Most businesses support stronger long-term ambition on climate action, including facing up to the task of a managed fossil fuel phase-out, according to a Carbon Market Institute (CMI) survey on business climate action and attitudes toward climate policy. However, despite increasing support for deeper emissions cuts in the medium term, the results still reflected a level of conservatism compared to science-aligned targets.
Now its 8th year and surveying over 300 respondents, this year’s Australian Business Climate Survey also explored the impact of recent Safeguard Mechanism and Australian carbon crediting framework reforms.
The survey found that more than two-thirds of respondents (71%) want a managed phase-out of fossil fuels by no later than 2040, involving “careful management to support affected workers and ensure continuity in Australia’s trading relationships”. A total of 89% want a managed phase-out of fossil fuels by no later than 2050.
The survey also confirmed that slightly more than two thirds of all respondents (68%) want Australia’s net-zero target brought forward to no later than 2045.
“The findings show most businesses recognise that Australia must transform its economy, but they want the right policy settings in place to ensure it’s achieved smoothly and in a fair way,” said CMI CEO John Connor.
“Although there are significant challenges that must be navigated and the abatement potential of carbon capture and storage is still to be determined, it’s clear that a fossil-free future forms part of this, and business want help and guidance to manage this over time.”
“The newly appointed Net Zero Economy Agency, chaired by Greg Combet, is an important step in this regard, just as the enhanced Safeguard Mechanism will be in addressing industrial emissions.”
Despite support for ambitious longer term targets and strengthening resolve on medium term targets, many respondents were still more conservative than what scientific recommendations suggest, particularly in respect to the 2035 target.
56% wanted a target of under 70%, and while this represented a significant increase in ambition on 2022 figures compared with 63% last year, it still remains below the 70-75% or more which many in the scientific and investor community have recommended. This year, over a third (35%) did support stronger than 70% reductions, an increase from 29% last year.
“Businesses clearly recognise the importance of reaching net-zero quickly, but the results suggest they lack confidence that the existing policy suite is robust enough – or applied widely enough across the economy – to support a stronger 2035 target.”
“In addition to strong 2035 targets due in 2025, the government’s review of sectoral transitional plans and consultation on its sustainable finance strategy transition plan, will provide important opportunities to build business confidence on this. Government support for new technologies, complex projects and the crediting framework will also be crucial.”
With the commencement of the enhanced Safeguard Mechanism on July 1, this year’s survey explored the impact of the reform on organisations covered under the scheme for the first time.
81% of Safeguard-covered respondents said it had already impacted their organisation in some capacity, including bringing forward on-site decarbonisation investment & options for covered facilities.
Finally, as the government continues to implement the recommendations of the Independent Review into Australian Carbon Credit Units (ACCUs), respondents rated the current robustness of the scheme at an average of 7 out of 10 – a one point improvement from 2022.
“This is an indication of improved business confidence in the scheme, but also a reflection of the work still to be done in implementing the remainder of the changes in the government’s ACCU Implementation Plan and Discussion Paper, which is currently under consultation,” concluded Connor.
In other key findings:
- 64% supported Australia imposing a Carbon Border Adjustment Mechanism (27% unsure)
- 45% of respondents said there was insufficient policy and regulatory guidance on their role in corporate decarbonisation
- 92% of all respondents called for the government to develop a national carbon market strategy to provide more effective guidance
- 80% said the Safeguard Mechanism should eventually expand to an economy-wide scheme
- 71% considered Australia’s level of private investment into climate action to be inadequate, proportionate to its economy
- 75% agreed that Australia’s proposed mandatory climate disclosure regime should ensure that company transition planning aligns with a 1.5 degree pathway
- 69% agreed that Australia should mandate disclosure of company impacts and dependencies on nature
- 80% want an EPBC Act climate trigger, which would mean that all proposed developments likely to emit a large amount of greenhouse gas would need to seek federal environmental approval
- 65% agree that Australia should host a COP in 2026.
The full survey can be downloaded here.
About the Australian Business Climate Survey
Since 2014, the Carbon Market Institute’s (CMI) annual Australia Business Climate Survey has been a key barometer of business climate action and attitudes toward climate policy. This year’s survey was completed by 301 respondents, 61% of which were Senior Executives, C-Suite, or Board Members. Of the total pool of respondents, 57% were CMI Members, and 14% of respondents worked for an organisation covered by the Safeguard Mechanism.
The survey data was collected in August 2023 and respondents were asked to give their personal views as individual employees, not necessarily those of their organisation.
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.