Climate Change Authority must maintain manufacturing competition

The board of the government’s Climate Change Authority has ‘heavy responsibilities’ to maintain competitiveness in manufacturing, warns the Australian Industry Group (Ai Group).

The Authority will be lead by newly-appointed chief executive officer Anthea Harris (pictured), a former chief advisor for the Department of Climate Change and Energy Efficiency , and chaired by Bernie Fraser, former Reserve Bank Governor and Treasury Secretary.

"The Climate Change Authority, now with a full board, has a crucial role in advising on Australia’s climate and energy policies, and its priority should be maintaining the competitiveness of our trade-exposed industries," said Ai Group chief executive Innes Willox.

The Climate Change Authority is an independent body to provide advice on the government's policies for reducing carbon pollution, and male recommendations on the steps Australia should take towards the 2020 target and on the longer-term path towards the 2050 target.

"The Authority should weigh carefully the impacts of the policies they will consider on the future of large-employing sectors such as manufacturing. It is crucial that the Authority gives industry a full opportunity to provide insight from the front lines of our economy,” said Willox.

"The Authority’s immediate task is to review the Renewable Energy Target, which has already gone through multiple significant changes over the past four years. The costs of the RET have been higher than expected to date, largely because of a boom in small scale solar installations driven by generous multipliers under the RET itself, poorly coordinated State feed-in tariffs, and the plunging price of solar panels.

"The Authority will need to contain costs and ensure that this policy is genuinely complementary to the carbon tax, while respecting the significant investments that have already been made in renewable generation.”

Willox says the Authority should look at the current design of the carbon price, which involves fixed prices and floor prices that are “too high and significantly above other major carbon pricing schemes around the world.”

"Furthermore, with hundreds of climate and energy policies in place at all levels of government, it is important to have an expert body that can consider the whole tangle of often-conflicting or duplicative measures and recommend an efficient, coherent approach," Willox said.