Energy policy uncertainty bad for business (6 Aug 2024)
When I was Sustainability Manager at one of Australia's 10 largest companies, we had a clear message for the Federal government when it came to emissions policy – we just needed certainty.
Businesses are good at making the best possible decisions when they know the rules of the game. But uncertainty makes good decisions impossible – it is a menace to business and the rules are changing as we face huge challenges.
A decade of damaging uncertainty around energy policy is now a clear and present danger to Australian prosperity.
Our energy policy must be built on the following facts.
Australia’s largest export is iron ore, which contributes eight percent of global carbon emissions through processing. Our next two biggest exports are fossil fuels.
The last decade has seen a huge shift in energy economics, with renewables now the lowest-cost source of new electricity generation in Australia.
The world is racing to decarbonise.
Put simply, the countries that build the right infrastructure to support the cheapest cleanest energy (renewables) will win.
Australia has huge competitive advantages in renewables, with sun, wind, space and experience rolling out large infrastructure projects.
We are already at 40% renewables in our national energy market – well on the way, and low emitting firming sources are developing rapidly.
But our progress is being threatened because of policy uncertainty driven by political point scoring, not reasoned analysis or bold future-building.
The Coalition’s commitment to nuclear is politically driven and unhelpful. It is an expensive, long-term technology that isn’t viable for Australia, where we have world-leading renewable resources and cheap firming alternatives. It blows out the costs of transition and makes us reliant on high-cost energy imports, while future markets will penalise us for failing to unleash our unique potential.
It’s also a fantasy to imagine that coal-fired power has a future in Australia. In other countries, they are already paying 10-15 times more for their coal-fired power plants.
Last month, 18 influential groups signed a Joint Statement on the Need for Climate and Energy Policy Certainty, pointing out that a credible and consistent framework is needed to attract the investment required at the lowest cost of capital.
This statement was not from fringe environmentalists. It was signed by the Australian Industry Group, the Business Council of Australia, the Australian Energy Council and the Australian Forest Products Association, among others.
We can’t afford to lose energy policy as a tool in our toolbox. It’s vital if we want Australia to be prosperous through the next generation, we need multi-partisan support for a decarbonisation path that leverages renewables and science, not politics.
