The Business Council of Australia welcomes the opportunity to respond to the Climate Change Authority’s Issues Paper: Setting, tracking and achieving Australia’s emissions reduction targets.
One of the key recommendations from the BCA’s Achieving a net zero economy report was that:
“The Climate Change Authority be further empowered and resourced to become Australia’s trusted, independent climate advisory body responsible for advising the Australian Parliament and all governments on all aspects of the national overarching climate policy framework in pursuit of the net zero emission policy goal”.
The scale, breadth and complexity of the transition to net zero has been described as the next industrial revolution by some commentators, and equated with world war mobilisation efforts by others.
As stated in the issues paper, “government has an important role in helping the nation navigate an orderly transition to a resilient, net zero economy”. Government is in a unique position to provide the extraordinary level of coordination and integration required across the economy and the community to transition to net zero.
Australia’s emission reduction targets framework is crucially important because it calibrates the speed of travel towards the net zero goal. Each of Australia’s nationally determined contributions (NDC) from 2030 to 2050 are foundational to the durable policy architecture needed to attract and underpin massive private investment in decarbonisation.
The Net Zero Australia study estimates a cumulative capital investment of $7 to 9 is trillion is required to transition our economy to net zero. Targets that do not transition the economy quickly enough cause Australia to lag behind on its decarbonisation journey and risk investment going elsewhere as a result. Targets that push too hard impose unnecessary adjustment costs on the economy and risk losing community support for the transition as a result.
The BCA makes the following key recommendations. The Authority’s 2025 advice to government needs to:
- maintain a clear line sight to 2050 by providing an indication of Australia’s next three NDCs and the 2050 target (net zero or net negative)
- determine optimal decarbonisation pathways for all sectors of the economy so that the electricity sector and the large industrial sector are not inefficiently and unfairly burdened with meeting Australia’s NDCs
- outline the detailed sectoral plans, policies and targets required to drive the recommended (optimal) sectoral pathways referred to above
- include an effectiveness and efficiency audit of all relevant existing and announced policies and regulations (across all jurisdictions) with recommendations for improvement from an integrated whole of economy perspective, and
- assess the full potential for domestic and international carbon offsets to contribute to achieving Australia’s NDCs and to reiterate the need for a National Carbon Market Strategy to clarify the role of offsets in the transition to net zero 2050.