Submission to the Climate Change Authority Special Review Second Draft Report on Australia’s Climate Policy Options

SUMMARY OF SUBMISSION

• The Paris agreement on climate change explicitly recognises that national contributions are not sufficient to hold global warming to the guardrails of 2 degrees and 1.5 degrees Celsius. The agreement includes a process for nations to regularly revise and increase the ambition of targets. Accordingly, the Authority must assess policies on the basis of how quickly they will have an impact on emissions and how rapidly they can be ratcheted up in order to achieve deeper emissions cuts than Australia’s current targets.

• The Authority should broaden its assessment of climate change mitigation policies to consider the wider social impacts of policies, in addition to cost-effectiveness, environmental effectiveness and equity considerations.

• To ensure that policies are designed to work for conditions that will be encountered in the real world, a strategic approach to emissions reductions should be developed, rather than a narrowly defined framework of economic optimization. This should involve the pursuit of mitigation across all sectors of policy and levels of government, recognising that emissions reductions will not always be the primary aim of policies.

• It follows that the introduction of market mechanisms such as emissions trading or carbon taxes should be considered in conjunction with other policy approaches, including targeted support for renewable energy, regulations, funding for research and development, and well-designed programs to understand and support changes to social practices.

• In addition to providing incentives for the phase-in of renewables technologies and energy efficiency, the Climate Change Authority should examine innovative complimentary policies to regulate the least efficient electricity production capacity.

• The impact of policies on Australia’s international competitiveness should be assessed in the context of the Paris agreement and the creation of opportunities for Australia to participate and lead in developing solutions to the causes of climate change and adapt to its inevitable impacts.

• The Authority should also examine further policy opportunities that could bring significant benefits to Australia, including emissions reductions, such as reform of the national electricity market to support a greater share of renewable and distributed energy, reviewing industry support mechanisms for fossil fuel producers, incorporating climate change considerations into all major policy decisions and halting the approval of new coal mines.