"With the Greens and the Coalition potentially scuttling the Federal Government's Safeguard Mechanism we are watching history repeat. If that happens the cost would be more climate wars and less climate action," Innes Willox, Chief Executive of the national employer association Ai Group said today.
"Industry has supported the Mechanism in part because, given its history, we thought it was a rational approach that would gain broad support. Instead, energy and climate policy is again being used as a political football, much to the bemusement of those who do the actual investing in and development of energy sources, and their consumers.
"The Coalition’s decision to vote against changes it had previously proposed and the reported Greens positioning once again make Australia look incapable of reaching agreement on how to utilise assets to build economic success. A form of political extremism is at play here. It has cost us before and it could cost us again.
"The Safeguard Mechanism requires Australia's largest greenhouse gas emitters to keep their net emissions below an emissions limit (a baseline). We want this mechanism to work as it’s important to industrial investment and emissions reduction.
"This does not mean we are giving a blank cheque for any possible version of the Mechanism. How it deals with industry competitiveness is crucial. Durable solutions are needed to ensure that industries with a strong future in a net zero world are able to invest in that future here, rather than leaking jobs and emissions overseas.
"The flat-out blocking of any new coal or gas developments does not look sensible or likely. At present, the expected decline in production from our gas fields is already faster than the expected reduction in local demand as gas users lift efficiency, electrify or adopt clean hydrogen. Fossil production will shrink over time as local and global demand shifts away but we will still need to find and produce more gas for some years.
"The Greens are also critical of offsets within the Mechanism. Industry accepts that we will not be able to get to net zero with offsets alone and deep cuts will be needed over time. However, offsets are essential along the way to achieve the desired targets.
"Fortunately, the Greens positioning seems to be something less than an ultimatum. Hopefully, some sensible compromises can be found.
"Another decade of climate wars would see Australia pass up economic opportunity while other nations decide the future we will have to live with.
"Ai Group will consult deeply with our members to consider how we can work through this impasse because we do not want to go back to the future," Mr Willox said.
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