Australia needs a clear commitment to achieve net-zero emissions by 2050 to encourage private investment in low-emissions technology such as renewable energy generation, an investor group has said – but the federal government has confirmed it has no such target and does not intend to set one in the near term.
The Investor Group on Climate Change, a collaboration between Australian and New Zealand institutional investors with more than A$2 trillion ($1.3 trillion; €1.2 trillion) of assets under management that focuses on the impact of climate change on financial investments, said last week that private capital was “critical” in achieving net-zero emissions.
“Unlocking this private capital will require a clear signal through an integrated and robust national climate policy suite that Australia is heading for net-zero emissions by 2050 consistent with our international obligations,” IGCC director of policy Erwin Jackson said.
The federal energy and emissions reduction minister Angus Taylor confirmed last week that the government does not have a target to reach net-zero emissions by 2050, telling the ABC “our approach is not to have a target without a plan”.
In a written response dated 12 May, the government told the Australian Parliament it would re-submit its current emissions reduction target before the next United Nations Climate Change Conference of the Parties, also known as COP26, which was due to be held in Glasgow this November but has been postponed until next year due to coronavirus. It added that “Australia’s subsequent NDC [nationally determined contributions], including a target to 2035 or 2040, is due to be communicated in 2025”.
Australia’s current commitment is to achieve a 26-28 percent reduction in carbon emissions by 2030 in comparison with 2005 levels.
The IGCC made its comments on private capital in response to a discussion paper that the government published on its Technology Investment Roadmap, which outlined a framework through which it hopes to support investment in low-emissions technologies across a range of industries.
The discussion paper said: “This roadmap will bring a strategic and system-wide view to future investments in low-emissions technologies. Our approach will be hard-headed, recognising the economic and technical barriers to widespread deployment today, while remaining optimistic about future advances and the role different technologies may play in the global effort to reduce emissions.”
It did not contain detailed policy statements, with the government inviting feedback on the paper ahead of the publication of its formal Long-Term Emissions Reduction Strategy later this year.
IGCC’s Jackson added: “With governments likely to be more fiscally constrained in coming years due to the impact and response to the covid-19 pandemic, private capital will be critical to ensuring a smooth transition to net-zero emissions.
“IGCC welcomes that the government will seek specific consultation with the finance sector in further developing its Technology Investment Roadmap, and we look forward to engaging on the opportunities to accelerate private investment flows into zero-carbon technologies.
“Unlocking billions of dollars of investment in new industries and new jobs requires a strong partnership between government and institutional investors. Government investment alone will not address the systemic risks that climate change presents to the Australian economy.”