This election marks a new start for climate policy in Australia. The Albanese government has the chance to do more than to make a start on selected policy measures: it can redefine the national conversation about climate change.
The central issue for Anthony Albanese and his government is social justice, not climate change. Cost-of-living pressures loom large, and the sharper focus on international security saps attention.
But good climate policy can help with all of these. In any case the government must meet voter expectations on climate change going into the next election. Next time it could be Labor that loses seats to climate-friendly independents and Greens. And in this parliament, the Senate will push Labor to do more on climate. Pressure to do more will be even stronger if it ends up a minority government.
The big opportunity is to see climate policy as part of the big quest for future opportunities for the younger generation. A far more ambitious climate policy agenda than what Labor took to the election would naturally follow.
Climate change action is often seen as a trade-off between environment and economy. In reality, many investments that will cut emissions will pay for themselves over time. Energy bills can fall as a result of more low-cost renewable power or better energy efficiency. Decarbonising will help Australia stay competitive in global markets. Most measures that cut emissions have other benefits like cleaner air and greater energy security.
It is about investing heavily over this decade and the next, in order to reap the benefits for a very long time to come. 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 minister could reinforce it internationally. It would be a legacy for the ages.
Such a reframing would need a real national conversation about Australia’s future in a world that acts on climate change.
What are the different pathways to make net zero emissions a reality? Where are the economic and business opportunities, what does it mean for trade and tax revenue, what are the social pressure points, what will be the effects in different regions, and how will we manage all this in a way that spreads both the benefits and the costs?
The new government, or the Climate Change Authority on its behalf, could convene an inclusive and exhaustive process towards a national long-term climate strategy. If it is a true dialogue among all major groups in society, supported by the best available information, it will unveil a wealth of opportunity and ways to bridge the gaps. And focusing on agreement on goals and broad lines will make subsequent policy implementation politically easier.
In practical terms, what can be done or started soon?
Australia’s 2030 emissions target will be increased, sending an important signal internationally and to investors. But the proposed 43% reduction target (relative to 2005, when emissions were close to the record high) is not particularly ambitious. More can be achieved with suitable policies, and more is needed to position Australia for a decarbonising world economy.
In industry, Labor plans to activate the dormant “safeguard mechanism”. It should do this ambitiously, to create meaningful rewards for emissions savings and penalties for high emissions right across Australia’s industry sector.
This can then evolve into a future comprehensive national carbon price. The political hangup about carbon pricing needs to be overcome. Many other countries use it successfully, and it is a logical part of long term policy for Australia.
In electricity, speedy expansion of the power grid and energy storage is needed to underpin continued large scale private investments in wind and solar power. We need meaningful electricity market reform, and low emissions should become formally part of the objectives that the regulators work to. The federal government is needed to make the push in unison with the states.
In transport we need a faster rollout of electric vehicle charging and smart grid integration. Road tax reform can ensure that all cars pay for road use, differentiated for carbon emissions, local air pollution and congestion. And governments need to massively invest in better public transport because ever more cars is not the answer.
The agenda for the building sector should include meaningful national energy efficiency standards, and building codes that support the use of low carbon materials. In agriculture, R&D can help the farm sector shift to lower-emission practices and products. Land use could be regulated for emissions outcomes.
Research and planning for effective adaptation to the effects of climate change needs to be greatly boosted. And we should engage much more with our neighbours in the Pacific and south-east Asia, both to help adapt to climate impacts and to collaborate on lowering emissions. Money spent in these ways will pay dividends.
For the coal industry we need a planned approach to regional structural adjustment. An agreed timeline for closure of the remaining coal power plants would help. Economic diversification for coalmining regions needs to be prepared long in advance of mine closures. Labor’s proposed “reconstruction fund” would help fund specific initiatives, but it would make sense to also draw on the industries themselves to fund orderly closure of power stations and mines.
And then there is the big resource industry upside, namely our renewable energy opportunity from the global shift to net zero emissions. Australia could produce and export huge amounts of clean energy as hydrogen, ammonia or electrons, and perhaps more importantly “green” energy intensive products like fertiliser, aluminium and steel. To be in the running for these new global markets, we need to ramp up applied research, make sure that Indigenous communities agree and benefit, get regulation and taxation frameworks in place, and tell the world that we are ready and willing to play on zero-carbon.
The new government has the chance to lead with gusto, and the time to do so is now.
• Frank Jotzo is professor of environmental economics and climate change economics at ANU Crawford School of Public Policy at ANU