Ai Group releases pre-election statement on energy and climate policy

The Australian Industry Group (Ai Group) recently released its pre-election policy statement on energy and climate policies as part of a series of papers outlining policies that the group is encouraging political parties to support.

“The next three years could set Australia up to achieve a new clean energy advantage and a thriving and clean economy,” said Innes Willox, Ai Group Chief Executive. “Working with the states, industry and others, the Commonwealth can help prepare for faster, more coherent and successful transitions.

“2030 emissions goals should deepen in order to reach the 2050 goal, support needed investment and deployment, and keep pace with our international partners and commitments. While there is no one best number, roughly halving emissions by 2030 would put Australia in the mainstream of advanced economies.”

According to Willox, building a new advantage in clean energy for Australia is achievable, but it will mean coherent and efficient action.

“Coal generator closures will accelerate, and variable renewables will increasingly dominate supply,” he said. “This transition will not be straightforward or easy, but it can and must be managed effectively, avoiding negative impacts on price, security and reliability.

“Successful transition is not just about the power system. Fair treatment of workers, communities and supply chains affected by closures is essential so that they can thrive.”

It is apparent to Willox that governments no longer seem confident that the existing electricity market design can drive the necessary investment.

“A new settlement on resource adequacy mechanisms is needed that commands broad consensus and provides greater stability,” he said. “Natural gas plays a vital role in industry, power and households today. But the price outlook is bleak, and emissions objectives will require alternative ways of delivering these energy services.”

The safeguard mechanism should be built on as a driver of long-term abatement within industry and the wider economy, Willox said, adding that by gradually lowering baselines, and crediting performance below baselines, this could be achieved alongside measures to maintain trade effectiveness.

“Australia needs to prepare the economy and communities for lower demand for emissions-intensive exports, pursue all opportunities for clean economy exports, and get ready for carbon border adjustments in major economies,” Willox added.

The full paper from Ai Group is available here.

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