16 November, 2021
It is now beyond question that dangerous climate change is underway, and will get worse without ambitious global reductions in greenhouse gas emissions.
The transition to a low emissions economy will be very challenging, require large and well-targeted investment and presents a major opportunity for Australia to be a renewable energy super power.
To be achieved at the least cost, the transition needs to be underpinned by national policy that is coherent, credible, enduring and skillfully designed.
The best such policy will include an economy-wide price, or price-equivalent, on emissions. This would stimulate the private sector to adopt the most efficient, least cost means to reduce emissions and accelerate the development and adoption of new energy technologies.
Many Australian business organisations and individual companies support the need to rapidly reduce emissions and to use price signals or other market mechanisms to do so.
The Business Council of Australia reports that “Domestic and international companies are rapidly adopting net zero and ambitious internal decarbonisation targets. 50 per cent of the collective ASX200 market capitalisation is now covered by net zero commitments. “
It also notes: “…an explicit, economy-wide carbon pricing mechanism is the Business Council’s preferred option.”
[BCA, “Achieving a net zero economy”, October 2021.]
Among Australia’s biggest listed companies, many also state that they are using a shadow cost of carbon in their internal investment allocation decisions. Some (see list below) state publicly that they support the introduction of a national price on carbon. Many others recognize the efficiency of, and support the use of, ‘market mechanisms’ to reduce emissions. This support for the use of market mechanisms is especially widespread among representative industry groups such as the national and state chambers of industry and minerals councils.
Organisations that publicly support use of a price on carbon as an efficient policy to reduce emissions include:
- Australian Industry Group
- Australian Council of Social Services
- IGO Ltd
- Insurance Australia Group
- Rio Tinto Ltd
- South32 Ltd
- Woodside Petroleum Ltd
Many others, including national and state industry bodies and minerals councils, publicly support the use of market mechanisms.