The federal government today provided details on the next steps for its 2050 Net Zero Plan, including its intention to roll out six targeted sector-specific plans to drive down emissions across the economy. The sector plans will feed in to both the Net Zero 2050 plan and a stronger 2035 target, to be advised on by the Climate Change Authority in 2024 and submitted in 2025.
The Carbon Market Institute (CMI) welcomed the update as a timely acknowledgement of the greater coordination required for an increasingly ambitious, and economy-wide approach to reducing Australia’s emissions beyond 2030. CMI noted the importance of at-source decarbonisation, but highlighted the complementary role that market-based approaches can play in maximising investment across all sectors.
CMI CEO John Connor said the announcement is a positive step forward and reinforces the breadth and scale of the task ahead, and its importance to Australia’s national interest and competitiveness in the global race to net-zero emissions:
“This is a significant economy-wide challenge and opportunity we are facing at a time of escalating global climate impacts and transition to net zero, and it requires an ambitious economy-wide response. We welcome this approach as an important step in mapping out an increasingly ambitious emissions reduction agenda, which should not only include robust long and medium-term targets, but also address pathways for key sectors,” he said.
“While sectoral plans are crucial to guide longer term investment strategies, they should be supported where appropriate by market-based mechanisms that encourage investment across each sector and the broader economy, while supporting an efficient pathway towards net zero.”
“As we have called for in recent government submissions, this will require a coordinated and considered approach, in the form of a National Carbon Market Strategy, which can better guide the integration of carbon and other environmental markets into Australia’s climate policy suite and inform their role in relevant sectoral transition pathways. This could be a standalone strategy, or even better, one integrated into the interim and 2050 plans.”
CMI’s recent submission to Climate Change Authority called for a 2035 emissions reduction target of well over 70% below 2005 levels, as well as a number of other measures to accelerate decarbonisation across the economy. These included:
- considering measures to guide deeper structural transition – such as through a regulated, planned approach to phasing out fossil fuels – done in a way that ensures businesses remains globally competitive and the interests of workers and communities are supported.
- using government purchasing of ACCUs to strategically support projects that rely on emerging technologies such as carbon removals, or that have social and environmental co-benefits, or that partner with First Nations groups.
- introducing an EU-style Carbon Border Adjustment Mechanism (CBAM) to protect the competitiveness of Australian industry.
- evolving the government-run Climate Active program so that it more closely aligns with net-zero best practice guidance while still encouraging companies to utilise carbon credits to address their emissions whilst they pursue science-aligned interim decarbonisation targets.
- making sure that voluntary action taken by companies and other organisations may be claimed as additional to Australia’s international emissions reduction commitments whilst mitigating risk of any double counting where companies face compliance obligations.
- developing a national carbon market strategy, which would provide important guidance on the evolution of carbon and nature markets, and on Australia’s participation in international carbon trading initiatives.
- developing a clear strategy for the agriculture sector, carefully balancing the sector’s own net zero transition against the opportunities for it to support the broader economy transition through sequestration.
- facilitating consistent ways to report scope 3 emissions through NGER and Australia’s mandatory climate disclosure framework.
- Incorporate transition planning guidance into Australia’s mandated climate-related financial disclosure framework to guide high integrity outcomes.
About the Carbon Market Institute
The Carbon Market Institute (CMI) is a member-based institute accelerating the transition towards a negative emissions, nature positive world. It champions best practice in carbon markets and climate policy, and its over 150 members include primary producers, carbon project developers, Indigenous organisations, legal, technology and advisory services, insurers, banks, investors, corporate entities and emission intensive industries. The positions put forward constitute CMI’s independent view and do not purport to represent any CMI individual, member company, or industry sector.
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