Ai Group, Australia’s biggest industry lobby, on Sunday urged the government to find additional funding for the Emissions Reductions Fund (ERF) to ensure there is no slump in the country’s efforts to cut GHG emissions.
The government has bought 93 million tonnes of CO2e cuts in the first two auctions under the ERF, but Finance Minister Mathias Cormann earlier this month hinted there would be no new funds forthcoming for the ERF in this year’s budget.
In response, analysts Reputex predicted this would mean no new carbon offset demand coming from the fund for at least 9-12 months after the ERF’s budget is exhausted by the end of this year.
In its 2016-2017 budget submission, published Sunday, Ai Group urged the government to find room in the budget for the ERF.
The budget should assist “the preparation of the next, and more challenging, phase of greenhouse gas emissions reductions by supporting innovation and by allocating additional revenue to the Emissions Reduction Fund”, the lobby group said.
“The success of early rounds of the ERF abatement auctions is welcome, but creates a risk at current funding levels that a short boom in abatement industry activity is followed by several years of slump.”
“That is unlikely to be efficient given the scale of the 2030 emissions target challenge, and the deeper targets to which the Paris Agreement points.”
At December’s Paris climate talks, Australia committed to cutting GHG emissions 26-28% below 2005 levels by 2030.
The initial rounds of the ERF have focused primarily on land use and waste projects, but as more industrial methodologies have been finalised, an increasing amount of the Group’s more than 60,000 member companies are expected to benefit from the fund in coming years.
In the budget submission, it also asked the Coalition government to retain funding for the Australian Renewable Energy Agency and the Clean Energy Finance Corporation.
By Stian Reklev – email@example.com