Australia’s governments should build a ‘bridge’ to support research, development, and deployment of technologies that could cut emissions at lowest cost.
Governments should fund basic research through universities and CSIRO using well-established criteria, and they should fund investment incentive programs such as capital grants where such funding has the potential to materially reduce costs.
Governments should give priority to market reforms where their absence is a barrier to commercial deployment of mature technologies. The private sector could then fund the large-scale investment needed – and at that stage governments should not invest directly or indirectly in technology support.
In the absence of some form of emissions constraint or carbon price, mechanisms such as reverse auctions, tradable green certificates, or green mandates may be effective, albeit less efficient, alternatives.