Investment in climate change initiatives could be a solution to Australia’s cost of living pressures, with a new report subverting a decade’s worth of arguments that action on emissions would hurt back pockets.
The Climate Council’s latest report Power Up: 10 Climate Gamechangers shows the key actions needed for Australia to meet its 43 per cent emissions reduction target by 2030 haven’t changed much, be it adopting more battery storage to properly planning for coal plant closures.
However, with energy bills rocketing and the cost of insuring homes in bushfire, flood, coastal and drought zones creeping up every year, the cost-benefit equation of adopting fuel efficiency mandates or phasing in net-zero buildings standards looks more realistic.
“To be clear, that action on climate change is action on cost of living,” says Dr Simon Bradshaw, Climate Council director of research.
“The government is faced with this big challenge around cost of living, and energy prices in particular, and that really increases the imperative for [the likes of] fuel efficiency standards.
“We know if the government can pick off the low hanging fruit here, that is going to generate more momentum and more support for further action in the coming years.”
Climate Council CEO Amanda McKenzie says the transformation of Australia’s economy has been underway for some years thanks to actions taken by the States and Territories, but now action by the federal government is needed to accelerate those changes in ways that deal with cost of living pressures and job opportunities.
“What we’re proposing here is a plan to start to see pollution start to drop much more quickly,” she says. “We’re describing these solutions as the toolkit to build the entire house, to build the 21st century economy that is fit for purpose.”
Government needs to aim higher
The federal government’s emissions reduction target via the Climate Change Act 2022 was passed by the Senate on Friday last week, enshrining in law the aim to at minimum reduce greenhouse gas emissions by 43% compared to 2005 levels by 2030.
Labor’s current plans to achieve that goal consist of a $20 billion investment to modernise the electricity grid, create 10,000 “green apprentices”, beef up support for electric vehicles, consider fuel efficiency standards, and use the Safeguard Mechanism, which ensures Australia’s largest greenhouse gas emitters keep their net emissions below a baseline, to further slash their emissions.
But to avoid the worst of climate change consequences laid out in this year’s IPCC report of fires, floods, heatwaves and droughts, Australia will need to bring its net zero target, currently set for 2050, forward to at least the 2030s.
Bradshaw says the proposed “plug and play” solutions all use existing technologies and most could be implemented during the new government’s first term, but are stretch goals on top of its proposed commitments.
It starts with 100% renewables
The first four recommendations of 100% renewable energy, support for battery storage, investment in training people in “clean jobs”, and planning ahead for coal plant closures, are anticipated to quickly transform the energy sector which will then allow other industries from transport to buildings to begin their net-zero journeys.
The Climate Council argues the government should go “all in” on what the Australian Energy Market Operator (AEMO) calls its strong electrification scenario. In doing so, it says household disposable income would be 7% higher compared to business as usual.
Electrifying the transport industry would cut emissions from that sector in half by 2030, Bradshaw says.
However, a combination of mandatory fuel efficiency standards, greater support for electric vehicles (EVs) such as investing in charging infrastructure, electrifying buses, shifting buildings off gas, and removing some of the billions in direct and indirect subsidies for fossil fuels paid in Australia would be a powerful way to provide cheaper-to-run vehicles to everyday Aussies.
An energy sector running on renewables allows buildings to move towards net zero, but phasing out gas appliances and connections via an updated National Construction Code would push this forward.
“Whilst the initial financial outlay for new net zero buildings is around two per cent higher, this cost is spread over the typical 30-year life of a mortgage, whereas bill savings accrue from day one with close to zero power bills,” the report said.
“The average Australian household could save more than $5000 per year by the end of this decade and, collectively, the nation would be saving around $40 billion per year by 2030 by electrifying everything in the home. The Climate Council found an average saving of $450 per year on heating and cooling costs alone by improving energy efficiency in new homes to 7 Stars.”
The final recommendations were to ensure major polluters actually reduce their emissions such as redesigning the Safeguard Mechanism so loopholes such as not being able to hit targets simply via offsets are closed, and creating a comprehensive climate plan.
