Submission: Energy and Electricity Sector Plan to shape clean economy

IGCC has long advocated for detailed sector by sector decarbonisation plans to support a least cost transition to net zero emissions. IGCC understands that these Sector Plans come at a time where a new 2035 Nationally Determined Contribution (NDC) will be set under the Paris Agreement. IGCC encourages the Government to set a 1.5 degree-aligned 2035 NDC to anchor the Sector Plans, providing an orderly pathway to achieve its Net Zero by 2050 Plan.

IGCC recommends that policy should begin with aspirational outcomes and mobilising investment should not be an outcome itself but integrated as a lever to achieve the outcomes. IGCC welcomes the outcomes stated by Prime Minister Albanese in his “a future made in Australia” speech and emphasises the following points:

1. Clean and affordable energy for all Australians; including for households, communities and industries.
2. Well-equipped workforces to transform Australia into being a renewable energy superpower.
3. Strong social infrastructure to support Australian communities in the transition to a net-zero society.
4. That under-represented communities are prioritised for social benefit sharing.

Investors are concerned that the world is not on track to meet the goals of the Paris Agreement, noting that the first Global Stocktake revealed a significant dearth of action across mitigation and adaptation. IGCC welcomes the Government support for the phase out of fossil fuels in energy systems by 2050 and an acceleration of clean energy deployment to replace them as part of the Global Stocktake undertaken at COP28. Whole-of-economy and systems-wide policies are now required for Australia achieve this outcome.

A least cost, whole-of-economy transition requires long-term policy clarity for investors, as they have a responsibility to generate returns for their shareholders and beneficiaries over multiple decades. Policy clarity, backed by clear demand signals and by public-private financing strategies, can de-risk new technologies and markets for investors, so that they can invest at the pace and scale required to meet Government decarbonisation targets. Investors rely on Governments to set phaseout dates for fossil fuels and policies to drive clean energy replacements, so that they have clarity around where to allocate funds. An uncoordinated transition will increase economic costs and lead to ongoing capital flight to markets with well-planned transition policy in place.

Read the full submission here.