21 July 2010 – As the federal government considers its next steps on pollution and climate change, the Climate Institute has released its policy priorities, detailing a list of action points for both government and businesses to help reduce pollution and energy consumption.

Summary: 2010 Pollution and Climate Policy Priorities

1. Limiting and reducing pollution

Avoid highly dangerous pollution levels: Advocate global action consistent with peaking global temperate below 2 degrees Celsius above pre industrial levels and returning to below 1.5 degrees Celsius by 2100. Specifically, global emissions should peak no later than 2020 and return to around 85 per cent below 1990 levels by 2050.

Limit Australian pollution and meet international commitments: By the end of the next term of government (2013), Australia’s domestic carbon pollution levels have peaked and as part of a global effort are on track to at least a 25 per cent net reduction on 1990 levels by 2020 and zero net pollution by 2050.

In 2011, implement a legislated declining limit or cap on pollution, for example as part of an emission trading scheme, that is consistent with achieving a 25 per cent reduction on 1990 levels in national pollution by 2020.

Accelerate further global action: Drive greater levels of global ambition through implementing the Copenhagen Accord and meeting international commitments including contributing a fair share to new and additional global low pollution financing in developing countries.

Avoid locking in high polluting technologies: Introduce standards and regulation to limit pollution and avoid locking in high polluting technologies. This would include:

  • A low emission standard for new power stations to ensure no new non-CCS commercial coal plants are built, and that all investments in new coal and gas plants move towards full commercial scale CCS post 2020;
  • Establishing a regulatory pathway towards a zero net energy/carbon target for new buildings by 2030;
  • Introducing national legislation to streamline, expand and continually strengthen minimum energy performance standards (MEPS) for appliances to move towards world’s best practice, and;
  • Immediately introduce mandatory fuel efficiency standards for passenger vehicles to ensure consistency with similar regulations in the US by 2015, and EU standards by 2020.

Make the land sector part of the solution: Reward early action to enhance carbon sinks, avoid deforestation and drive innovation in the land sector. Include:

  • Fast-tracking a program to allow landholders to access bankable pollution market opportunities, including enabling over 10 million of tonnes of credible, internationally compliant carbon sequestration and agricultural sector abatement by 2013;
  • Immediately implement co-funding and co-regulatory agreements with industry to drive emissions abatement in the agricultural sector, and;
  • Develop appropriate pollution pricing, regulations and/or financial incentives to limit agricultural emissions to be introduced by no later than 2015.

2. Making companies take responsibility for their pollution

Making business accountable for pollution: Legislate in 2011 to place pollution reduction liabilities on Australia’s largest emitters to ensure they take full responsibility for the pollution and companies contribute to doing their fair share towards meeting legislated national emission limits.

Define the principles of a fair, effective and transparent industry package: Industry assistance under any pollution limiting and pricing scheme should be transparent, flexible and regularly reviewed, fiscally responsible, reduced through time and targeted. It should also maintain incentives to invest in low pollution technologies, activities and behaviours, and drive structural and technological changes in high emitting industries towards world’s best practice and beyond.

Reduce investment risks and enhance transparency: Ensure transparency and accountability in limiting pollution and making clean energy cheaper by:

  • Introducing new national regulations mandating that listed companies, institutional investors and superannuation funds disclose their level of exposure to long-term risks associated with climate change impacts and costs associated with carbon abatement policies;
  • Extending the scope of the Energy Efficiency Opportunities Act;
  • Enhancing the oversight role of The Carbon Trust;
  • Implementing a greenhouse pollution trigger in the Environment Protection and Biodiversity Conservation Act, and; accepting forest management emissions under the national target.

3. Making clean energy cheaper

Put a price tag on pollution: Starting in 2011, implement an increasing and credible carbon price. A price floor should be set at $20 per tonne in 2011 and increase each year by 4 per cent plus the percentage increase of the consumer price index. An equivalent pollution price should be applied no later than 2015 to sectors not covered by the legislated pollution limits.

Drive smart innovation: While ensuring a balanced approach to RD&D, drive early deployment of new emerging clean energy options, above the Renewable Energy Target, by:

  • Putting in place policies, such as loan guarantees, tax credits, seed funds co-investment and accelerated depreciation, to reward and overcome any remaining barriers to upfront investments in emerging technologies, such as geothermal and electric vehicles, and;
  • Ensure policies specifically target barriers to investment in the necessary infrastructure to support clean energy investments (for example, smart grids, CCS pipelines and storage hubs, and additional electricity network infrastructure).

Remove incentives and subsidies to pollute: Commit to implementing relevant provisions of the Henry Tax review (for example, amending the Fringe Benefits Tax and designing road user charges to support low emission options). In the 2011 budget, begin phase out of perverse fossil fuel subsidies as per a credible interpretation of G20 commitments at the 2009 Pittsburgh meeting.

Join the global race to save energy: The Federal Government should adopt a national energy efficiency target, to put Australia in the top five of OECD countries for efficiency improvements by 2020. Commit to at least a 40 per cent improvement in the energy intensity of Australia’s economy by 2020, off 2005 levels (this equals around a 15 per cent reduction from published business as usual reductions).

Engage business in delivering energy savings across the economy: Establish a National Energy Savings Initiative, mandating energy retailers and large industrial energy users to achieve a set level of energy savings each year in the residential, commercial and industrial sectors.

Make buildings more comfortable and efficient by saving energy: Deliver financial support for energy efficiency upgrades in Australia’s existing commercial and residential building stock. A strong focus of this financial support should be given to supporting low-income households, in addition to a scaling up and accelerated delivery of the Green Start program.

Build 21st century low pollution infrastructure: Build clean energy infrastructure and networks by committing to a reform process to remove barriers to energy efficiency, smart grids and distributed generation within the National Electricity Market, implementing early reforms should drive distributed generation, large scale clean energy, and introduce guidelines to ensure federal funding of transport infrastructure is tied to energy efficiency and pollution reduction outcomes. In the absence a price tag on pollution, facilitate the retirement of highly polluting generation infrastructure by 2020.

Build the skills capacity to take advantage of an economy based on clean energy: Help unlock the low pollution economy workforce by:

  • Implementing budget commitments and policies such as Clean Energy Initiative, Renewable Energy Bonus Scheme and the Green Loans are supported by industry training programs;
  • Requiring at least a third of the ‘Critical Skills Investment Fund’ to focus on up skilling workers to meet the needs of a cleaner economy;
  • Dedicating places in the Productivity Places Program to up-skilling of our workforce for the low- carbon economy, and;

• Developing clean industry and innovation hubs in key regional centres, inviting partnerships between industry and the education sector.