ENERGY TRANSITION WITHOUT A NATIONAL POLICY TO DRIVE IT

2 May 2022

A comparison of climate policies of the two major political parties by the Institute of Public Accountants (IPA) shows an ideological alignment between Labor and business interests that could pose a risk for the Coalition in the upcoming Federal election.

“The real surprise that emerged in our analysis is Labor’s alignment with two key issues that the private sector has called for: mandatory standardised reporting that is internationally comparable and credible; and tightening the baseline emissions threshold which limits major polluters, a move supported by the Business Council of Australia,” IPA advocacy and policy leader Vicki Stylianou says.

IPA’s climate policy comparison shows Labor clearly has more ambitious targets - 43% greenhouse gas emissions reduction by 2030 compared to the Coalition’s 28%. It may also reflect the Coalition’s preference to understate targets knowing they are likely to be surpassed.

“At a domestic level the Morrison Government’s approach might produce more stability, allowing time to take people on the journey. At an international level, however, it puts us out of step with world leaders and could see Australia miss out on future growth opportunities and investment.”

IPA’s analysis demonstrates just how far business leaders and international policymakers’ thinking has evolved on the issue of climate change since the last election.

“In 2019, Labor’s targets were so far out of whack with the rest of the world. Now, with the United States targeting a 50% reduction in greenhouse gas emissions by 2030, Canada 40 45%, and Japan 46%, Labor appears more in sync with those setting the pace in the global energy transition race,” Ms Stylianou says.

However, we have yet to see the modelling supporting Labor’s climate policy and its pathway to net zero. The Liberals have a clearer roadmap, although 55% of the emissions reductions they are targeting rely on technological advances that are not necessarily guaranteed, such as the much-hyped hydrogen, and carbon capture and storage.

On electric vehicles, Labor favours subsidies that will primarily benefit consumers, car manufacturers and dealerships, while the Liberals are supporting infrastructure investment such as fast charging networks, which also benefits consumers and the car industry.

IPA members are responding to an unprecedented level of client inquiries for guidance on non-financial reporting, benchmarking and strategic advice. This has prompted the analysis.

“Our members’ clients are spending a significant portion of time and energy on non financial environmental, social and governance issues these days. It’s not just about the financials anymore. It’s impacting them from several different angles – supply chain, recruitment, retention and financing,” Ms Stylianou says.

Climate Policy Comparison

*Inclusive of Kyoto Protocol carry-over credits