions before 2050.
In that time, countries with leadership across the political spectrum, like Germany, Canada and the UK, delivered or strengthened policies as well as targets for getting to or near net zero emissions by 2050 and for modernising their energy systems.
As it stands, Australiaâ€™s initial 2030 emissions target is consistent with global action towards 3-4Â°C of global warming. This would still leave our per capita emissions on a par with those of Saudi Arabia and Russia. The fact that this review is considering post 2030 targets is welcome. It should also be used to reconsider our inadequate 2030 targets and help set a more credible emissions reduction pathway to net zero emissions.
This 2017 review and consideration of post 2030 targets will make clear the choices that Australiaâ€™s political, business and community leaders make.
We are now at a significant and pivotal moment – we must decide if we are going to stick with the chaos and point scoring of the last decade, or become a forward-thinking, inclusive nation, intent on managing the risks and grabbing the opportunities of the clean energy future which is our only real choice.
John Connor is CEO of The Climate Institute.