Coal phase-out, not just carbon pricing, crucial for climate credibility Media Release

Mar 16, 2016 - 9:00am

To be serious about its recent Paris climate commitments Australia needs a targeted strategy to replace traditional coal fired power with clean energy by 2035 and achieve net zero emissions by 2050 said The Climate Institute as it released its submission to the Climate Change Authority’s review of Australia’s policy framework.

"Global temperatures are smashing records right now and Australia's emissions are rising again,” said John Connor, CEO of The Climate Institute. “The nation’s climate and energy policies lack the credible objectives, the tools and the urgency needed to back recent international commitments, let alone build an innovative, safer, zero pollution Australian economy."

“We need to move beyond arguments about the value of carbon pricing and provide a policy framework that can do the job.  There can be no durable policy framework without an objective for zero emissions; carbon budget analysis; and electricity market direct action to replace our aging and inefficient coal burning power stations with clean energy. Carbon prices are important, but we need to be aware of their limitation in current political and investment realities.”

"The Paris climate summit saw global business leaders, investors and politicians, including our Prime Minister and Foreign Minister, recognise the inescapable fact that we have to achieve net zero emission economies if we are to control global warming levels."

"Committing to pursue efforts to keep global warming below 1.5˚C - 2˚C above pre-industrial levels means we have to achieve net zero emissions well before mid-century. You can’t achieve that objective, and the Paris commitments, without an orderly and timely plan to modernise and clean up our electricity system."

International momentum continues to build with coal consumption falling in China and with the US and Canada agreeing to announce 2050 targets this year. Yesterday the British Government committed to legislate a net zero emissions goal.

"Here in Australia there is drift and uncertainty in climate and energy policy. The Emissions Reduction Fund is reportedly losing budget support and ‘safeguard mechanisms’ impose little or no limits or responsibility on big emitters. Emissions are rising again. There are some welcome new initiatives under investigation but investors, business and citizens face a long delay potentially till the end of next year for a planned review to be concluded. The ALP has important elements like a net zero objective by 2050, but is yet to release a comprehensive strategy.”

The government supported the Climate Change Authority (CCA) review of policy mechanisms due to report later this year. In their submission to the CCA, The Climate Institute made the following key points:

  • The Terms of Reference for its review require the Climate Change Authority to consider the Paris Agreement, its objectives and the implications of its strengthening ratchet mechanisms, in its advice to the Parliament.

  • Achieving the objectives of the Paris Agreement requires achieving net zero emissions by mid-century. Unless this process starts soon – specifically, the sustained replacement of the existing coal generation fleet by around 2035 - disruptive and costly interventions will be required to limit total emissions in line with the Paris objectives.

  • In terms of sending a broad signal throughout the economy of the need to undertake emissions reduction activities, carbon pricing remains an important policy. However, it is currently unlikely that a carbon pricing mechanism, for example through a baseline and credit or an internationally linked emissions trading scheme, would incentivise the transition required in the short to medium term.

“Investors would need confidence of a domestic carbon price of more than $70-$120/tonne during the 2020s to back an orderly transition from high emissions generation to clean energy. This is highly unlikely given our recent policy history and, unless supported by other measures, weak carbon price signals alone would deter the necessary investment.”

“Failure to deliver a policy framework aligned with a credible pathway to net zero emissions risks prolonging investment uncertainty and a much more rapid and disruptive change at a later date. There’s no plan for climate change, no plan for our future, without a plan for a zero carbon Australia backed by modern, smart and clean energy.

The Climate Institute’s submission to the Climate Change Authority is available here.

For more information
John Connor ● CEO ● 02 8239 6299

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