Australia needs to act now to lift its rate of carbon emissions reduction, or it has little chance of reaching net zero by 2050.
Getting to net zero could be the biggest economic transformation Australia has seen outside of wartime.
The task cannot be achieved by governments alone – it will require industries, markets, policies, and technologies working together. Much of the technology and many of the tools needed are available now.
Tackling climate change will bring costs and benefits for Australia. In some sectors the benefits of lower-emissions technologies will outweigh the costs of the transition. In others, big financial costs will remain even after our best cost-reduction efforts.
Some Australian exports, such as iron ore and other minerals, will be resilient. Others, such as coal and liquified natural gas, will need to be replaced.
Getting to net zero by 2050 will be hard, but there is more to be gained than lost as Australia’s economy transforms.
If we start now and play smart, we can use our vast resources of minerals and renewable energy to more than replace the export revenues – and jobs – that we currently get from fossil fuels.
This is the last of five reports Grattan Institute has published in the lead-up to the ‘COP26’ international climate conference in Glasgow, showing how Australia can build momentum in the transport, industrial, agriculture, and electricity sectors towards net zero.
The reports recommend sector-specific policies including a cap on vehicle emissions; bigger roles for the Emissions Reduction Fund, the Safeguard Mechanism, and energy efficiency obligations; giving priority to R&D into emissions-reducing technologies and their supply chains; more investment in the electricity grid; and better integration of state renewable electricity schemes.
All these should be underpinned by good governance, independent reviews, and a commitment to markets, including for robust, high-integrity offsetting credits for residual emissions.
The scale and structure of the policies implemented today will determine the cost of this historic transformation. Capitalising on Australia’s advantages will deliver the opportunities.
Action today is crucial to create momentum and to avoid locking in emissions for decades to come.
The Federal Government has finally set the objective. Our Towards net zero report series identifies the practical, no-regrets policies that can head Australia in the right direction.