Scorched by unprecedented bushfires, our nation badly needs a global solution to climate change.
Evolving emissions policy, as the Prime Minister has suggested, can deliver a more ambitious, durable and trade-neutral approach, and get investment flowing to the industry and the infrastructure we need for a prosperous future.
Success requires clarity about what we’re trying to do, and smart policy design that suits the enduring needs of the community and industry.
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| The fire threat will become inescapably worse in a warming climate, but what if global temperatures rise by 3C rather than the target of 1.5C? Credit: Nick Moir |
But an underlying increase in average temperatures and shift in rainfall patterns has made more severe bushfires more likely. That shift is guaranteed to deteriorate.
Australia is currently dealing with a 1C increase in global average temperatures over pre-industrial levels. The goal of the Paris Agreement is to keep the total increase to no more than 1.5C – with significantly greater impacts than today and requiring difficult, costly adaptation.
But the initial set of commitments that nations have made under Paris puts us on course for 3C or more.
Global central banks say that would seriously threaten the world economy. It is absolutely true that Australia (which accounted for 1.1 per cent of global emissions in 2016) can’t halt climate change alone. Nor can China (23.5 per cent), the United States (11.8 per cent) or the European Union (7.3 per cent).
Collectively, emitters of Australia’s size or smaller account for more than 30 per cent.
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 carbon-intensive imports.
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 RBA is warning climate change could lead to the next global financial break down.
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.
Links
- Praise for inquiry but more investigations to come, former fire chief warns
- 'Unprecedented' fires, hail and floods cost Suncorp $674m in claims
- Death by a thousand cuts: the industry doing ‘more damage than mining’
- 'Dire outlook': Researchers call for urgent Australian climate action
- Getting down to the business of evolving Australia's climate policy
- Emergency fire near NSW border likely started by army helicopter
- Australia emits 1.2 per cent of the world's greenhouse gases. So who must act to cut emissions?
- (AU) Morrison Questions Importance Of Global Climate Treaties, To Treat Symptoms Of Climate Change
- (AU) Climate Change Is A Serious Threat To National Security
- (AU) Behind The Smokescreen, The Coalition's Stance On Climate Change Hasn't Changed At All
- (AU) Can Scott Morrison Seize This Watershed Moment For Climate Policy?
- Denmark Floats A Possible Model For Climate Policy
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