This election marks a new beginning for climate policy in Australia. The newly elected Albanian government has an opportunity to do more than start some policy action: it can redefine the national conversation on climate change.
The central issue for Anthony Albanese and his government is social justice, not climate change. Cost-of-living pressures are weighing heavily, and increased attention to international security is garnering attention.
But good climate policy can help with all of this. In any case, the government must meet voters’ expectations on climate change before the next election. Next time it could be Labor losing seats to independents and climate-friendly Greens. And in this parliament, the Senate will push Labor to do more on the climate. The pressure to do more will be even greater if he ends up forming a minority government.
The proposed 43% emissions reduction target will send an important signal, but it is not particularly ambitious. The great opportunity is to see climate policy as part of the great quest for future opportunities for the younger generation. A far more ambitious climate policy agenda than Labor presented in the election would naturally follow.
Action against climate change is often seen as a trade-off between the environment and the economy. In reality, many investments that will reduce emissions will pay for themselves over time. Energy bills can go down due to more low-cost renewable energy or better energy efficiency. Decarbonisation will help Australia stay competitive in global markets.
Most measures that reduce emissions have other benefits such as cleaner air and greater energy security. It is a question of investing heavily in this decade and the next, in order to reap the benefits for a very long time.
Chris Bowen and Jim Chalmers, as climate change minister and treasurer respectively, could carry a sustained agenda of strong climate action as an investment in the country’s economic future. Penny Wong as Foreign Secretary could strengthen it internationally. It would be a legacy for the ages.
Such a reframing would require a genuine national conversation about Australia’s future in a world that is acting on climate change.
What are the different paths to make net zero emissions a reality? Where are the economic and trade opportunities, what does this mean for trade and tax revenue, what are the social pressure points, what will be the effects in different regions, and how are we going to manage it all in a way that distributes both benefits and costs?
The new government, or the Climate Change Authority on its behalf, could convene an inclusive and comprehensive process towards a long-term national climate strategy. If this is a genuine dialogue between all major groups in society, supported by the best information available, it will unveil a wealth of opportunities and ways to close the gaps. And focusing on agreement on goals and outlines will politically facilitate the subsequent implementation of policies.
Concretely, what can we do or start soon?
Australia’s 2030 emissions target will be increased, sending an important signal internationally and to investors. But the proposed reduction target of 43% (compared to 2005, when emissions were near record high) is not particularly ambitious. More can be done with the right policies, and more is needed to position Australia for a low-carbon global economy.
In industry, Labor plans to activate the dormant ‘safeguard mechanism’. It should do so ambitiously, to create meaningful rewards for emissions savings and penalties for high emissions across Australia’s industrial sector.
This can then evolve into a future global national carbon price. The political deadlock on carbon pricing needs to be overcome. Many other countries are using it successfully, and it’s a logical part of Australia’s long-term policy.
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In the electricity sector, rapid expansion of the electricity grid and energy storage is needed to support continued large-scale private investment in wind and solar power. We need meaningful electricity market reform, and reducing emissions should be a formal part of what regulators are working towards. The federal government is needed to make the push in unison with the states.
In transport, we need faster deployment of electric vehicle charging and integration of smart grids. Road tax reform can ensure that all cars pay for road use, differentiated according to carbon emissions, local air pollution and traffic congestion. And governments need to invest heavily in better public transport, because more cars are not the solution.
The building sector agenda should include national energy efficiency standards and meaningful building codes that support the use of low-carbon materials. In agriculture, R&D can help the agricultural sector adopt low-emission practices and products. Land use could be regulated based on emissions.
Research and planning for effective adaptation to the effects of climate change must be strongly stimulated. And we should engage far more with our neighbors in the Pacific and Southeast Asia, both to help adapt to climate impacts and to collaborate on reducing emissions. Money spent in this way will pay dividends.
For the coal industry, we need a planned approach to regional structural adjustment. An agreed timetable for closing the remaining coal-fired plants would be helpful. The economic diversification of the coal regions must be prepared long before the closure of the mines. Labor’s proposed “reconstruction fund” would help fund specific initiatives, but it would make sense to also tap into the industries themselves to fund an orderly shutdown of power stations and mines.
And then there’s the great benefit of the resource industry, namely our renewable energy opportunity of the global shift to net zero emissions. Australia could produce and export huge amounts of clean energy like hydrogen, ammonia or electrons, and perhaps more importantly energy-intensive ‘green’ products like fertilizers, aluminum and steel.
To compete for these new global markets, we must step up applied research, ensure that indigenous communities are on board and benefit from them, put in place regulatory and tax frameworks and tell the world that we are ready and willing to play on zero-carbon.
The new government has the chance to lead with brilliance, and now is the time.
• Frank Jotzo is Professor of Environmental Economics and Climate Change Economics at ANU Crawford School of Public Policy.
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