CMI Policy Position: Australia can, and should rise to the climate challenge…

bradkerin Market Intelligence

by Brad Kerin, General Manager of the Carbon Market Institute.

Once again we find ourselves hurtling towards an election cycle where climate change will be front and centre. Although with differing levels of ambition, politicians on the left and the right are starting to converge, with both parties recognising that climate change policy is a platform upon which federal seats may be won or lost.

Voters – and those not yet old enough to vote – are demanding credible climate and energy policies, and campaigning that doesn’t reduce this global issue of environmental, economic and social significance to a political football. Elements of the policy scare campaigns we have seen in recent years are emerging, however the general population’s tolerance for this style of campaign is waning. Australians, and Australian businesses are becoming more aware.

Globally there continues to be a trend towards long-term net-zero emissions reduction targets with countries and regions setting ambitious targets out to 2050. Similarly, organisations are redefining their strategies to address climate change risk and are progressively setting internal emissions reduction targets and carbon prices to manage future liability. There is widespread recognition in the business community that domestic policy settings will have to tighten in the near future, and that this will inevitably include a form of emissions trading and a carbon price signal, as well as the opportunity to link and trade in international markets.

As per our commitment to the Paris Agreement, our 2030 target is a floor, and so in future years will need to be reviewed and strengthened in line with a formal Global Stocktake process that countries agreed to in Paris. It is critical therefore that we have a comprehensive suite of policies in place that can endure beyond multiple political cycles, and enable business and industry to make an orderly and just transition towards the future net zero-carbon economy that is already starting to emerge.

And so, as political campaigning begins, we find ourselves looking for inspiration across the oceans, where strong action is being taken by nations, states, cities, businesses, investors, communities, landholders and first nations peoples – all of whom have a reason to fight against climate change. Here at home, we face increasing droughts, flooding and storms, and increasing national emissions.

And our children are marching in the streets.

It is in this context that the Carbon Market Institute calls on all sides of politics in the lead up to the next federal election, to outline and explain how their suite of climate and emissions reductions policies will get us to our Paris target of 26-28% below 2005 levels by 2030, and towards a net-zero emissions goal by 2050.

The Carbon Market Institute’s key policy position below can help to inform parties and candidates’ long-term climate policies; incentivise emission reductions across the economy; and strengthen our nation’s response and resilience to the increasing threat of climate change.

  1. To play its role in meeting global emissions reduction under the Paris Agreement, Australia should define a long-term goal that leads to net-zero emissions by 2050.
  2. To reduce absolute emissions across the economy, Australia should explicitly confirm that it will not use Kyoto carryover units towards its target, as this does not represent absolute emissions reductions post-2020, and goes against the spirit of the Paris Agreement.
  3. Any future public funding of Australia’s domestic offset industry will be insufficient unless it is used as to help transition the industry to a market driven by private-sector demand (as under an evolved Safeguard Mechanism).
  4. Australia should scale up the domestic offset scheme to create real abatement across the landscape, and generate jobs, revenues, and additional benefits for regional and rural communities as outlined in CMI’s Australian Carbon Farming Industry Roadmap.
  5. Through investment in R&D, Australia should expand existing, and introduce new ERF methodologies to increase the supply of offsets available to meet future demand domestically and internationally.
  6. Australia should transition the Safeguard Mechanism to more effectively drive emissions reductions across the economy (as per CMI’s recent Transitioning the Safeguard to a Baseline & Credit ETS discussion paper).
  7. Australia should confirm the use and eligibility requirements of international units for compliance under an evolved Safeguard Mechanism, to maximise opportunities to achieve our emission reduction targets at lowest cost.
  8. Australia should research and model the factors affecting future availability, supply and demand for domestic and international units as countries implement their commitments made under the Paris Agreement.
  9. Australia should identify how it could be part of internationally linked carbon markets as they evolve under the Paris Agreement and should engage in the international discussions to clarify the conditions, process and pathway to open up opportunities for the export of Australian Carbon Credit Units into other markets.

We should expect real climate policy and action from our policy leaders, and demand clarity from candidates and parties in the lead up to the federal election. Climate change affects us regardless of nationality, geography or ideology, and it is our responsibility as the last generation that can do something about it, to do something about it.

Children are marching.

It’s time our leaders take action too.