An unprecedented alliance of business and consumer groups has today released a joint statement on the climate change mitigation that humiliates the Abbott Government and its UN conspiracy-nutters.
The Australian Aluminium Council, Australian Industry Group, The Climate Institute, Australian Conservation Foundation, Business Council of Australia, WWF Australia, Australian Council of Social Service, Energy Supply Association of Australia, Australian Council of Trade Unions and the Investor Group on Climate Change have offered the following joint statement:
Preface
This document sets out principles to guide the development of sound long term policy to address climate change. These principles reflect extensive discussions between the diverse organisations participating in the Australian Climate Roundtable, encompassing business groups, unions, institutional investors, environmental groups, research organisations and social policy organisations. The principles address the goals of climate change policy and the ideal characteristics of policies to meet the goals. The principles spring from the considerable common ground between the existing policy approaches of each group, and have been revised and clarified to ensure that they cover areas of essential need and joint agreement. Each organisation maintains their own existing policy priorities, with which they have judged these principles to be compatible.
Principles, Goal
Unconstrained climate change would have serious economic, environmental and social impacts on Australia. These costs underpin our assessment of the need for action. We recognise the major parties’ bipartisan goal of limiting global warming to less than 2°C above preindustrial levels. Our overarching aim is for Australia to play its fair part in international efforts to achieve this while maintaining and increasing its prosperity. Achieving this goal will require deep global emissions reductions, with most countries including Australia eventually reducing net1 greenhouse gas2 emissions to zero or below. Avoiding unconstrained climate change will provide important benefits and opportunities to Australia. However, emissions reductions on the necessary scale will also require substantial change and present significant challenges for Australia as well as other countries. Delayed, unpredictable and piecemeal action will increase the costs and challenge of achieving the goal. Policy must be well designed to achieve the goal while avoiding these risks. This document sets out principles for dealing with the key issues.
Ideal policy
Policy instruments should:
be capable of achieving deep reductions in Australia’s net emissions in line with our overall goal; provide confidence that targeted emissions reductions actually occur; be based on an assessment of the full range of climate risks; be well designed, stable and internationally linked; operate at least cost to the domestic economy while maximising benefits; and remain efficient as circumstances change and Australia’s emissions reduction goals evolve.
Cost control
Policy should allow Australia to meet its short and long term emissions reduction goals at least cost. To achieve this, policy should:
• drive domestic abatement wherever it is efficient and internationally recognised across all sectors of the Australian economy;
• make use of internationally recognised abatement from overseas to ease the transition towards net zero emissions; • overcome identified market failures and help markets work more efficiently; and
• explicitly account for climate impacts in any assessment of costs and benefits.
Trade competitiveness
Policy should prevent the unnecessary loss of competitiveness by Australia’s trade exposed industries and net increases in global emissions that might otherwise occur due to the uneven international application of climate policies.
Innovation
Policy should stimulate and support research, development, demonstration and commercial deployment of new and improved low-emissions technologies and processes to minimise the long term costs, and maximise the economic opportunities, in achieving the long-term goal.
Equity
Reducing Australia’s emissions and adapting to unavoidable climate impacts, some of which are already here, involves both costs and opportunities. New opportunities for decent work should be open to all in the community. The costs of climate policy should be spread fairly within the Australian community and policy should:
• protect the most vulnerable individuals;
• avoid disproportionate impacts on vulnerable people, low income households and the organisations that support them; and
• assist the successful transition of communities that are especially vulnerable to economic shocks or physical risks as a result of climate change or climate policy.
Equity should be explicitly addressed in the policy design process, including immediate impacts and those on future generations of Australians.
Stability
To attract and sustain investment over the long term, the underlying climate policy framework should be stable, offer predictable processes for important decisions and enjoy broad political support.
Energy sector
Policy should recognise the strategic importance of reducing emissions from the energy sector in achieving the overall goal. It should provide a credible basis for planning and investment by the energy sector and energy consumers, maintain energy security and avoid sovereign risk. While the need to reduce energy sector emissions has been widely anticipated, specific policies may create economic shocks that negatively affect businesses. These shocks should be smoothed without negating the incentives created by the policy.
Adaptation
Some adverse climate impacts are already occurring and more will be unavoidable. Systematic assessment, planning and action are needed to adapt to the range of climate change scenarios we face. Use of revenue Any revenue resulting from climate policy should be used where cost-effective to address legitimate needs directly related to climate policy, and otherwise be returned to individuals and business in ways that maximise efficiency and do not reduce abatement incentives.
Administration
Compliance costs and regulatory burdens should be kept to a minimum. Policy should aim to provide transparent information about its operation and impacts, consistent with commercial expectations and the public interest.
Review
Australia needs regular independent review of its emissions policies, its targets (including their consistency with agreed overall goal, and international undertakings) and the efforts of other countries. This should involve full public consultation.
What a shame the evil empire at the Minerals Council didn’t join in though one half that via BHP is already on the march for carbon trading. And I guess that’s the point. This release is basically everyone else, and the entire policy outline adds up to one simple idea: a carbon price.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
