The Australian Industry Group is urging the Victorian government not to be too ambitious in its next round of emissions targets, due to be announced in the coming weeks, saying a high target could hurt Victorian businesses and give other states a cost advantage.
The Andrews Labor government is considering a 2030 target of between 45 and 60 per cent below 2005 levels by 2030, on the advice of an independent expert panel chaired by former federal Labor minister for energy and climate change Greg Combet.
Under Victoria’s Climate Change Act, the target was supposed to be announced a year ago, but was put on hold after the outbreak of the coronavirus pandemic. It is now expected to be announced within weeks.
AI Group’s head of Victoria, Tim Piper, said his organisation, which represents Australian manufacturers and other emissions-heavy blue collar industries, supported a target “in principle”.
But he said he was worried an aggressive target at the top end of the range would pile costs on Victorian businesses that would make them uncompetitive with comparable states like New South Wales and Queensland – which have less ambitious 2030 targets than the ones proposed by Victoria’s independent expert panel.
“No matter how we look at this, electrification is going to cost the economy money. We want everybody within Australia to be in a consistent framework, rather than having this haphazard [policy],” he said, in a reference to the lack of leadership on emissions policy at the federal level.
“We want to make sure that Victoria is not disadvantaged as compared to what is happening in other states. So if as a result of it, Victorian jobs go, or manufacturers don’t get what they want to get out of it, then it will be counterproductive. We don’t want to have to deliver on a 60 per cent target if New South Wales and Queensland only have to deliver on a 40 per cent target, and therefore their costs are less.”
The Intergovernmental Panel on Climate Change says a global reduction of 45 per cent below 2005 levels by 2030 is necessary if global warming is to be limited to 1.5 degrees.
The Combet review argues that a 60 per cent reduction by 2030 is necessary to be consistent with “well below” two degrees of warming.
This takes into account the fact that many nations – including the world’s biggest emitter China – expect to increase their emissions over the next 10 years. It follows the principle written into the United Nations Framework Convention on Climate Change that wealthy developed nations like Australia have a bigger role to play earlier on in getting the world’s emissions down than poorer developing nations.
All the states and territories have committed to hit net zero by 2050, the long-term goal advised by the IPCC. But most have not put in place a detailed plan to hit that goal, and short-term targets are generally inadequate by the IPCC’s proposed trajectory.
New South Wales, Australia’s biggest state economy and the second biggest-emitter behind Queensland, has committed to reducing its emissions by 35 per cent on 2005 levels by 2030 – well below the IPCC’s recommended global trajectory.
Queensland’s 2030 target is even less ambitious. It aims to reduce emissions by “at least” 30 per cent by 2030.
Western Australia and Tasmania only have 2050 targets, although Tasmania claims it is already “net zero” thanks to its almost entirely renewably-generated power (mostly from hydropower), and other emissions being offset by negative emissions from the land use, land use change and forestry (LULUCF) sector.
The most ambitious interim target belongs to renewables powerhouse South Australia, which is aiming at a 50 per cent reduction on 2005 levels by 2030.
The federal government’s interim target under the Paris Agreement is the least ambitious of all, at 26 to 28 per cent below 2005 levels by 2030. And other than its funding of carbon sequestration projects and research and development, it has little in the way of hard policies that will force emissions down.
Despite Piper’s frustration at the lack of a clear federal framework, he said he was hopeful things were slowly shifting in Canberra.
“We believe that it’s heading in the right direction, and if we’re patient we will get something from a [federal] Coalition government as well, because they will see that the community needs it and the community wants it. At the moment we don’t have that. But we talk probably at least every week with them about what their proposals are.
“I think that they’re understanding that community and business need some certainty. That’s the really important thing. They understand that business needs certainty and I think they’re progressing in that direction. I can’t speak for them of course, but they’re giving us the right sounds,” he said.
James Fernyhough is a reporter at RenewEconomy. He has worked at The Australian Financial Review and the Financial Times, and is interested in all things related to climate change and the transition to a low-carbon economy.