Australia has averaged 9 million tonnes of carbon reductions each year since 2020. This must increase to 16 million tonnes a year to achieve the 2030 target, and rise again to 27 million tonnes a year to hit the 2035 goal.
The authority advised the government that 95 per cent of all electricity generation will have to come from renewables within the next 10 years, implying an almost total phaseout of coal-fired power plants. Half of all new cars sold between now and 2035 must be electric, the authority declared.
Grattan Institute energy and climate change deputy program director, Alison Reeve, said that for the electricity grid alone this would mean a near doubling of decarbonising efforts to date, despite a recent slowdown in wind and solar projects.
“We have to build 10 gigawatts worth of renewables every year between now and 2035, which is twice as much as we’ve ever managed to build in a single year,” Reeve said.
Climate Change and Energy Minister Chris Bowen said climate action was an unprecedented economic opportunity for Australia.
He acknowledged the government would review the safeguard mechanism, which effectively caps collective emissions from big polluters, and vehicle efficiency rules, next year. That process could impose greater emissions cuts on motorists, miners and manufacturers to reach the new target.
“The global shift to clean energy is the biggest economic transformation since the Industrial Revolution,” Bowen said.
In a series of funding announcements on Thursday, Albanese said the government would put $5 billion into a Net Zero Fund to help manufacturers and other industry switch to low-emissions technology, $2 billion into the Clean Energy Finance Corporation, $1.1 billion towards production of low-emissions fuel and $40 million to install EV chargers around the country.
Opposition Leader Sussan Ley said the Coalition, which has been riven by debates over net zero, was uniformly “dead against” Labor’s 2035 climate target and suggested the increased reliance on renewable energy had increased power bills.
“There is nothing in this announcement that demonstrates to Australians how much it will cost,” Ley said. “And that’s not reasonable for households, for businesses, for the hard-working manufacturers in this country who want answers and are seeing their electricity bills skyrocket.”
Albanese promised at the 2022 election that the green power shift would cut power bills by $275 by 2025. Instead, prices rose, which the government blamed on global issues and ageing coal power plants.
Grattan senior fellow Tony Wood said there were unlikely to be major emissions reductions from the electricity sector beyond 2030 and that land use changes, where emissions are reduced by keeping greenhouse gases locked away in the environment, were all but exhausted.
“Electricity and land use have done all the work so far,” Wood said, raising questions about where future cuts will come from.
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Wood said a carbon tax would be the most efficient and effective policy to drive emissions cuts around the country.
“It would be easier if we did have a single economy-wide climate policy, like a carbon price, but that’s been politically too difficult to do,” he said.
Under the Paris Agreement on climate change, countries are required to set increasingly ambitious targets every five years, and Australia is due to submit its goal before the United Nations’ next climate summit, known as COP30, to be hosted by Brazil in November.
This is viewed as a crucial move to boost Australia’s chances of delivering the government’s commitment to bringing the COP31 summit to Adelaide next year.
Business and industry groups are split over the target. Some in the mining and manufacturing sectors privately warn that the cost of achieving ambitious goals will be too high, while others like IKEA and Fortescue are publicly calling for ambitious commitments to drive investor confidence in clean technology. The government’s target falls in the middle of these expectations.
Minerals Council of Australia chief executive Tanya Constable welcomed the government’s announcement but warned the goal to reach as high as 70 per cent was “highly aspirational” and meeting the 62 per cent target would be “a formidable challenge”.
Fortescue executive chairman Andrew “Twiggy” Forrest, who has spent billions attempting to transform the company from a big polluter into a green energy business, said the target was a step in the right direction, but not enough.
“The upper range of its target – 70 per cent – must be a floor, not a ceiling,” Forrest said in a statement.
Climate and environmental lobbyists slammed the government’s target for lacking ambition, warning Australia would continue to contribute to dangerous levels of global warming.
Australian Marine Conservation Society chief executive Paul Gamblin said a baseline 62 per cent emissions cut by 2035 was too low for the world’s coral reefs.
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“Today’s 2035 target is on track with global warming of over 2 degrees, which will likely lead to the loss of 99 per cent of the world’s coral reefs,” Gamblin said.
The Australian Conservation Foundation’s climate and energy program manager, Gavan McFadzean, said the “timid” target showed the government was backing fossil fuel industries over the environment.
“Until the government stops approving new and expanded coal and gas projects it will continue to put more Australians in harm’s way,” McFadzean said.
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