An open letter, published as a full-page advertisement in today’s Australian Financial Review, calls for a higher emission reduction target for the electricity sector – well above the 26% proposed by the government’s National Energy Guarantee (NEG).

— See full letter in pdf below —

Signatories to the letter comprise high-profile business leaders, CEOs, academics, economists and investors, including Simon Holmes a Court, Dr Hugh Saddler, Dr Renate Egan, Dean Spaccavento, and Nobel Prize winner Professor Peter Doherty.

The letter warns that if policy fails to take advantage of technological advances in energy such as cheap renewables, storage and demand management, it will impose huge costs on other sectors of the Australian economy, where emissions reductions are harder to achieve.

“The coming together of such a respected group across these fields represents a broad agreement that a 26% target for energy is unacceptable,” Executive Director of The Australia Institute, Ben Oquist said.

“26% for the electricity sector does not make economic sense and would make Australia’s Paris commitment untenable. That will prolong the uncertainty for investors and in-turn lead to higher prices and less stability.

“The energy sector is the most economically efficient and technologically proven way to reduce emissions, and so its target must reflect that.

“Regardless of the merits of the proposed NEG design, the proposed target makes the scheme unworkable and will create more investor uncertainty which will lead to higher prices and less reliability.”

“What’s more it can only mean that abatement burden will be heavier for other sectors of the economy, such as agriculture, transport and construction,” Oquist said.