Dear Vicky,

On Thursday, the Liberals formally announced that they will be dumping net zero – with no clear plan to bring down energy bills or emissions, and creating uncertainty for businesses and investors.

Surprising? Not really. But disappointing.

We know that urgent climate action is needed, and that power bills need to come down. This is not the right policy to achieve either goal.

The announcements they’ve made are full of misinformation and contradictions – let’s have a look at what they’ve said so far and how it stacks up with the facts.

1. The Liberals say they will stay in the Paris Agreement, but dump Australia’s targets - net zero by 2050, and 43% emissions reduction by 2030.

Yet core to the Paris Agreement is that “efforts of all parties will represent a progression over time”, with each country required to set increasingly ambitious targets every five years to bring down their emissions. Given we’ve legislated our Paris targets, removing them would be contradictory to the progression required of us. It is hard to square how the Liberals’ reversal of the net zero goal can align with our Paris commitment.

2. The Liberals say their top priority is energy affordability and think the best way to get there is by scrapping net zero.

We all want lower power bills. But experts like the International Energy Agency are clear that following a pathway to net zero emissions by 2050 is the best way to bring household energy bills down. The CSIRO’s latest GenCost report found the total firmed cost of renewables (including storage and transmission) will be the lowest of all new-build technologies by 2030. And a recent study from Griffith University found that if we had relied solely on coal and gas instead of pursuing renewables, Australia’s wholesale power prices would be 30-50% higher today. In 2024, a full 40% of Australia’s electricity generation came from renewable sources. We need to stick with certainty and build on the progress we’ve made.

3. They say net zero is the reason our power bills are so high.

As Climate Change Authority CEO Matt Kean said, claiming that net zero is responsible for higher power prices is just dishonest. Gas prices have risen threefold over the past decade, and coal’s unreliability and price volatility have driven our electricity bills higher. The Institute for Energy, Economics and Financial Analysis points out the Liberals’ plan prioritises the highest-cost technologies, like nuclear, carbon capture, gas and coal.

4. They say abandoning net zero by 2050 is necessary to ensure reliability in our energy grid.

We face an uncertain future, with 90% of our coal-fired power stations projected to close by 2035. But abandoning our investments in renewables cannot be the answer. The Australian Energy Market Operator has set out a detailed blueprint for the lowest cost way to replace our ageing coal-fired power stations and transition to renewables – backed up by storage and gas peaking to ensure reliability.

5. They say they’re taking energy policy back to a market-based approach instead of “picking favourites” on renewables.

As Kate Chaney and I argued this week in the AFR, if the Liberals were serious about a true market-based approach to energy and climate policy, they would introduce an economy-wide carbon price (which John Howard took to the 2007 election). A carbon price would – in economics lingo – price the negative externalities (impacts not costed by the market) associated with producing emissions and incentivise cleaner, technology-neutral solutions. But since neither side of politics is currently proposing such an approach, we are in a world of second-best solutions. Expanding the capacity investment scheme to include coal and gas, for example, is not a market-based solution.

Our old energy system is reaching its use-by date. If we are going to achieve both reliability and affordability, we need investment. But business, industry and investors need certainty to guide their investments that will achieve reliability, cost and emissions reduction.

Major business groups, such as The Business Council of Australia, Australian Chamber of Commerce and Industry and the Australian Industry Group, have maintained that achieving our 2050 net zero goal is not just an environmental imperative but an investment opportunity – provided we give business the confidence that the policy settings will remain stable. Businesses won’t build multi-decade energy systems, if the next election might change the rules – uncertainty drives investment away.

I know many of you are frustrated at the Coalition’s attempt to upend our progress. I share your frustration.

But I’m not giving up – because the evidence is clear, and it points us in the right direction.

Warm regards,  

Allegra Spender MP
Member for Wentworth