The clock is ticking on the federal government’s big climate reveal: Australia’s 2035 emissions targets. The declaration is expected later this week, and will signal to the world how hard Australia will go to help avoid the worst effects of climate change.
Draft advice by the Climate Change Authority, which is advising the government on the target, flagged it may recommend a range of emissions cuts between 65-75%, from 2005 levels. The government is being pushed from both sides – to either go bold, or settle on a conservative figure.
Adding heat to the debate, the government on Monday released the National Climate Risk Assessment, which laid bare the frightening implications for Australia if global warming is not curbed.
So what must the government weigh up when choosing the 2035 emissions target? What is at stake? And how should we judge whether the government’s decision is good or bad?
The target must be genuinely achievable
Steep emissions reductions will be required across all sectors of the economy to land anywhere inside the 65-75% range by 2035.
Some sides of the debate, such as the Climate Council and Business for 75, suggest Australia can rapidly accelerate its pace of emissions reduction.
To deliver these emissions cuts in ten short years requires real-world investment and action. In the electricity sector, for example, an estimated A$142 billion in capital investment is needed for essential electricity infrastructure by 2050 – to deliver, among other things, a 140% increase in generation by 2035.
However, the rollout of electricity generation and transmission infrastructure is struggling to meet even the current 2030 targets. This should give optimists pause.
Other voices have sought to highlight the potential negative impacts of higher emissions targets. The Business Council of Australia, for example, says a target over 70% may send businesses offshore, leading to a loss of export earnings.
However, good policy design can avoid or minimise these outcomes. For example, the Safeguard Mechanism – which aims to reduce industrial pollution – already includes carefully designed rules for trade-exposed heavy industry.
Importantly, when it comes to setting an emissions target, all argument and analysis used to inform the decision should be evidence-based and grounded in reality. And real-world policies must be available to deliver the target.
So when assessing the achievability of the government’s target, we should ask ourselves:
– does the target reflect what the evidence says is possible in the next decade?
– how can Australia speed up action and negate potential economic and social harms?
– does the government have the right policies to achieve the targets?
The target must be genuinely ambitious
The benefits-versus-costs ratio of climate action has improved markedly in recent years, for several reasons.
First, the cost of renewable energy has fallen quickly. And analysis shows around 60% of the emissions reductions required to 2035 can be met using renewable energy and other existing technologies. These also have the potential to save households and businesses money.
Second, our understanding of current and future climate harms is growing. For example, as the National Climate Risk Assessment revealed, projected climate disaster costs could total $40.3 billion every year by 2050, even if global warming was limited to 1.5°C.
What’s more, Australia has much to gain from the global clean energy transition. Its world-class sun and wind resources can underpin new export industries in energy-intensive commodities such as iron and steel. My research in 2023 showed new energy industries and related opportunities could boost national income by at least $60 billion by 2050. The potential has only expanded since then.
Ambitious targets are important. They provide businesses with the clarity and confidence to deploy the capital and workers to actually make the net-zero transition happen. They are also crucial to attracting international investment and talent.
Conversely, a low target would discourage potential investors and entrepreneurs, and undermine Australia’s future prosperity.
Ambitious targets also motivate government, driving both policy tweaks and more substantive changes.
And Australia’s global reputation is on the line. We must walk the talk on climate – both to maintain our status as a responsible global citizen, and to encourage others to do the same.
All this strengthens the case for Australia to set the most ambitious target it can confidently achieve.
So when assessing the ambition of government’s target, we should ask ourselves:
– is it proportionate to climate impacts and threats we seek to avoid?
– will it attract the investment and talent needed?
– will it encourage (or discourage) stronger climate action by other countries?
Consolidating momentum
Global action is not yet sufficient to limit climate change to 1.5°C. However, the emissions curve has tilted down from previous runaway growth – and policy momentum is building.
Crafting an effective global response to climate change is a diabolical problem for the world’s democracies, but we are making progress.
Australia’s middle ground is now larger, more diverse and better-informed than it was 15 years ago. Many more people now understand the need for sensible emissions reduction and the potential benefits of the energy transition.
Some may argue Australia must go on a war footing – set a 2035 target of at least 85% and do whatever it takes to meet it. Maybe they’re right. But no democractically elected government could follow this path unless the majority of Australians were convinced.
Australia cannot afford to get stuck in the past. Setting – and delivering – an ambitious emissions target will leave the nation better placed than pursuing a timid target.
The 2035 target is a huge opportunity for Australia. The government must ensure it is evidence-based, achievable, ambitious, and in the national interest.
Steve Hatfield-Dodds is head of research for the EY Net Zero Centre. As EY-Parthenon Strategy’s Chief Climate Economics and Policy Officer (Oceania) he advises not-for-profits, businesses, and national, state and territory governments on climate and sustainability strategy. Recent engagements have included advice and expert review for Australian Treasury and the Climate Change Authority. He was a member of the Chubb Review of arrangements for Australian Carbon Credit Units in a personal capacity in 2022.
This article was originally published on The Conversation. Read the original article.
