Business and industry alliance sets out climate ‘principles’, including that climate policy should be ‘capable of achieving deep reductions’ in emissions

This article is more than 5 years old

This article is more than 5 years old

An unprecedented alliance of business, welfare and environmental groups and trade unions is demanding an end to Australia’s decade of political paralysis and division on climate policy, insisting the Abbott government make credible emission reduction commitments and the major parties agree on how the pledges should be implemented.

In an attempt to reset the bitter political debate on climate policy, the powerful lineup of interest groups has reached a historic agreement on “principles” that should guide Australia’s climate policy.

This is born of collective frustration ESAA chief Matthew Warren

The principles do not explicitly mention the Abbott government’s Direct Action climate plan or the former Labor government’s emissions trading scheme, but they include objectives Direct Action fails to meet in its current form – including being “internationally linked”, being “capable of achieving deep reductions” and achieving greenhouse reductions “across all sections of the economy”.

Another principle is that policies should “prevent the unnecessary loss of competitiveness by Australia’s trade-exposed industries” – a charge levelled against Labor’s ETS by the Coalition, who repealed it.

Crucially, the new principles demand a policy that allows Australia to play a fair role in limiting global warming to 2C and eventually achieves no net greenhouse emissions – meaning more emissions are taken out of the atmosphere or bought from overseas than emitted by activities in Australia.

Groups included in the “climate roundtable”, which has been meeting secretly for more than a year, are the Business Council of Australia, the Australian Industry Group, the Australian Aluminium Council, the Climate Institute, the Australian Council on Social Service, the Investor Group on Climate Change, the Australian Conservation Foundation, WWF, the Energy Supply Association of Australia (ESAA) and the ACTU.

The Coalition is engaging in double talk on climate policy – it has no other option Read more

“This is born of collective frustration,” said the chief executive of the ESAA, Matthew Warren.

“We are tired of the politicking on climate policy. We have had a decade of policy uncertainty ... we need a target and we need an agreed policy to get there, but we have to know we aren’t going to keep changing track,” he said.

The chief executive of the Business Council of Australia, Jennifer Westacott, said the aim of the exercise was to “send climate policy in the right direction and avoid years of costly policy uncertainty and reversals”.

And Innes Willox, the chief executive of the Australian Industry Group, said the principles would “end the frustration and disruption that business has faced from ever-changing policy”.

The government will shortly unveil Australia’s new target for greenhouse gas reductions after 2020 – a promise that the foreign minister, Julie Bishop, will take to the United Nations climate conference in Paris in December.

But the new promise will raise immediate questions about what policy Australia will use to get there. The government’s $2.5bn emissions reduction fund may allow Australia to meet its minimum 2020 target – a 5% reduction in emissions compared with 2000 levels – but without changes it would become impossibly expensive for the government to “buy” deeper emission reductions through the fund.

One option would be to toughen the so-called “safeguards” mechanisms, which is supposed to put a cap on industrial and electricity sector emissions, forcing higher-emitting companies to buy emission permits from lower-emitting ones. But that would become a kind of baseline and credit emissions trading scheme, which has been ruled out by Abbott. Another option would be to allow companies to buy emissions reduction on the international market, but Abbott has previously ruled that out too.

Labor is also developing a new climate policy and, as previously reported by Guardian Australia, has not yet decided whether to re-legislate an emissions trading scheme or use the government’s policy to create a different type of carbon market.

The “principles” agreed to by the groups include that climate 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

recognise the strategic importance of reducing emissions from the energy sector in achieving the overall goal

use any revenue resulting from climate policy to address legitimate needs directly related to climate policy, and otherwise be returned to businesses and individuals

The chief executive of the Climate Institute, John Connor, said the aim of the extraordinary new alliance was “to reset the tumultuous debate and try to establish a civil and constructive discussion”.

“We are offering ourselves as a sounding board for all parties to test and discuss their policies,” he said.

The group wrote to the prime minister, Tony Abbott, and opposition leader, Bill Shorten, advising them of the new consensus.