Australia has major opportunities in a net zero global economy from its renewable energy and mineral resources. However, Australia’s current high emissions intensity means that there are many challenges to transform the economy and reach net zero emissions. Climateworks research shows that solutions are available for emissions reductions in all sectors.

Climateworks recommends the Authority take a backcasting approach – a focus on how to achieve the end goal of a vibrant net zero economy in line with a 1.5 degree limit. Key to this will be providing agencies and stakeholders with credible pathways to this goal.

Climateworks recommends enhancements to the Authority’s Strategic Framework – importantly through an objective to achieve net zero emissions domestically in line with 1.5°C, positioning Australia as a leader in a net zero global economy. We also highlight work that could inform setting up systems that track policy impacts and Australia’s progress towards net zero.

Climateworks supports the Authority’s advice last year for the Australian Government to produce a detailed long-term strategy for emissions reductions. We recommend this long-term strategy includes sectoral emissions reduction pathways for one or more scenarios in line with a 1.5°C limit. We further recommend that the long-term strategy on emissions reductions sets out the overarching architecture (governance, institutions, and information systems) including a comprehensive policy suite to drive the necessary transformation of the Australian economy.

Climateworks recommends the Authority advises the government to set whole-of-economy targets in line with a least-cost pathway for a 1.5°C limit. This would include a 2035 target as part of the next nationally determined contribution (NDC). We also advice on an update to the current NDC – including a stronger 2030 target and an earlier net zero date. We recommend that advice on targets includes consideration of diplomatic priorities, trade links and investment attraction.

Climateworks is currently updating our scenario analysis of least-cost pathways, but our previous work with CSIRO suggests an appropriate level would be around 75 per cent by 2030, with net zero emissions achieved by 2035 (Climateworks Centre 2020).

Climateworks recommends advice to legislate national targets with and on other sectoral or location- specific targets or goals set in regulations. These other targets are important to ensure effective transformation of key sectors in line with Australia’s full obligations under the Paris Agreement. We highlight energy performance, transport and buildings as areas that would benefit from regulated targets or goals.

We further recommend a periodic and transparent process for reviewing targets and tracking progress, including any targets set through regulation or those used as indicators of progress.

We suggest the Authority, or equivalent independent institution, develop and hold whole-of economy and sectoral pathways for Australia under a range of scenarios for a 1.5°C limit. We recommend these include the emissions impacts of energy exports. Our detailed submission provides further advice and specific recommendations about setting and use of sectoral pathways.

Within the establishment of a governance and information architecture, Climateworks notes the importance of independent and reliable data and information platforms to create coordinated and coherent action. We recommend various areas where the government can play an important role, including developing sectoral emissions pathways and establishing information platforms and data. For example, changes to the National Greenhouse and Energy Reporting scheme during its review can improve this foundational piece of Australia’s information architecture.

Climateworks has many years of experience looking at the role of nature-based solutions and the land sector as part of Australia’s transformation to a net zero economy. We note that the potential for markets in this area is only part of the picture. We recommend work on a roadmap for nature-based solutions to drive large-scale change. Climateworks recommends a set of principles to underpin the Authority’s advice as part of the review of the Carbon Farming Initiative legislation, and any future advice on offsets. Principles include the integrity of offset creation, schemes and use, the optimisation of co-benefits and reduction of perverse outcomes, and constraints on long-term sustainability.

Based on our experience working with corporates, we make recommendations on how the Authority can advise government on its role to support corporate action, particularly through the development of sectoral pathways and resolving other data gaps. Support for companies to disclose and track Scope 3 emissions is an area where additional government work would be particularly useful.