CEO Andrew Petersen said most other developed economies are moving away from taxpayer funded approaches.
“The Direct Action Plan falls short of addressing the long-term framework needed to incentivise business to structurally reform and scale up market ready solutions to lift energy productivity and decarbonize our economy. Its inflexibilty will not foster technological change or bring about rapid deployment of low cost abatement solutions,” he said.
“Direct Action is a return to a non-market based approach, which will be administratively complex and something business surveys conclude is not preferred. For participating businesses comprehensive emissions reduction will also be costly to manage. With the wind-down of obligations under the Clean Energy legislation package, as well as building a new emissions abatement strategy and operational structure around Direct Action, some businesses will need to manage two different regimes.
“The challenge to decarbonise the Australian economy is much greater than the Emissions Reduction Fund can presently deliver. In the long term such a scheme will not harness the business innovation, enterprise or entrepreneurship to a scale or at the accelerated level required to create new market or employment opportunities.”
Petersen also singled out the lost opportunity of the rejecting Senator Nick Xenophon’s proposed strategic reserve of credits. Developing global least-cost approaches should include sound carbon abatement. The inability to utilise funds to purchase credible and verified international credits is difficult to understand, particularly as Australia is a ratified party to the Kyoto Protocol, the international market based scheme that creates these credits.”
“As it stands, the Direct Action Plan can and should only be seen as a bridge to a market based scheme where business and investors are engaged to accelerate solutions which are measurable, permanent, scalable, replicable, and beyond business-as-usual,” he said.
“Leading international policymakers and business groups alike are looking at Australia and pondering our transition from best practice GHG mitigation to a hybrid scheme that does not set a stable or durable long term framework to promote Australia's energy and industrial transformation. In reality, it will be business innovation that delivers the necessary global reductions across all sectors. But this happens most effectively with smart, coherent, predictable and durable government policies that support the ambition, are sensitive to the vulnerable, and responsible to future generations. Central to all government policies is a global commitment to phase out global net emissions by the end of this century and concerted efforts towards a global carbon price to provide the impetus for a global rewiring in favor of low carbon investment.”
The Parliament inquiry into the return to an emissions trading scheme, a concession to win the support of Clive Palmer, needs to work on developing a durable framework that in addition to managing emissions also makes responsible, sustainable companies more successful.
SBA is contributing via the World Business Council for Sustainable Development to a series of global roundtables leading up to COP15 in Paris next year. They are focused on business solutions and aim to engage CEOs globally to contribute to them.
