Ms Steggall introduced her climate change bill to the Australian Parliament recently, proposing the country aims for net-zero emissions by 2050, as well as the establishment of an independent Climate Change Commission and the roll-out of risk assessment and adaption plans.
To reach the 2050 goal, the bill has outlined a process to review the target every five years, with independent advice on five-year emission budgets, which set a limit for what can be emitted during five-year periods.
Ms Steggall has declared Prime Minister Scott Morrison and the federal government can choose to either “continue with the handbrake on”, holding back on reforms, or they can accelerate and prepare the nation.
“We can be at the forefront, or you can hold Australia back, playing political games about it, and we will pay the price, business will pay the price,” Ms Steggall said during an Aware Super climate change roundtable.
“Everyday investors, people’s superannuation, everyone will pay a price from the delay that will be caused through political games playing.”
Despite the divisive politics around the issue, for Ms Steggall, the issue does not sit on the left or right end of the political spectrum.
“I would argue, as an independent, I am the best person to put this forward to be a circuit breaker in our discussion on how we approach climate change,” she said.
The investment community and private sector have already moved ahead of a somewhat stagnant government on climate change, Aware Super chief investment officer Damian Graham noted.
His fund has already targeted a 30 per cent reduction on carbon emissions in its listed equity portfolio over the next three years, as well committing to net-zero emissions by 2050 – but “more leadership and clarity would… accelerate that process”.
“We see that there’s a paralysis to that, which is just so unhelpful, whereby people say, well, I can’t invest on a long-term basis, because I’m unsure what the rules will be on that long-term basis,” Mr Graham said.
“It stops people making those decisions and taking action. But I think that’s not stopping businesses from moving in that way, and we certainly see some very concrete decisions and actions being taken.”
Aware Super chief executive Deanne Stewart echoed that a framework for a national plan with targets, action plans risk assessment and monitoring would be useful for investors, who are looking for businesses to prepare, monitor and report on their climate risk.
“A couple of other aspects of the bill that we also really like, one is the fact that it suggests an independent climate change commission that really assesses the risks, and continues to do that on an annual basis, advise the government and then continue to monitor on an ongoing basis,” Ms Stewart said.
She added the five-year adaption plan would be key to ensuring the transition occurs smoothly and does not leave communities and regional centres behind.
“It’s got a lot of those pragmatic elements to it that I think is very workable and provides more predictability, quite frankly, from an investor’s perspective,” Ms Stewart said.
Government could find itself ‘out of step' with business, states and international trading partners
Federal politicians have accused super funds of forgetting about their sole purpose and enacting climate activism through enforcing net-zero targets. Ms Stewart fired back at the criticisms by saying her fund would not be achieving stable long-term returns for its members’ retirements without addressing climate change in its portfolios.
“For me, it’s not anything to do with activism, it’s to do with being smart, getting ahead of the trend and really both protecting our members, but also on the other hand, looking for great opportunities,” she said.
Yet in a sense, states and territories have also moved ahead of the federal government, committing to net-zero by 2050, as pointed to by Ms Steggall.
“But everyone that I speak to still points out, we still need government to be lined up because we can have a situation where the federal government is out of step with not only our business community, but our state governments and our international trading partners,” the MP commented.
“We now have a situation where 70 per cent of our trading partners are committed to net-zero goals. We have a very real risk of border carbon tariffs being imposed on Australian exports if our policy doesn’t match up.”
The EU has made it clear that climate policy is a major component in negotiations for trade agreements, as Australia also strives to settle with the UK. Meanwhile, US President-elect Joe Biden has emphasised climate change as an issue on his agenda.
But Australia may not only cop pressure to prepare and adapt to climate change from its international peers – it could also expect to feel heat from its people.
“Communities are aware this is a problem for now. This isn’t a problem for 10 years’ time,” Ms Steggall said.
“We need people in admissions to hospital because of smoke inhalation from the bushfires, we have heat issues, serious unprecedented weather warnings, during the bushfires we had communities being evacuated.”
Mark Lewis, chief sustainability strategist at BNP Asset Management, commented while Australia is richly endowed with fossil fuels, it has some of the best renewable resources in the world, listing solar, wind and tidal.
“Australia could be an absolute renewable energy superpower. I think many external observers are confused as to why Australia is not leaping forward and it does seem to be the private sector thtat sees the opportunity there,” Mr Lewis said.
“The other thing is, we’re reaching a point where on a 10, 15-year view, you can think about exporting renewable energy directly with undersea cables.”
He pointed to a new solar plant in the Northern Territory that will export energy to Singapore.
“You’re backing the wrong horse if you keep trying to find excuses not to invest in renewable energy, and countries that are very well endowed naturally with renewable resources. That’s clearly where the future is,” Mr Lewis said.
Sarah Simpkins
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
