Industries wary of Chris Bowen’s sector net zero plans

Labor’s sector-specific decarbonisation plans must take into account the impact of environmental offsets on farming and the increase to house prices, the industry has warned.

A wind farm on the outskirts of Canberra. Picture: NCA NewsWire / Martin Ollman

Labor’s sector-specific decarbonisation plans must take into account the impact of environmental offsets on farming and the increase to house prices that the transition to net zero will cause, peak industry bodies have warned.

Energy and Climate Change Minister Chris Bowen on Tuesday announced the government’s intention to develop plans for each of the six most heavily polluting industries – including agriculture, resources and the “built environment” – to get to net-zero by 2050.

While ruling out setting medium term sector-by-sector targets, Mr Bowen said the government would implement “quite detailed plans” that would give guidance to investors around the world on what each industry’s transition to net zero would look like.

Measures expected to be canvassed as part of the plans include fuel emission standards and tougher building codes.

In a speech to the Australian Clean Energy Summit, Mr Bowen said he was also seeking advice from the Climate Change Authority on a yet-to-be-­announced 2035 target that will build on the government’s promised 43 per cent cut to 2005 emissions by 2030.

National employer association Ai Group said the “practical plans for all those sectors can’t simply be imposed from above”.

“Policy has an important role, but it will be undirected and in­effectual without insights and investment from businesses and other stakeholders in each sector,” chief executive Innes Willox said.

Master Builders Australia nat­ional policy director Alexandra Waldren said there was no doubt the plan for the construction industry to reach net zero would come with increased costs to materials and, in turn, to house prices. “With every change, there will be an increase,” she said. “When materials have to change and systems change, it has an impact.”

According to Domain, house prices in Sydney are already forecast to be 6 per cent to 9 per cent higher by the end of June next year, while Melbourne house prices will increase by about 2 per cent.

Ms Waldren said the government would need to look at how to “offset the costs in some way” or else see the price of housing across the country jump further.

“Whether that be subsidies or the like … that needs to be considered as well,” she said.

Ms Waldren said the announcement of the industry-specific plan came as the sector grappled with Labor’s industrial relations reforms, such as same job, same pay laws, which added to the impending cost burden by limiting productivity.

National Farmers Federation chief Tony Mahar said while the agricultural sector would keep working towards being more sustainable, ensuring land was not “locked up” by government or companies seeking to offset emissions was critical.

“Farmland is the unspoken ‘net’ in ‘net zero’, so we’d hope every sectoral plan looks closely at the impact of offsets on food and fibre production,” he said. “We are definitely up for continuing to work in partnership to reduce emissions (but) we can’t ignore food security.”

Gretta Stephens, chief executive climate change and sustainability at BlueScope, said the Port Kembla facility would need significant investment to reach net zero.