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Making Energy and Climate policy work – Ai Group Pre-Election Statement

Ahead of the coming Federal Election Ai Group is releasing a series of policy papers on issues of importance to business and the community with recommendations which we urge all parties to support. The first policy statement addresses energy and climate policy.

In the report, Ai Group Chief Executive, Innes Willox says: "It is imperative that the next Government develop credible, durable and well-integrated climate and energy policies. If we continue with a succession of rapidly reversed policies or no policy at all, at best we will see a costly patchwork of state and localised interventions, and at worst we will see our current energy disadvantage cemented and a receding ability to meet our emissions targets.

"Reliable and affordable energy are necessary for our economy and society to prosper, as is a successful response to climate change. These are abiding challenges that will require coherent and dynamic long-term strategy; substantial ongoing private investment and public support for research and innovation.

"Risk, uncertainty and a lack of strategic context are serious barriers to that investment. While some risk is unavoidable, especially given the massive technological and market changes impacting energy worldwide, government policy can provide a clear and stable basis for investors to plan around. Unfortunately, deep political conflict over energy and climate, particularly at the Federal level, has made public policy into a glaring source of uncertainty inhibiting the investments we need.

"This situation needs to stop.

"The best outcome would be for the major parties at the Federal level to forge greater bipartisan consensus on the direction and framework of policy, as is the case in the United Kingdom and in some Australian states. This will require genuine communication and a spirit of compromise. The next Government should:

  • Cement durable frameworks for energy and climate, the lack of which is a serious barrier to needed investment;
  • Pursue a new energy advantage by improving energy productivity, lowering the cost and risk of investment, encouraging competition, making provision for likely scenarios and ensuring policy can cope with surprises;
  • Ensure that deeper emissions targets over time are consistent with continued and increased prosperity, by ensuring policies are trade-neutral and facilitate successful industry transition;
  • Adopt climate policy measures that collectively access emissions reductions from across the Australian and world economies and operate at least cost; and
  • Work with industry, employees, States, local government and community organisations to develop effective and proactive responses to anticipated closures or transitions of existing emissions-intensive facilities.

"We encourage bipartisan consensus-building. If it remains elusive, alternatives will be needed to make policy investable. Options may include the use of intergovernmental agreements, as proposed in the National Energy Guarantee; contracts, such as Contracts for Difference; or property rights, as seen in certificate markets. Care is needed in pursuing any of these design features. But no policy can achieve much if it is not expected to last," Mr Willox said.  

Read the full Energy and Climate Policy Statement

Media enquiries: Tony Melville – 0419 190 347