A carbon price would be an important tool for Australia to meet its short-term emissions targets, but achieving a high enough price to set the country on the path to net-zero emissions is politically infeasible so additional policies are needed, the Melbourne-based Climate Institute said Wednesday.
The think-tank released its submission to the Climate Change Authority, which is undertaking a review of the policy implications of the Paris Agreement for Australia.
The paper said that to do its fair share to meet the global 1.5C or 2C temperature targets, Australia must reach net-zero emissions well before 2050, which means coal must be replaced by renewables by 2035.
While an internationally-linked market mechanism that caps CO2 emissions from most major sectors would be a helpful tool to meet near-term targets, such as the goal to cut GHG output 26-28% below 2005 levels by 2030, it would not be sufficient in the longer term, the submission said.
“A domestic carbon price of >$70-$120/tonne would be needed during the 2020s to begin an orderly transition [to net-zero emissions]. Yet, signalling a domestic carbon price of this magnitude seems to be politically infeasible over the next couple of years,” the Institute said.
“Unless backed by other measures, such as a coal closure regulatory measure, weak carbon signals would defer the necessary transformation to a later date.”
Julia Gillard’s former Labor government introduced a fixed carbon price at A$25 per tonne in 2012, but it eventually cost her the prime-ministership.
A sizeable faction of the ruling conservative coalition government is against any form of carbon pricing, let alone one costing industry A$70-120 per tonne.
“We need to move beyond arguments about the value of carbon pricing and provide a policy framework that can do the job,” Climate Institute CEO John Connor said.
“There can be no durable policy framework without an objective for zero emissions; carbon budget analysis; and electricity market direct action to replace our aging and inefficient coal burning power stations with clean energy. Carbon prices are important, but we need to be aware of their limitation in current political and investment realities,” he added.
“Failure to deliver a policy framework aligned with a credible pathway to net zero emissions risks prolonging investment uncertainty and a much more rapid and disruptive change at a later date.”
The government, if it wins this year’s general election, is scheduled to review its climate policies next year.
However, comments by Prime Minister Malcolm Turnbull on Wednesday suggested that his administration did not see an urgent need to take new measures.
“Emotion and passion all have their place, but in terms of reducing our emissions … the policies that are in place are working. They are able to meet the targets that we committed to in Paris,” he said when asked by Greens MP Adam Bandt about recent NASA data showing record temperatures, according to AAP.
By Stian Reklev – stian@carbon-pulse.com
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