Australia has committed to full decarbonisation by some point this century. But if we don’t commit soon to rapidly decarbonise, the decision may be forced upon us. Japan, South Korea, the UK, and the EU, among others, have already committed to net-zero by 2050. China has pledged net-zero by 2060. The Biden campaign in the US has committed to net-zero by 2050 and $2.4 trillion in climate initiatives. Canada has a nation-wide carbon price. Failing to commit soon to net-zero by 2050 will diminish our international standing, and harm our competitiveness.
But a net-zero commitment isn’t enough. We’re due to reduce our emissions by just 4.2% over the coming decade. On our current trajectory, we will only meet our Paris commitment by using carryover credits from the soon-defunct Kyoto Protocol. We should commit today to meet our Paris target without using our Kyoto credits. This can be achieved by halving our emissions from electricity within 10 years, as the UK did to 2018.
Reforming our energy sector can unlock the economic potential of our abundant natural resources, create new industries, and propel our economy into the future. We will need to overcome barriers to the transition, including disincentives to investment in transmission, the negative impacts on coal communities, and threats to the reliability of our electricity supply. Our goal should be to transition at minimum economic cost.
This consultation paper launches Blueprint Institute’s new energy policy initiative—Powering the next boom. It sets out the decarbonisation challenge we face in the decades ahead, and how we can confront it.
We canvas five topics critical to this effort:
- AUSTRALIA’S INTERNATIONAL STANDING. To protect our reputation and trade prospects, we should meet our Paris targets without Kyoto credits, and commit to net-zero by 2050.
- TRANSMISSION. We should remove the impediments to new transmission investment that exist, and accelerate projects that enable reliable decarbonisation.
- A FAIR TRANSITION FOR COAL COMMUNITIES. A path to net-zero must receive broad community support, which means supporting those harmed by the transition.
- CLEANTECH FINANCE. Further support for energy RD&D and commercialisation can help accelerate global decarbonisation, drive economic growth, and foster new industries.
- GREEN HYDROGEN. To unlock our natural advantage in green hydrogen, the Government should advance feasibility studies, pilot projects, and green aluminium and steel.
Electricity is the low-hanging fruit of decarbonisation. The path to net-zero extends far beyond the electricity sector. The Government should also consider investments to support decarbonisation through soil carbon, the lithium value chain, electric vehicles, energy IT, energy efficiency, and conservation and restoration, among others. Our future research will produce evidence-based recommendations to advance these solutions at lowest cost.