Australian treasurer points out costs of missing net zero emissions target

Birds and a plane are seen flying over the emissions from the chimneys of a chemical plant near Port Botany in Sydney, Australia, June 2, 2017. REUTERS / David Gray

SYDNEY, Sept. 24 (Reuters) – Australia must align with developed countries and commit to reducing carbon emissions to net zero by 2050, or face higher borrowing costs, has his treasurer said on Friday, as pressure intensifies on the government to strengthen climate policies ahead of a key summit.

Australia, the highest per capita carbon emitter among the richest countries in the world, has resisted pressure to set such a target, but faces calls to take a stand ahead of the COP26 climate summit in November in Glasgow.

Treasurer Josh Frydenberg’s warning came as Prime Minister Scott Morrison struck an emissions reduction deal with Indian leader Narendra Modi focused on supplying low-cost hydrogen and solar energy.

Morrison’s conservative coalition is also facing an election by next May and most polls point to a defeat to the opposition Labor Party, which has a policy of achieving the goal of net zero.

The Nationals, the rural partner of the ruling coalition, oppose such a target lest it harm their constituents.

“We cannot run the risk that the markets mistakenly assume that we are not transitioning with the rest of the world,” Frydenberg said.

“If we were in this position, it would increase the cost of capital and reduce its availability,” he added in an online speech to the Australian Industry Group.

As global financial markets prepare to cut emissions, any limited access to foreign funds would increase borrowing costs, affecting interest rates on real estate and commercial loans and the financial viability of large infrastructure projects, a he declared.

Current policy is to reduce emissions from 26% to 28% by 2030 from 2005 levels, along with a commitment to spend A $ 18 billion ($ 13 billion) over 10 years on technologies to limit emissions, such as hydrogen, energy storage and carbon capture. .

Morrison, in the United States for a meeting of the Alliance of Quad Nations, said no formal decision has been made on a net-zero goal.

“We will think more about my return to Australia,” he told reporters in Washington, where he announced the deal with India.

“We recognize the changes underway and intend to be well positioned going forward to be successful with our industries in a new energy economy. “

National leader Barnaby Joyce, whose support would be essential for a change in federal policy, said Australia would risk an energy crisis if it committed to a goal without a plan.

“At the end of this graph are coldness and unemployment, and we don’t want either,” Joyce told reporters.

“It is very important for those in blue collar jobs… that they can pay for their house, pay for their car, stay in the life they have worked so hard for.”

The climate advocacy group, the Climate Council, said Australia was hampering global efforts on emissions, such as the United States’ spending commitment and the promised halt to investment in power plants in the United States. coal.

“The government still has not moved, despite calls to do more,” said Will Steffen, spokesperson for the group. “We are now one of the only advanced economies not to have yet taken these essential steps.”

($ 1 = AU $ 1.3716)

Reporting by Byron Kaye and Renju Jose in Sydney; Editing by Richard Pullin and Clarence Fernandez

Our Standards: Thomson Reuters Trust Principles.

Previous Silence on the payment of the bond; Unpaid EV staff: Evergrande update
Next Several analysts call these 3 stocks a buy