For Climateworks Centre decarbonisation scenarios 2023, we asked our model for the lowest-cost pathways for Australia to deliver on the Paris Agreement and meet future energy demand in a growing economy.

The first of two scenarios sees Australia rapidly reducing emissions in line with limiting global warming to 1.5 degrees Celsius.

The second sees a slower pace of emissions reduction to help keep warming well below 2°C (we used a carbon budget in line with 1.8°C).

Both scenarios feature significant cuts to emissions across the Australian economy.

Complementing this emissions reduction effort is an unprecedented level of carbon dioxide removal (CDR).

This includes established nature-based sequestration practices such as tree planting, ecosystem restoration and emerging soil carbon capture techniques.

Our modelling also accounts for other CDR technologies, including direct air capture and carbon capture and storage. 

As noted above, our model accounts for direct air capture and carbon capture and storage, as well as land-based sequestration.

In both our scenarios, most CDR comes from land-based sequestration.

The use of carbon capture and storage is minor, being limited to certain industrial processes.

Direct air capture does not play a serious role until the 2040s, when the technology is assumed to be commercially viable.

What does this mean for Australia’s land sector?

Our scenarios suggest Australia needs many times more land-based sequestration to meet its Paris Agreement commitments. 

The scale of this potential increase presents challenges when managing competing land uses in a just and sustainable way. 

There is also the question of what policies can deliver this level of land-use change. 

The carbon market will play a significant role, but tax policies that encourage sustainable land use will likely also be needed.

How might these scenarios change? 

Climateworks has been producing whole-of-economy climate scenarios for Australia for a decade.

Our scenarios have evolved and will continue to evolve in response to new technologies, scientific insights or discoveries, and progress in meeting climate targets.

For example, it is possible that future decarbonisation scenarios will include different levels of CDR.

Some of the emissions in industry and transport that are currently considered hard to abate may be recategorised as new technologies emerge and mature in those sectors.

There is also the issue that while fossil fuel emissions stay in the atmosphere for thousands of years, most carbon that is stored in soils and vegetation is relatively temporary. 

This becomes an increasingly important consideration as climate change causes more intense bushfires and droughts. 

Climateworks is currently working with Deakin University on a model capable of identifying how to best use Australia’s land. 

This work will help Australia determine how best to sequester more carbon in the country’s landscapes, reverse biodiversity loss, and avoid pushing catchments into water stress while meeting growing agricultural demand.

This Land Use Trade-offs model version 2 (LUTO2) is helping answer these questions and will complement our whole-of-economy model findings.