The Albanese Government revealed its 2035 emissions reduction target on Thursday. The ensuing debate has been polarised, but it has also been pretty one dimensional. With some notable exceptions, the commentary has almost entirely centred on the number: 62-70% below 2005 by 2035.
Don’t get me wrong, the number is important. But it is not the only thing that is important.
So let’s get the number out of the way: the Government could have been more ambitious. At the Energy Efficiency Council we called for a target of 75%. This was based of the science, and the insight that ambition unlocks achievement.
As Wright’s Law tells us, for many of the core, modular technologies our transition depends on, deployment drives down cost, which drives more deployment, which drives down cost further. It is a beautiful, virtuous circle that we need to lean into.
We also feel cautious about the very large range that is baked into the target. There is nothing wrong with a range in principle; there are many variables in this transition, and a range is a way of acknowledging that. Three or four percentage points would have been reasonable.
But where the Government landed – a range of eight points – dilutes the power of the target to drive the outcome we’re collectively working towards. Part of the reason to set a target is to coalesce disparate actors around a common goal. The danger of having such a large range is that different parts of government and industry solve for different ends of the band. And that, almost inevitably, works against achieving the more ambitious end of the spectrum.
Having said all that, we’re not co-signing the view that this target is unambitious. Getting into the sixties, and especially the high sixties, will take some doing. The CCA’s advice sets out just how much Australia needs to do to raise its run rate on emissions reduction:
“[A 62-70% reduction on 2005 levels by 2035] involves cutting Australia’s emissions by roughly half from the current level, requiring emissions to decline by around 19–24 Mt CO2-e per year on average from 2024 through to 2035. This compares with the average reduction of 9 Mt CO2-e per year achieved from 2005–2024, and the 16 Mt CO2-e per year required to reach the national 2030 target.”
Emissions reductions ticking up from 9 Mt a year to 19-24 Mt a year by the early 2030s would be quite an achievement, and not just because the numbers are bigger.
We are leaning very heavily on electricity sector decarbonisation at the moment – replacing coal generation with renewables. That avenue will be largely tapped out by the early 2030s.
That means we will need to up our rate of emissions reduction while simultaneously sourcing those reductions from new places: electrification of homes, industry and transport, beginning the switch to low carbon liquid fuels where we can, and efficiency, everywhere, all at once.
The good news is that modelling and analysis we released with Climateworks this week shows this is absolutely achievable. And hitting the high end of this new 2035 target – or pushing beyond it, into the mid 70s – opens up the possibility of Australia beating its 2030 target.
The deployment pathways for many of the efficiency and electrification technologies we need to get out on the ground will take time to scale. That means we need to start now, which could see us do better than the 43% target by 2030 – if we get our skates on.
The debate on targets will continue, and that’s fair. But let’s remember it’s about the journey as much as the destination. Australia needs a policy suite that is equal to these numbers; that’s what makes any target meaningful.
When it comes to the demand side, the Government made a good start yesterday with a suite of sensible investments on efficiency and electrification that will provide a strong foundation for scaling existing efforts in residential and commercial buildings.
Rolling out energy performance ratings for existing homes will help build momentum for a wave of renovations that put many more Australians in efficient electric homes.
Expanding the Commercial Building Disclosure program beyond offices will give many more businesses the tools they need to get off gas.
Revamping the Greenhouse and Energy Minimum Standards is long overdue, and will enable us to make sure all those electric appliances going into homes have flexibility functionality baked in so they can play nicely on a renewable grid.
But most exciting is Minister Bowen’s announcement that he’ll task AEMO with developing a Demand Side Statement of Opportunities. The DSOO will ensure – at long last – that we properly quantify the opportunity on the demand side of our energy system, what we need to do to unlock it, and make it actionable for ministers.
There is still a lot to process out of yesterday. The Government released over 700 pages of reports, plans and modelling, which we’re still working through.
However, there is one thing we’re confident about: the more energy we can focus on the journey – the policies and programs that will move the needle – the more likely it is that we’ll get to an ambitious destination.
Luke Menzel is CEO of the Energy Efficiency Council and co-host of the Let Me Sum Up podcast.
