Why climate change remains relevant for business – and our new parliament

bradkerin Market Intelligence

by Peter Castellas, Chief Executive Officer of the Carbon Market Institute.

As we enter the first week of the new parliamentary term, acting on climate change cannot afford to slip down the political agenda.
No doubt, there are other priorities signaled by the Government that will occupy the initial “argy-bargy” between parties as they settle into the rhythm of the new political set up. However, it is becoming increasing clear in the interactions I have with business that two issues dominate the discussion – a) the need for long term policy certainty and b) the need for bipartisanship on climate policy.
As we have kept the same climate policy from one election cycle to the next, we arguably have more certainty on the policy framework than any other time in the last ten years. That said, the architecture of the ERF and safeguard mechanism is in place, but how it evolves to become a true well-functioning market mechanism, and makes a substantial contribution to our 2030 target is not clear.
The proposed 2017 policy review will need to detail the conditions and criteria to set the downward trajectory of the emission baselines of the safeguard mechanism so that as a minimum they correlate to the 26-28% target the Turnbull government has committed to. With the agreements made in Paris the new goal post is 2030 and so we need the policy frameworks set so we have certainty, at least out that far.
After connecting with all the key non-Coalition politicians in the last few weeks – Mark Butler, Nick Xenophon and Richard Di Natale – I am convinced that they all have a genuine intention for Australia to move to a strong united national position where we accelerate the momentum to capitalising on opportunities in the transition to a low carbon economy. Bipartisanship from the major parties and support from the minor parties on climate policy should be a goal of this government over the course of this term. The 2017 policy review can be a valuable starting point for constructive engagement with not only business but across party lines.
With clearer long term policy frameworks and a united political position on climate policy we will can unlock significant private sector investment and innovation and ensure Australian business can optimise its position in the low carbon transition.