Investor group calls for 'credible' NEG emissions target
Investors with over $2 trillion in assets under management are calling for outstanding flaws in the design of the National Energy Guarantee to be addressed in order to establish much needed investment certainty.
The Investor Group on Climate Change has outlined three key outstanding issues that should be addressed before focus shifts towards the implementation of the National Energy Guarantee.
“Investors have been looking for policy certainty on climate change and energy policy for over a decade. While the National Energy Guarantee has the potential to deliver this certainty, unless the framework actually supports credible emission reductions, then it fails the test of the energy trilemma”, said Emma Herd, Chief Executive Officer of the Investor Group on Climate Change (IGCC).
“As it currently stands, the National Energy Guarantee will support almost no new investment after the end of the Renewable Energy Target in 2020. This would represent a lost opportunity to build on the momentum in the shift towards low carbon electricity generation currently underway in the electricity sector. It will also increase costs for other sections of the economy who will have to pick up the shortfall”.
“Unless we get the emission targets right, the best design in the world won’t add up to a credible pathway forward”.
“The National Energy Guarantee is not our first choice of mechanism, but it does provide an opportunity for Australia to move forward. The framework must set out credible emission reduction targets aligned with our international commitments under the Paris Agreement to work. The current targets set out in the framework and the mechanism for adjusting these targets need to be addressed”.