“We won’t be able to buy our way to 26 to 28 per cent and beyond. We will need a credible, durable and bipartisan carbon policy to achieve this target,” he says. “We have shared the frustration of the stop-start approach to climate policy over the past decade, but at the same time we have learnt a lot, both here in Australia and globally, about what works and what doesn’t.”
But what could the new target and a new climate policy mean for the gas sector – an industry touted as the transition fuel to help Australia reach its lower emissions target but slowly focusing its energies on exports?
According to Mr Donoghue, without any stable policy outlook, the future for gas remains in paralysis.
“It is almost impossible to evaluate where new gas developments sit without long-term consistency in the political spectrum on this issue. Whereas if we had that [policy] it would be easier to see how
a new gas development would be consistent with the government’s policy ambitions,” he says.
“From the ESAA’s point of view, gas has the capability to play a valuable transitional role, though at this stage it is hard to know exactly what that will look like.”
Mr Donoghue listed emissions offset regimes and carbon capture storage technologies as two areas where gas could improve its suitability to a more climate-focused policy environment.
“There are also potentially interesting opportunities for using plant materials to convert into gas, which effectively should be carbon neutral over the full life cycle. But which of those things becomes useful in the long term, we will only find out if we have the right policies in place to allow development of the most cost-effective options.”
GAS BOOM UNDENIABLE IN CLIMATE POLICY DEVELOPMENT
But while Australia’s stagnant climate policy remains a difficulty for industry as a whole, the future remains bright for Australian LNG production and, according to Mr Donoghue, safe.