Jim Snow, Oakley Greenwood Brisbane (August 2023).
Nine years ago, energy market professional Jim Snow warned of the economic risks of high energy prices in Australia caused by policymakers “picking winners”.
The recent “Net Zero” policy interventions in Australian energy markets exemplify this risk for energy markets and smack of electoral anxiety.
To reduce emissions, Australia should return to being confident in implementing well designed market mechanisms and use tradeable instruments that are fuel and technology agnostic, are based on sound economic principles and will give out investment signals to attract investors.
The policy and stakeholder focus needs to be on the design of these markets and instruments for the transition. There is a high level of flexibility available still to do this by various market sectors (e.g., difficult and expensive to abate sectors), but not by favoring one fuel or technology over another – let the market deliver as it is ready to do so quickly and at their own risk – they just need the right settings.