Energy Policy 165 (2022) 112945

Contents lists available at ScienceDirect

Energy Policy
journal homepage: www.elsevier.com/locate/enpol

‘Technology not taxes’: A viable Australian path to net zero emissions?

Steven Geroe
La Trobe University, Plenty Road, Melbourne, Victoria, 3083, Australia

A R T I C L E I N F O A B S T R A C T

Keywords: In the absence of a price on carbon and a renewable energy target supported by emissions credit trading, the
Low-carbon Australian Government is relying on financial support for early-stage technologies to reduce emissions: the
Net zero target ‘technology not taxes’ ‘principle’. Recent studies of global implementation indicate that pricing carbon is the
Carbon price
most economically efficient way to achieve economy-wide emissions reductions. Nonetheless, financial support
Technology investment
Renewable energy
for early-stage technology can be a useful complementary or ‘second best’ approach. Australia’s Technology
Green hydrogen Investment Roadmap and Net Zero Plan could be strengthened by detailed emissions plans on a sectoral basis,
Regulation supported by interim targets set in legislation. Projected fossil fuel exports in coming decades in the Net Zero
Plan are consistent with the Australian Government’s ‘gas led’ Covid 19 economic recovery strategy. This un­
derpins reliance on carbon capture and storage (CCS), despite cost and technical barriers that have led to
minimal development compared to renewable energy. In the absence of interim emissions targets, Australia risks
locking in fossil fuel developments on the basis of uncertain future CCS capacity. A Net Zero Plan focused pri­
marily on scale-up of renewable energy and its use to produce hydrogen, reflecting several influential reports,
state government initiatives and private sector mega projects, would have better prospects for achieving net zero
emissions.

1. Introduction policies, and other market-based mechanisms such as renewable port­

This paper considers whether the Australian government’s low-
carbon strategy, based on a key principle of ‘technology not taxes’,
(Australian Government Department of Industry, Science, Energy and
Resources, 2021 a), can provide a viable path to net zero emissions by
2050. The taxes that will not be imposed under this strategy clearly
relate to any measure resembling the fixed price phase of the Australian
Carbon Pricing Mechanism (CPM). The reference to technology relates
to the Australian Government’s Technology Investment Roadmap (the
Roadmap), described as ‘the cornerstone’ of Australia’s November 2021
Long-term Emissions Reduction Plan (Australian Government Depart­
ment of Industry, Science, Energy and Resources, 2021 b).
Section Two of the paper provides a summary overview of the CPM,
introduced by the Gillard Labour government in 2011, and repealed by
the Abbott Coalition government in 2014. It compares Australia’s
emissions reduction performance under the CPM with that of the United
Kingdom (UK). The UK implemented a Carbon Price Floor at a compa­
rable time and level to Australia, but did not subsequently repeal it. It
then summarises Australia’s successfully implemented 2020 Renewable
Energy Target. The section concludes with evidence from academic
evaluation of global implementation experience that carbon pricing
folio standards, are the most economically efficient means of greenhouse
(GHG) abatement. Section 3 covers current Australian low-carbon policy
including the Emissions Reduction Fund and associated Safeguard
Mechanism, the Carbon Solutions Package, and the Technology Invest­
ment Roadmap. It includes a discussion of academic perspectives on the
applications and limitations of policies supporting early-stage technol­
ogy, and an evaluation of Australia’s November 2021 plan to achieve net
zero emissions by 2050. Section 4 considers whether the Roadmap and
Long-term Emissions Plan have in fact identified likely ‘winners’, in
terms of early-stage technologies with potential for cost effective GHG
abatement. The focus is on comparing carbon capture and storage (CCS)
to renewable energy and hydrogen produced from it.
The concluding section argues that in the absence of a carbon price,
state financial support for early-stage technology can make a substantial
contribution to emissions abatement. The Australian Government’s
focus on co-investment and reverse auctions for state funding for
emission abatement projects and technologies limits financial costs for
taxpayers, and facilitates private sector involvement in investment de­
cision making. These policies must be implemented on objective criteria,
such as evidence of potential for low-cost abatement. The general policy
statements in the Technology Investment Roadmap and Long-term

E-mail address: stevegeroe@yahoo.com.au.

https://doi.org/10.1016/j.enpol.2022.112945
Received 22 July 2021; Received in revised form 9 March 2022; Accepted 24 March 2022
Available online 26 April 2022
0301-4215/© 2022 Elsevier Ltd. All rights reserved.
S. Geroe
Emissions Plan, could form the basis for detailed sectoral emissions re­
ductions plans. Regularly updated interim targets for each sector should
be specified in legislation, as in Germany. While this approach can form
the basis for effective scale-up of early-stage technology, the prospects
for economy wide emissions reductions are less positive. Planned
continuing fossil fuel development in coming decades will necessitate
substantial reliance on CCS, offsets, or emissions reductions in other
sectors. Scaling-up renewable energy, including for production of
hydrogen under the Technology Investment Roadmap would be more
cost effective, and could eliminate over 80 per cent of emissions arising
from fossil fuel combustion. This model of net zero transition would also
facilitate cost competitive development of low emissions steel,
aluminium, resource processing, manufacturing, buildings, transport,
and clean energy exports.
2. Australia’s Carbon Pricing Mechanism and renewable energy
target
This section summarises the implementation and repeal Australia’s
Carbon Pricing Mechanism (CPM) and associated impacts on emissions,
as compared to the UK Carbon Price Floor. It then outlines the completed
2020 Renewable Energy Target, and the absence of any national policy
to replace it.
The CPM was introduced by the Clean Energy Act 2011, and repealed
in 2014. It applied to Australia’s 377 largest GHG emitters, accounting
for about 60 per cent of Australia’s emissions. The fixed price phase was
due to transition to a market priced based ETS in 2015, starting at $A23
t/CO2e and rising 2.5 per cent annually in real terms. Facilities emitting
above 25 000 tonnes of CO2e were required to surrender permits. From
2012, emissions-intensive (mainly coal related) and trade-exposed in­
dustries received free permits up to 94.5 per cent or 66 per cent of the
industry average baseline, based on whether they were considered
highly or moderately emissions-intensive. This production-based allo­
cation declined at a rate of 1.3 per cent annually. All other carbon units
were to be auctioned by the government. During the fixed price phase
emissions were not limited. Thereafter the government was to set an
annual cap, set to implement Australia’s emissions reduction targets.
$14.9 billion in household assistance was to be provided, to offset the
price rises likely to be passed from liable entities to consumers (Clean
Energy Regulator, 2021).
The British Carbon Price Floor was set at a comparable level to the
fixed price phase of the Australian CPM, at a similar time. While there
are other factors influencing national emissions reductions, the results of
the British experience of persisting with the CPF can usefully be
compared to the Australian experience of repealing the CPM. Between
the introduction of the Australian carbon tax on 1 July 2012 and 30 June
2014, electricity demand in the National Electricity Market (NEM)
declined by 3.8 per cent, the emissions intensity of electricity supply by
4.6 per cent, and overall emissions by 8.2 per cent, compared to the two-
year period before the carbon price. In the period 4 GW of emissions-
intensive coal generation capacity was retired. Renewables and gas
generation both increased over the period, with renewables rising by
38% from June 2012 to June 2014 (Jotzo and O’Gorman, 2014). The
reduction in emissions intensity attributable to the impact of the carbon
price has been calculated as 24 kg CO2/MWh (2.7 per cent) in 2012/13,
and an additional4kg CO2/MWh (for a total of 28 kg CO2/MWh) (3.3
per cent) in 2013/14. The combined impact attributable to the carbon
price was a reduction of between 5 and 8 million tonnes of CO2e­
missions (3.2 to 5 per cent) in 2012/13, between 6 and 9 million tonnes
(3.5–5.6 per cent) in 2013/14, and between 11 and 17 million tonnes
cumulatively (Jotzo and O’Gorman, 2014).
In 2013 the U.K. introduced a carbon price floor (CPF). When the EU
ETS carbon price falls below a specified UK price floor, producers are
liable for the difference. In 2016 the price floor was 18£ ($US $24-$25),
double the level in 2013 (Carbon Tax Centre, 2021). U.K. emissions have
steadily declined since 1990, and more sharply since 2013, mostly in the
2
Energy Policy 165 (2022) 112945
electricity sector. Between the introduction of the tax in 2013 and 2016
power sector emissions fell from almost 150 MtCO2 to approximately 80
MtCO2 (United Kingdom Department for Business, Energy and Indus­
trial Strategy, 2017). British coal use has fallen 85 percent since 1990,
and 59 percent since 2015. In 2016 11.5 percent of British electricity
was generated by wind turbines and 9.2 percent by coal, with most of
the balance accounted for by a 45 percent increase in gas generation
(Vaughn, 2017). Britain’s emissions reduction target of 35 per cent
below 1990 levels by 2020 was achieved four years early. The 2020 UK
Energy White Paper opted to continue a UK ETS on almost identical lines
to the EU ETS. The 2021 price floor is 22 pounds (Ares, 2021).
The CPM has not been the only successful emissions mitigation
policy at a national level in Australia to have been discontinued. Under
the Renewable Energy Target (RET) scheme, the national target of
33,000 GW-hours (GWh) of renewable electricity generation in 2020
(roughly twenty percent) was achieved. The RET imposed obligations on
energy retailers and large industrial consumers to purchase a proportion
of energy from renewable sources, in wholesale electricity markets. It
was implemented through a renewable energy certificate trading
scheme designed to incentivise least cost abatement (Clean Energy
Regulator, 2018). The closing years of the RET saw record investment in
large-scale renewable generation in Australia, including over 2.2 GW in
2019 (Clean Energy Council, 2020a,b).
A small-scale RET (SRES)imposed similar obligations on liable en­
tities to surrender credits to the Clean Energy Regulator, representing
KWh of energy generated by small scale, distributed systems. Along with
state-based solar feed-in tariffs, the SRES was a key driver in Australia
installing the highest proportion of solar rooftop systems globally, with
2.46 systems on 21 per cent of homes by 2021. (Australian Government
Department of Industry, Science, Energy and Resources, 2021 c).
Following the termination of the large-scale RET in 2020, two po­
tential replacement policies (the Clean Energy Target and the National
Energy Guarantee) were rejected by the Coalition party room. In the
absence a substantial national policy incentivising investment in low-
emissions technology, low-carbon development has become increas­
ingly driven by large-scale state level renewable energy auctions and
energy efficiency programs, and commercial developments.1
A 2020 study by Burke, Jotzo and Best analysed data for 142 coun­
tries over more than twenty years, 43 of which had imposed an ETS or
carbon tax. It included a literature review of emissions impacts of carbon
prices in many jurisdictions. The results indicated that on average, these
countries’ GHG emissions increased around two per cent more slowly
than countries with no carbon price – equivalent to the average annual
emissions growth rate for the 142 countries was about two per cent.
Thus the impact of a carbon price is, on average, sufficient to reverse a
rising emissions trend. On average, an extra euro carbon price per tonne
was found to correlate with a reduction of annual emissions growth in
covered sectors of about 0.3 percentage points. The study methodology
controlled for numerous other factors, including the impact on emissions
of other policy instruments, improving technologies, population and
economic growth, economic shocks, measures to support renewables
and differences in fuel tax rates (Best et al., 2020). Consistently with
many other studies, it concluded that while a carbon price should be the
centrepiece of emissions policy, policy to support early-stage technology
can play a useful complementary role (Best et al., 2020; World Bank,
2021; OECD, 2016).
Like policies imposing a price on carbon, renewable portfolio stan­
dards (RPS) such as the RET are a form of market-based mechanism. In
such policies, market competition is utilised to maximise economic ef­
ficiency in resource allocation (Centre for Climate and Energy Solutions,
2021). Roughly half of US renewable energy development to 2021 has
been driven by RPS policies in many states (Barbose et al., 2021). The
successful implementation of the RET is consistent with that of US RPS,
1
See discussion in Section 4.
S. Geroe
in terms of performance in scaling-up low emissions technology. The
success of the CPM was consistent with that of the UK CPF, and carbon
pricing policies surveyed by Burke, Jotzo and Best, in achieving econ­
omy wide emission reductions. Accordingly, this paper concludes that
such market-based mechanisms should be central to Australian policy to
achieve net zero emissions by 2050.
3. Australia’s current low-carbon policy
3.1. The Emissions Reduction Fund and safeguard mechanism
After the repeal of the carbon tax in 2014, the Emissions Reduction
Fund (ERF) and its associated Safeguard Mechanism (SM) became the
Australian federal government’s main GHG emissions policy. The ERF is
a voluntary scheme, implemented through reverse auctions for gov­
ernment payments for emissions reduction projects. Participants can
earn Australian carbon credit units (ACCUs) for emissions reductions
achieved through accredited projects. One ACCU is earned for each
tonne of carbon dioxide equivalent (tCO2-e) stored or avoided by a
project. ACCUs can be sold to either to the government through a carbon
abatement contract, or in the secondary market. Buyers are entities with
obligations under the SM, or organisations with mitigation objectives
implemented through the voluntary carbon market (Clean Energy
Regulator, 2021 b).
The SM was initially designed to ensure liable entities’ emissions did
not exceed historical business as usual (BAU) baselines, set by the Clean
Energy Regulator. The rationale was to prevent emissions mitigated
through the ERF being offset by rising emissions elsewhere in the
economy. The ERF was designed only to reduce the emissions of firms
voluntarily tendering for abatement projects. The SM applies to facilities
with direct emissions over 100 000 t/CO2-e per year, covering around
half of Australia’s emissions. From 1 July 2018 covered facilities can
purchase and surrender ACCUs generated by ERF projects or on the
voluntary carbon market, to offset emissions over their baseline. 2019
amendments to SG baseline rules were designed to facilitate amending
baselines to reflect increases in actual production, and to incorporate
more emissions intensity as opposed to absolute emissions indicators.
Thus the safeguard mechanism is no longer designed to prevent in­
creases in economy wide emissions. The Labor opposition currently
proposes tightening baselines to reduce emissions by 43 percent
from 2005 levels by 2030 (Murphy, 2021).
The 100 million ACCUs traded since the inception of the ERF in
2014–2021 accounted for just two per cent of Australia’s emissions for
that time period (Carbon Market Institute, 2021). A large proportion of
ERF spending has been on avoided clearance of vegetation on private
properties. The ERF built on the Carbon Farming Initiative (CFI), in that
CFI projects can bid into the ERF for funding (Clean Energy Regulator,
2021 c). The CFI was a voluntary opt-in scheme for farmers seeking to
generate offset credits when the carbon tax transitioned into an ETS in
2015 (agricultural emissions were excluded from the CPM). CFI projects
include avoided emissions of methane from livestock or rice fields, soil,
landfill gas, or from the burning of savannas or grasslands, crop stub­
ble/residue, or sugar cane before harvest. It also includes
bio-sequestration projects through soil carbon farming projects such as
cover cropping, minimum tillage and biochar, and farm forestry pro­
jects. To April 2021 $2.55 billion was contracted for 499 projects
covering 205 MtCO2e of emissions abatement. Of this vegetation pro­
jects covered 138.6 MtCO2e, landfill and waste 25.9 MtCO2e, agricul­
ture 15 MtCO2e and savannah burning (mostly by indigenous peoples to
manage larger fire risks) 13.6 MtCO2e (Clean Energy Regulator, 2021
d).
Australian low-carbon regulation post CPM has been characterised
by an accumulation of policies and programs building on their pre­
decessors, the latest of which is the Climate Solutions Fund (CSF). A
2019 review of the ERF recommended amending, not terminating and
replacing the ERF and SM. Thus the CSF is not intended to repeal and
3
Energy Policy 165 (2022) 112945
replace the ERF, but will introduce changes in terms of additional cat­
egories of projects funded (for example hard to abate sectors in heavy
industry such as aluminium, freight transport and aviation), types of
financing (such as leveraging private investment), and funding appli­
cation processes (Ludlow, 2020).
The CSF is part of the $A 3.5 billion Climate Solutions Package, that
also includes funding for the Snowy 2.0 hydroelectric project, the Bat­
tery of the Nation Project in Tasmania and the Future Fuels Strategy.
Under this strategy the Australian Government will co-invest with the
private sector to fund 50,000 electric vehicle (EV) charging stations
(Australian Renewable Energy Agency, 2021). It does not include sub­
sidies, tax incentives, EV sales targets or minimum fuel emission stan­
dards, unlike many countries with relatively high rollout of EVs. (Belot,
2021). Additionally, in November 2021 the Australian Government
announced a $A 500 million Low Emissions Technology Commerciali­
sation Fund (LETCF), through which the CEFC will leverage a further
$500 million private investment (Clean Energy Financing Corporation,
2021). The relationship between the LETCF fund and the CSF is yet to be
clarified. Despite announcement of the CSF in 2019, the web site of the
Clean Energy Regulator as of March 2022 does not indicate examples of
CSF funding of project categories additional to pre-existing ERF project
types.
3.2. The Technology Investment Roadmap
The agglomerated mechanisms of the CFI, ERF, CSF and LETCF,
along with the Technology Investment Roadmap (the Roadmap) form
the core of the current Australian government’s GHG emissions policy.
The Roadmap also forms the ‘cornerstone’ policy supporting the 2050
net zero plan announced by the Australian Government in November
2021 (Australian Government Department of Industry, Science, Energy
and Resources b). The Roadmap does not rely on any specifically created
regulatory mechanism. Rather it outlines a strategy for government to
financially support selected technologies, and related institutional sup­
port. Complementary policy is mentioned only in general terms, such as
de-risking priority low emissions technologies, offtake agreements,
supporting voluntary emissions reductions through the ERF, govern­
ment procurement, and Australian Renewable Energy Agency (ARENA),
CEFC and Clean Energy Regulator (CER) funding. Its ‘Priority Technol­
ogy Stretch Goals’ are:
• Clean hydrogen for under $2 per kilogram
• Electricity from storage for firming under $100 per MWh (to enable
firmed wind and solar at pricing at or below current average
wholesale electricity prices)
• Low emissions steel production under $900 per tonne and low
emissions aluminium under $2,700 per tonne
• CCS–CO2 compressions, hub transport and storage for under $20 per
tonne of CO2
• Soil carbon measurement for under $3 per hectare per year
The Australian Government aims to invest over $20 billion in low
emissions technologies over the decade to 2030, leveraging $3–5 of
private investment for each $1 of Commonwealth government invest­
ment, to achieve $80 billion of domestic investment by 2030 (Australian
Government Department of Industry, Science, Energy and Resources a).
The Roadmap proposes a model of public-private partnership,
involving enhanced coordination between the CEFC, ARENA, and the
CER and private enterprise to deliver investment priorities identified in
the plan. A Technology Investment Advisory Council, including the
Chairs of the above agencies, will advise on Low Emissions Technology
Statements that will guide their investment mandates (Australian
Department of Industry, Science, Energy and Resources, 2020). More
specific technology statements will be provided in relation to hydrogen,
bioenergy, critical minerals, an integrated system plan for national
network energy infrastructure, waste, energy and future fuels. The
S. Geroe
development of new battery mineral reserves is being encouraged
through the 2019 Critical Minerals Strategy.
Funding commitments under the Long-term Emissions Reduction
Plan, and other commitments made during COP26 in November 2021,
update those in the First Low-emissions Technology Statement 2020. Of
the $A 20 billion total in the Long-term Emissions Reduction Plan, half is
committed to co-investment projects through the CEFC. This includes $1
billion for the CEFC’s Grid Reliability Fund, for projects in energy
storage and generation, transmission and distribution infrastructure,
and grid stabilising technologies. $A1.4 billion is committed for finan­
cial support for early-stage projects through the Australian Renewable
Energy Agency. $2 billion is allocated to the CSF, matching existing
commitments. The $A 2.5 billion indicated for the ERF approximately
matches total ERF spending from 2014 to 2021, and does not appear to
be additional spending. $A565 million is committed for international
low emissions technology partnerships. Over $1.2 billion has been
committed to supporting clean hydrogen, including up to 7 Clean
Hydrogen Industrial Hubs, and over $300 million for Carbon Capture
Use and Storage (CCUS) hubs and technologies. The plan does not
specify whether spending on Clean Hydrogen Industrial Hubs will focus
on CCUS or producing hydrogen from renewable energy generated
electricity. Additionally, the Australian government has committed
$A280 million to purchase SM Credits (SMCs), representing below
baseline emissions for ‘transformative’ abatement or sequestration
technologies that could include CCS (Australian Government Depart­
ment of Industry, Science, Energy and Resources, 2021 a). As the
Australian Government plans to amend the CEFC Act to include in­
vestment in CCS in the CEFC investment mandate (Grattan, 2021), the
level of expenditure on CCS under the Roadmap and Long-term Emis­
sions Reduction Plan is not clear. CCS funding will be used for research
and development projects into commercial operations in power gener­
ation, oil and gas extraction, natural gas processing, and coal gasifica­
tion or methane reforming for hydrogen production and other purposes
(Australian Government Department of Industry, Science, Energy and
Resources, 2020).
The funding commitments of $A20 billion by 2030 are lower per unit
of GDP than programs in other developed jurisdictions such as the EU
Green Deal (EUCommission, 2020; Harvey and Rankin, 2020). None­
theless they are bolstered with plans to leverage four times that amount
in private investment. This model has been implemented effectively by
the CEFC. A a total of $A 9.54 billion was leveraged at $2.40 of private
investment for every $1.00 committed by the CEFC to November 2021
(CEFC, 2021 b), with investments delivering a net capital gain to the
CEFC (CEFC, 2019). Some analysts have concluded that economically
efficient mitigation outcomes can be achieved through energy efficiency
projects in the aluminium and steel industry, an area identified in the
Roadmap as suitable for such co-investment (Wood et al., 2020; Repu­
tex, 2015).
3.3. State financial support for early-stage technology: uses and
limitations
State financial support for early-stage low-emissions technology in
Australia includes co-investment through the CSF, investment in low-
emissions through public sector agencies (the CEFC), government pro­
curement, competitive tendering programs for emissions abatement
projects (the ERF), de-risking investment through long-term offtake
contracts, and integrated planning and institutional support for private
sector investment through specialised low-carbon agencies (ARENA, the
CEFC and the CER).
It does not include tax incentives for low-emission technologies (such
as tax credit financing or accelerated depreciation for specified tech­
nology investments), pressure to shift to low-emissions technology
through increased regulatory standards on polluting industries (such
augmented emissions standards for coal fired plants or vehicles), or
increased taxes or charges on polluting entities. One advantage of
4
Energy Policy 165 (2022) 112945
exclusively adopting incentives as opposed to costs is that it is less likely
to meet industry resistance, as occurred with the Carbon Pricing
Mechanism and subsequent Australian low-carbon policy (Mazengarb,
2020; InfluenceMap, 2020). Avoiding tax incentives that could favour
low-emitting industries over fossil fuel industries also shares this
advantage, as does expanding the mandate of the CEFC to fund CCS in
fossil fuel plants.
State financial support for early-stage technology has been regarded
as useful complementary policy for carbon pricing. This is because a
carbon price can only address the market externality of costs of pollution
that are not otherwise born by the polluter. Complementary policy can
play a useful role in addressing the market failure relating to investment
in low-emissions technology that is not currently cost competitive (Fay
et al., 2020; Jaffe et al., 2005; Wood, 2012). More targeted support is
needed for technologies deemed to have greater potential for emissions
reductions than other low-emission technologies, for example solar as
opposed to wind generation. Nonetheless such policy used a substitute
for a carbon price is likely to be costly (Fay et al., 2015). Reliance on
such policies may be a second-best option, however, in circumstances
where a carbon price is politically unfeasible. Jaffe et al. note that pol­
icies subsidizing technology receive considerable political support in
most countries, perhaps because their benefits tend to be focused while
the costs are dispersed (Jaffe et al., 2005). Indeed this is the position
taken by Professor Ross Garnaut, lead author of the Garnaut Review on
climate change policy that informed the drafting of the CPM, in
concluding that regulation and government funding are the main al­
ternatives to carbon pricing (Garnaut, 2019).
Tony Wood of the Grattan Institute observes: ‘Supporting new or
emerging technologies to achieve major cost reductions is a well-
recognised economic policy function. Continuing subsidies are not.
The government must be prepared to walk away from failures and to
release likely winners to the commercial pressures of the market. This
process and its funding are the big hurdles to the road map’s success
(Wood, 2012). Such policies should be implemented on evidence-based
criteria that is applied to all prospective technologies on the same basis
(Garnaut, 2019), such as demonstrated least cost abatement or evidence
of potential for cost reduction (Wood, 2012). That would be consistent
with the plan’s ‘key principle’ of driving down the cost of a portfolio of
low-emissions to parity [with existing technologies] (Australian Gov­
ernment Department of Industry, Science, Energy and Resources, 2021
a).
3.4. Australia’s long-term Emissions Reduction Plan
The Technology Investment Roadmap may be effective in achieving
its limited objective of scaling-up selected technologies, particularly
those with a credible case for cost-effective abatement. An effective
economy-wide emissions strategy based on this approach would be
strengthened by a more detailed roadmap of measures to reduce emis­
sions sector-by-sector. The Australian Government’s November 2021
commitment to net zero by 2050, supported by modelling of imple­
mentation measures, is a positive but embryonic step in this direction.
Its modelling relates to the stretch goals in the Technology Investment
Roadmap. It presents graphs and charts depicting the results of model­
ling by the Department of Industry, Science, Energy and Resources, and
McKinsey Consulting. It does not include explanations or details of how
the modelling was conducted. Nor does it explain how apparently
detailed and accurate modelling of emissions outcomes thirty years
hence can be calculated on the basis of the vague and general indications
of policy in the Roadmap, and supporting polices such as the National
Energy Productivity Plan. There are no alternative scenarios presented
for differing outcomes in terms of factors such as future technology
development, fuel costs, economic conditions, or international GHG-
related policy. The sections on various technologies, for example CCS,
are reiterations of the generalities in the Roadmap without additional
financial analysis of projected future costs (Australian Government
S. Geroe
Department of Industry, Science, Energy and Resources, 2021 a). A
section on ‘Seizing Opportunities in New and Traditional Markets’ in­
dicates Australia is a global top 2 exporter of coal and LNG (Australian
Government Department of Industry, Science, Energy and Resources,
2021 a). It projects coal exports halving by 2050, but continued growth
in gas exports to 2030, consistently with Australian government policy
of a gas led recovery (Australian Government Department of Industry,
Science, Energy and Resources, 2021 a). This is also consistent with
Australia’s refusal to sign pledges to cease new coal mine development,
and to limit methane emissions at the November 2021 COP 26 meeting
in Glasgow (Higgins, 2021; Morton, 2021). This is despite recognition by
the International Energy Agency that ending new approval of new or
extended coal mines, oil and gas fields and coal plants without CCS
immediately will be necessary to limit global warming to 1.5◦ above
2005 levels (Jaber et al., 2021).
The Long-term Emissions Reduction Plan refers to a wide range of
other policy documents as a basis for its modelling, some of which are
more developed than others. For example, the 2015 National Energy
Productivity Plan established a target of increasing energy productivity
(i.e. reducing emissions per unit of output) by 40 per cent from 2015 to
2030 (Australian Government Department of Industry, Science, Energy
and Resources, 2015). While a number of sources have concluded that
improving industrial energy efficiency is among the most cost-effective
forms of efficiency abatement (Wood et al., 2020; Reputex, 2015), a
2019 study concluded that the progress with the NEPP had stalled
(Bhattacharya et al., 2020). A planned NEPP dashboard presenting
detailed metrics on progress under the NEPP is not available, and the last
annual review was in 2018 ((Australian Government Department of
Industry, Science, Energy and Resources, 2021). While Australia has a
number of well-established voluntary certification schemes for both
residential and commercial buildings,2 it has not implemented a
large-scale program of residential energy efficiency retrofits as has the
US or France (Beyond Zero Emissions, 2020). Given the emissions
abatement and employment potential of this approach, it could form a
useful complement to the Roadmap. As with renewable energy after the
termination of the RET, most building energy efficiency programs are
delivered at a state level.3 Co-investment for industrial energy efficiency
projects under the CSF has yet to begin, despite program announcement
in 2019.4 More encouragingly, Australian energy regulators have
worked collaboratively on a range of existing and proposed reforms
intended to drive cost reflective tariffs, demand side management, and
integration of distributed power through virtual power plants involving
coordinated use of PV systems, battery storage and smart metering
(Energy Security Board, 2021).
4. Have the Roadmap and Long-term emissions plan picked the
technology winners?
In the absence of market-based policy mechanisms such as carbon
pricing and RPS, reliance on state support of specified technologies is
unavoidably associated with the need to select the most cost-effective
options for GHG abatement at scale. This leads to the vexed question
of funding of CCS under the Roadmap, and its prominent position in
Australia’s Long-term Emissions Plan. Some commentators have
2
For example, the Green Star program is administered by the Green Building
Council of Australia https://new.gbca.org.au/The largest scale program is the
National Australian Built Environment Rating System (NABERS), https://www.
nabers.gov.au/about/what-nabersSee also Leadership in Energy and Environ­
mental Design (LEED) https://www.certifiedenergy.com.au/leed.
3 companies’ net zero strategies, an inference can be drawn as to
For example, Victorian Energy Upgrades https://www.energy.vic.gov.
au/energy-efficiency/victorian-energy-upgrades/about-the-programVictorian
Building Authority Energy Efficiency Requirements https://www.vba.vic.gov.
au/consumers/home-renovation-essentials/energy-efficient-requirements.
4
As discussed in Section 3.1.
5
Energy Policy 165 (2022) 112945
concluded argued that CCS faces barriers to deployment additional to
those facing all early-stage technologies. Tony Wood argues that ‘ … the
size of the investment needed is so great that it is almost always a ‘bet the
company’ decision. This leaves few serious proponents standing. As a
result, the rate of learning-by-doing will be much slower, especially if it
is in just one country … the size of CCS projects means they could
dominate and distort the entire scheme (Wood, 2012).’ Additionally,
financial support for CCS is complicated by the involvement of multiple
companies in the CCS supply chain, combining power generation,
capturing CO2 emissions, liquid CO2 transport and geological storage.
A 2020 study by the Victoria Energy Institute found that coal gen­
eration with CCS in Australia is likely to cost at least six times as much as
wind generation and storage with equivalent dispatchable capacity
(Mountain, 2020). The study indicates that only two commercial-scale
CCS facilities exist for electricity generation globally. One has been
decommissioned, the other is operating well below its design capacity.
Seven proposals have been studied but rejected. The study cites the
Global CCS Institute’s 2019 “Global Status of CCS Report”, which in­
dicates the cost of carbon capture at the two existing post-combustion
capture coal-fired plants (Boundary Dam in Canada and Petra Nova in
Texas) is USD110 (AUD157) and USD65 (AUD93) per tonne CO2
respectively. If the Boundary Dam plant had achieved the planned 90
per cent capture rate, that would translate into capture costs of
AUD141/MWh and AUD84/MWh respectively. In its four years of
operation it captured only half of this, and both plants have been
decommissioned. Nine planned CCS plants that did not proceed to
construction had projected operational costs between those of Boundary
Dam and Petra Nova. The Victoria Energy Institute study found that the
combined costs of capture, transport and sequestration amount to $160
per tonne CO2. Assuming 90 per cent of a coal generator’s emissions are
captured and stored, this amounts to a cost of $144/MWh. If levelized
costs of electricity (LCOE) of $126 and $168 per MWh for black coal and
$160 and $209 per MWh for brown coal are added, the total cost is
between $280/MWh and $363/MWh (Mountain, 2020).
In contrast, at the Australian Capital Territory September renewable
energy auction, the winning bid was awarded a 14-year contract, un­
indexed, paying $44.97/MWh for the 100 MW of wind generation,
including storage equivalent to 0.1 MW and 0.2 MWh per MW of wind
power offered. This is at the bottom of the cost range predicted in 2019
by the CSIRO for wind and solar with 2 h of battery storage of $48–$75/
MWh. For 38 solar/battery projects developed in the United States,
which on average had battery capacity equivalent to 68 per cent of the
PV capacity, the weighted average levelised power purchase agreement
price was US$34/MWh (Mountain, 2020; Longden et al., 2020).
A 2020 IEA report that strongly advocates scaling-up CCUS (carbon
capture use and storage) also concluded that it ‘has not advanced as fast
as needed’. It cites reasons including high costs, lack of consistent policy
support, difficulty of integrating different elements in the supply chain,
technical risks of CCS in some locations, problems allocating commercial
risks among project partners in the supply chain, difficulty securing
finance and public resistance to storage (particularly in Europe) (Gul
et al., 2020). The report indicates there were twenty commercial Carbon
Capture Use and Storage (CCUS) facilities in 2020, about three quarters
used for enhanced oil recovery (EOR) as opposed to dedicated storage. It
recognises that CCS technologies would need to be massively scaled-up
over the next decade to contribute to net zero transition. It notes that:
‘Investment in CCUS has also fallen well behind that of other clean en­
ergy technologies. Annual investment in CCUS has consistently
accounted for less than 0.5 per cent of global investment in clean energy
and efficiency technologies’ (Gul et al., 2021). Given the resources of the
global fossil fuel industry, and the central role of CCS in many fossil fuel
continuing commercial and technical barriers to CCS project viability.
No general conclusions on total current CCS costs across the supply
chain are made in the IEA report, given variations between technologies,
locations and types of projects. As the report recognises that CCS has not
S. Geroe
attracted investment on a commercial basis as has renewable energy, the
argument is essentially for sustained policy support to drive industry
scale-up.
While the Technology Investment Roadmap ‘stretch goal’ for CCS of
$A20 tonne appears aspirational, the goal of clean hydrogen for $2 kg
appears more feasible. A 2020 Australian National University report
estimated that Australia could currently produce green hydrogen at
about $3.18–3.80 per kg. It concluded that: ‘Given rapid past reductions
in renewable energy supply costs and the prospect of sustained re­
ductions in electrolyser capital costs, the production of green hydrogen
at costs of below A$3/kg is likely to be possible, and a reduction of
production costs over the next decade to approach A$2/kg is plausible.
Australia is well placed to achieve low-cost green hydrogen production
due to its low-cost renewable energy supply and the potential to achieve
large economies of scale’ (Longden et al., 2020).
This reflects global costs declines between 2010 and 2020 of 85 per
cent for utility-scale solar photovoltaics (PV) and 56 per cent for onshore
wind. These prices are cost competitive with coal as the cheapest form of
fossil fuel generation, in the absence of state financial support (Inter­
national Renewable Energy Agency, 2021). The global average levelised
cost of solar PV generation in 2019 was $US 40, wind $41 and coal $109
(Webb et al., 2020).5 A 2020 Australian Reserve Bank report also found
that the LCOE for new renewable power plants had declined signifi­
cantly since 2010, and is estimated to be between 40 and 60 per cent of
the cost of a new fossil fuel plant (de Atholia et al., 2020).
Webb et al. calculate the average Australian cost of battery storage of
$64.68 MWh and solar generation $47.68 ($112.36) for 12 h with bat­
tery storage. Give solar costs without battery storage ($47.68), this
produces an average cost of $80 per MWh. For wind an equivalent
calculation produces a cost of $126.4 for 12 h with battery storage and
an average of $94.06 per MWh. Thus average costs per MWh of solar and
wind plus storage are below that of combined cycle gas turbine
($101.41) black coal ($105.21) and brown coal ($99.61). As retrofitting
with carbon capture and storage would increase costs, the cost advan­
tage of renewables is even greater.
Webb et al. conclude that due to continuing steep cost declines,
combined renewable generation and battery storage costs are competi­
tive with coal generation.6 A 2017 Australian National University study
modelling a pathway to 100 per cent renewable generation recommends
grid design to limit supply shortfalls by taking advantage of different
weather systems. Energy balance between supply and demand can be
maintained by adding sufficient pumped hydro, long distance high
voltage transmission lines and excess wind and PV capacity. These ad­
ditions are calculated as the levelised cost of balancing (LCOB). In the
study, LCOB is combined with levelised cost of annual generation
(LCOG), to provide the levelised cost of electricity (LCOE). The study
concluded that with PV and wind in the price range of AU$50/MWh, the
LCOE of a balanced 100% renewable electricity system is around AU
$75/MWh, as compared to the estimated LCOE from a new supercritical
black coal power station in Australia of AU$80/MWh (Australian Na­
tional University, 2017). Thus on 2019 solar costs, as calculated by
Webb et al., even including the system wide balancing costs of one
hundred per cent renewable generation would still be cheaper than coal
generation.
The ANU study was based on wind and photovoltaics (PV) providing
90% of annual electricity, with existing hydro and biomass providing the
balance. It notes that wind and solar PV have provided almost all new
Australian generation capacity in recent years, due to their cost
5
Webb et al. define LCOE as the present value of the total cost of building
and operating a power plant over an assumed lifetime. As such it measures
generation costs, but not system-wide ‘costs’ of intermittency or external costs
such as transmission.
6
Table◦ 1, ‘Australia’s levelized cost of energy and cost of energy storage’,
368; 371.
6
Energy Policy 165 (2022) 112945
competitiveness. The Commonwealth Scientific and Industrial Research
Organisation (CSIRO) projects that wind and solar PV supported by
battery and pumped hydro energy storage will achieve the highest
shares of total global generation capacity to 2050: 60 per cent under its
central scenario and 78 percent under its high penetration scenario7
(Graham et al., 2020). The 2020 Australian Energy Market Operator
(AEMO) Renewable Integration Study (RIS) Stage 1 finds that, to 2025,
in the event its recommended actions were implemented the National
Electricity Market (NEM) could be operated securely with up to 75 per
cent instantaneous penetration of wind and solar. If the recommended
actions are not taken, the this reduces to between 50 and 60 per cent.8
Beyond 2025, AEMO did not identified ‘any insurmountable reasons’
why even higher levels of instantaneous wind and solar penetration
could be achieved, given global technological development, and suffi­
ciently flexible market and regulatory frameworks capable of adapting
to these developments (AEMO, 2020).
The Clean Energy Council notes that, for the first time in several
years, despite imposition much stricter reliability standards, the AEMO
did not forecast any supply shortfalls for the 2020/21 summer. This was
due largely to addition of over 5 GW of new renewable energy genera­
tion in recent years. It notes that according to the Australian Energy
Market Commission (AEMC), projected annual price falls in residential
electricity bills of 8.7 per cent between 2020 and 2023 will be largely
due to lower wholesale prices resulting from significant new renewable
energy generation capacity (Clean Energy Council, 2021). Thus it can be
seen that additional renewable generation capacity is supporting both
enhanced grid stability and lower electricity prices.
The level of cost competitiveness and technical viability of renew­
able energy is reflected in its share of low-carbon investment, particu­
larly when compared to CCS. Global investment in renewable energy
totalled $366 billion. CCS was the only sector not to rise, with a slight
decline to $2.3 billion, approximately 0.03 per cent of the investment in
renewables (Bloomberg New Energy Finance, 2021). These costs and
viability advantages underly the economic case for directing financial
support towards renewable energy-based electrification as a means to
decarbonise the economy, as opposed to reliance on continuing fossil
fuel development combined with CCS.
It is also the basis for prioritising support for hydrogen produced
from renewably generated electricity. Finkel argues that renewable
energy and hydrogen production can mitigate the over 80 per cent of
Australian emissions that are produced by combustion of fossil fuels for
electricity generation (34 per cent), stationary energy (20 per cent), and
transport (18 per cent). For fugitive emissions, mostly methane from
fossil fuel extraction and processing, he recommends CCS, until fossil
fuels can be phased out (Finkel, 2020).
Both Finkel and Garnaut see a limited role for gas firming as battery
costs fall, but not as a replacement generation for coal (Finkel, 2021;
Garnaut, 2019). This is now effectively the policy in New South Wales,
where gas currently accounts for only two per cent of annual electricity
output. Finkel concludes that the price of hydrogen production from
renewable energy has reduced to within a factor of 3 or 4 of that of fossil
fuels. This cost differential can be partly offset by selling electricity
7
The central scenario implies that current 2030 Paris Nationally Determined
Commitments are met but that the planned ramping up of ambition to prevent a
greater than 2◦ increase in temperature does not occur. The High VRE scenario
there is a strong climate policy consistent with maintaining temperature in­
creases of 1.5◦ and achieving net zero emissions by 2050 worldwide. CSIRO, 20.
8
See Table◦ 1 Managing power system requirements – summary of key
challenges and actions, 8; Figure◦ 2◦ – timeline of actions 2020–2025, 12–13;
Figure◦ 3 ‘Summary of identified system limits and remedial actions, overlaid on
instantaneous penetration of wind and solar generation, actual in 2019 and
forecast for 2025 under ISP Central and Step Change generation builds’, 14.
Numerous other AEMO studies and reports relate to differing aspects of these
technical issues.
S. Geroe
(from renewables plants used to produce hydrogen) on wholesale mar­
kets in peak periods, at prices higher than cost of production of
hydrogen. Finkel chaired the steering committee for the National
Hydrogen Strategy (NHS), which aims to make Australia a top three
supplier to Asia by 2030 (Australian Government Department of In­
dustry, Science, Energy and Resources, 2019).
Garnaut identifies the potential for superabundant, low-cost renew­
able electricity in Australia as the main factor for potential Australian
competitiveness in the emerging global hydrogen industry. He (and
others) see emerging competitive advantage for Australia in energy
intensive industries such as aluminium and steel production as fossil
fuels are phased out globally (Garnaut, 2019; Wood, 2020; Reputex,
2015). This will make the processing of Australian raw materials such
iron ore, bauxite and rare earth minerals in Australia cost-effective
(Garnaut, 2019, 2020). Building mass-scale renewables is also central
to the Beyond Zero Emissions plan, as the enabler of energy intensive
manufacturing, zero emissions aluminium and steel and electricity ex­
ports to Asia. It notes that countries including Germany, Japan and
South Korea also see renewable hydrogen as a central component of
their plans to decarbonise (Beyond Zero Emissions, 2020; Garnaut,
2019). Indeed, these countries are all implementing long-term hydrogen
strategies (Japanese Ministry of Economy, Trade and Industry, 2017;
Kan, 2020; Huber, 2021), but may lack sufficient renewable resources to
meet domestic hydrogen demand.
Renewable hydrogen production is being driven by private sector
and state level initiatives. The 26 GW Asian Renewable Energy Hub in
North-West Australia, in the early stages of development, is designed to
produce renewable electricity at a scale large enough to drive down
hydrogen productions costs (Asian Renewable Energy Hub, 2021). A
planned hydrogen technology manufacturing facility in Queensland
aims to substantially increase global manufacturing capacity (Hoster,
2021). A 10 GW project in the Northern Territory aims to supply power
to Singapore through HVDC cabling (Morton, 2020). In 2020 the NSW
Government’s Electricity Infrastructure Roadmap committed $A32
billion by 2030 for new electricity infrastructure. This included 12 GW
new wind and solar capacity and 2 GW storage capacity, largely planned
for three regional renewable energy hubs. (New South Wales Govern­
ment, 2021). Tasmania (with abundant hydro and wind resources) aims
to be a net renewable energy exporter to the mainland. The Australian
Capital Territory has already achieved net 100 percent renewable
electricity (through power purchases from interstate), and South
Australia has achieved over 50 percent renewable generation.
Longden et al. note that: ‘A key premise of Australia’s Technology
Roadmap that is under development is that “driving down the cost of
deploying low emissions technologies to a point where they are
competitive with existing alternatives will deliver meaningful re­
ductions in global emissions” (Longden et al., 2020). To date, the scale of
financing required to achieve cost competitiveness for CCS has proved
unmanageable for globally dominant corporations in the fossil fuel and
resources industry. These costs cannot be reduced by Australia alone.
Conversely, Australia can take advantage of existing cost declines of
renewables, and Australian solar and wind resource endowment, to
secure competitive advantage in low-emissions hydrogen. Accordingly,
a more focused Roadmap is recommended, with greater ambition for
hydrogen produced with renewably generated electricity.
5. Conclusion and policy implications
Australia’s experience of the CPM, consistently that of the UK CPF
and countries analysed by Burke, Jotzo and Best, suggests that the best
policy to facilitate low-carbon transition towards net zero by 2050
would be imposing a price on carbon. While policies supporting early-
stage technology have been broadly adopted, for example by the EU
and the US, they are widely considered to operate most effectively as a
complementary policy to a carbon price. In jurisdictions where a carbon
price has proved untenable, state financial support and regulation have
7
Energy Policy 165 (2022) 112945
been recognised as the main alternative measures to implement low-
carbon transition (Garnaut, 2019).
The Australian government’s emphasis on leveraging private in­
vestment (co-investment) is a useful way to limit financial risks of failed
projects to the taxpayer. Co-investment reduces risks of crowding out
private investment, and provides an important role for private sector
actors in investment decisions and management. It can also ameliorate
regulatory risks for investors, in the event that political pressures or
budgetary constraints impact on unlegislated funding commitments.
Contractual agreements between the Clean Energy Regulator and proj­
ect proponents and for ERF and CSF projects can also mitigate regulatory
risks for emerging technology investments.
In some jurisdictions, detailed sectoral plans backed by interim tar­
gets for reducing emissions across all economic sectors have been set in
legislation. For example, Germany’s low-emissions technology policy is
calibrated to achieving its 2050 net zero GHG emissions target, in line
with that of the EU. An interim target for 2030 of at least a 55 percent
reduction in GHG emissions compared to 1990 includes sectoral targets
for energy, industry, buildings, transport and agriculture, and is
legislated in the Federal Climate Change Act 2019. These targets are
supported by sectoral strategies and Climate Change Action Plans
updated every five years on the basis of monitoring and evaluation of
progress (German Federal Ministry for the Environment, Nature, Con­
servation and Nuclear Safety, 2016). Germany’s sectoral plans augment
the emissions impact of its participation in the EU ETS.
In the absence of a carbon price, this paper recommends that the
Technology Investment Roadmap, the Long-term Emissions Plan and the
complementary policy it refers to be developed into such detailed sec­
toral plans, backed by regularly updated interim targets set in legisla­
tion. Currently, these policies are based on principles prioritising
voluntary action by business and consumer choice (Australian Govern­
ment Department of Industry, Science, Energy and Resources, 2021 a),
through creating financial incentives as opposed to imposing costs. To
be effective financial support must be applied on objective criteria to
rival low-emissions technologies, avoiding state expenditure on CCS on
a scale that risks distorting the objectives of the plan (Wood, 2012). On
this basis, the Roadmap and Long-term Emissions Plan can be a viable
model for scale-up of low-carbon technologies.
In the absence of a price on carbon, and direct regulatory pressure on
fossil fuel polluters, it is less clear that financial support for early-stage
technology offers a viable path to reducing Australia’s flatlining emis­
sions trend (Climate Tracker, 2021).9 In recent years many of the
emissions mitigation gains of renewable energy scale-up have been
offset by rising emissions from the LNG industry. Emissions from
transport, industry and agriculture remain stubbornly high. According
to an EY report produced for the Australian Petroleum Production and
Export Association (APPEA), on a high growth scenario, the investment
pipeline from 2021 to 2029 is valued at over $A300 billion (Ernst and
Young, 2020). Particularly given uncertainties over climate impacts of
methane emissions from unconventional gas operations (Friedlander,
2019), the Australian government’s commitment to a gas led Covid 19
recovery may be difficult to reconcile with a 2050 net zero emissions
target. While some major gas companies do have 2050 zero emissions
9
Climate Tracker is a collaboration of non-profit groups and the Potsdam
Institute for Climate Impact Research https://climateactiontracker.org/about
/the-consortiumAustralia’s compliance with international emissions commit­
ment has been supported by Land Use, Land Use Change and Forestry projects,
as depicted in Climate Action Tracker link for Australia in the reference list).
For Australian emissions data see links on https://www.industry.gov.au/dat
a-and-publications/national-greenhouse-gas-inventory-quarterly-update-dece
mber-2020.
S. Geroe
plans, they rely on future plans for CCS and offset projects, as well as
lower emissions fuels and operation.10 Although some of these net zero
plans aim to limit scope 3 emissions, how this can be achieved and
monitored is unclear (Hay, 2020). Where interim targets are not
included, the risk arises that GHG emissions will not be substantially
reduced during the current project pipeline over the next twenty years,
by which time gas will have been more fully supplanted by non-fossil
fuel energy. This is particularly concerning given the slow scale-up of
CCS compared to wind and solar energy.
At a national level, the absence of a 2030 interim target, combined
with projected fossil fuel exports to mid-century under the Long-term
Emissions Reduction Plan, poses similar risks. In effect it necessitates
substantial reliance on CCS and/or offsets to achieve net zero targets. In
this way, the Technology Investment Roadmap and Long-term Plan for
Emissions resemble net zero plans of fossil fuel companies. This suggests
that two divergent models of net zero transition have emerged in
Australia. One involves continuing development of the fossil fuel in­
dustry, necessitating reliance on CCS at a very substantial scale, or on
offsets and emissions reductions in other sectors. The alternative model
is based on renewable energy and its use to produce hydrogen to replace
around 80 per cent of fossil fuel use. In this model, CCS has a residual
role in sequestering industrial emissions that cannot otherwise be
avoided.
Current indications are that Australia will continue to rapidly
develop both renewable energy and the fossil fuels industry, particularly
unconventional gas. An Australia Institute Study found that in
2020–2021 Australian fossil fuel subsidies totalled over $A10 billion
(Campbell et al., 2021). Among other factors, this is reflected in the fact
that only the Gulf States and Brunei have higher per capita emissions
than Australia, although the US and Canada are at a similar level (World
Bank, 2018). Under current policy settings, the prospects for scaling-up
low emissions technology look considerably better than those for
achieving net zero emissions by 2050. The most viable way to improve
this would be to scale-up renewable energy, including for production of
hydrogen under the Technology Investment Roadmap – consistently
with existing state level plans and major private sector projects. This
could eliminate over 80 per cent of emissions arising from fossil fuel
combustion, facilitating development of low emissions steel, aluminium,
resource processing, manufacturing, buildings, transport, and clean
energy exports.
CRediT authorship contribution statement
Steven Geroe: Conceptualization, Investigation, Methodology,
Writing – original draft, Writing – review & editing.
Declaration of competing interest
The authors declare that they have no known competing financial
interests or personal relationships that could have appeared to influence
the work reported in this paper.
References
Ares, Elena, 2021. The UK ETS. UK house of commons briefing paper number 9212, 4
May 2021, 1. https://researchbriefings.files.parliament.uk/documents/CBP-9212/
CBP-9212.pdf.
Asian Renewable Energy Hub. 26,000 MW of wind and solar generation. https://asianr
ehub.com/.
Australian Department of Industry, Science, Energy and Resources, 2020. Technology
Investment Road Map: First Low-Emissions Technology Statement. https://www.
industry.gov.au/data-and-publications/technology-investment-roadmap-first-low-e
10
See for example Santos, Climate Change Report 2021′ , Report Highlights, 1.
https://www.santos.com/wp-content/uploads/2021/02/2021-Climate-Change
-Report.pdf.
8
Energy Policy 165 (2022) 112945
missions-technology-statement-2020/australias-priority-low-emissions-technolo
gies/priority-low-emissions-technologies-and-economic-stretch-goals.
Australian Energy Market Operator, 2020. AEMO’s Twenty Year Development Plan for
the National Electricity Market. https://aemo.com.au/-/media/files/major-publicat
ions/isp/2020/final-2020-integrated-system-plan.pdf?la=en.
Australian Government Department of Industry, Science, Energy and Resources, 2015.
National Energy Productivity Plan. https://www.energy.gov.au/government-priori
ties/energy-ministers/energy-ministers-publications/national-energy-productivity-
plan-2015-2030.
Australian Government Department of Industry, Science, Energy and Resources, 2019.
Australia’s National Hydrogen Strategy. https://www.industry.gov.au/data-and-p
ublications/australias-national-hydrogen-strategy.
Australian Government Department of Industry, Science, Energy and Resources, 2021.
National Energy Productivity Plan’. https://www.energy.gov.au/government-pri
orities/australias-energy-strategies-and-frameworks/national-energy-productivity-
plan.
Australian Government Department of Industry, Science, Energy and Resources, 2021a.
Australia’s long-term emissions reduction plan: a whole-of-economy plan to achieve
net zero emissions by 2050, 16 november 2021, box 1.2, 27. ‘Australia’s Principles –
Technology Not Taxes’. https://www.industry.gov.au/sites/default/files/October%
202021/document/australias-long-term-emissions-reduction-plan.pdf.
Australian Government Department of Industry, Science, Energy and Resources, 2021b.
Australia’s Long-Term Emissions Reduction Plan. https://www.industry.gov.au/da
ta-and-publications/australias-long-term-emissions-reduction-plan.
Australian Government Department of Industry, Science, Energy and Resources, 2021.
Solar PV and Batteries. https://www.energy.gov.au/households/solar-pv-and-
batteries.
Australian Renewable Energy Agency. Future fuels fund. https://arena.gov.au/funding/
future-fuels-fund/.
Barbose, G., et al., 2021. US Renewable Portfolio Standards 2021 Status Update: Early
Release. Lawrence Berkeley National Energy Laboratory report. February 2021. htt
ps://eta.lbl.gov/publications/us-renewables-portfolio-standards-3.
Belot, H., 2021. Government Commits to Expanding Electric Vehicle Charging Stations
but No Subsidies to Increase Uptake. ABC News 8 November 2021. https://www.abc
.net.au/news/2021-11-08/electric-vehicle-charging-stations-no-subsidies-govern
ment-plan/100604122.
Best, R., Burke, P.J., Jotzo, F., 2020. Carbon pricing efficacy: cross-country evidence.
Environ. Resour. Econ. 77 (1), 69–94. https://doi.org/10.1007/s10640-020-00436-
x.
Beyond Zero Emissions, 2020. The Million Jobs Plan: A Unique Opportunity to
Demonstrate the Growth and Employment Potential of Investing in a Low-Carbon
Economy. https://bze.org.au/wp-content/uploads/2020/11/BZE-The-Million-Jo
bs-Plan-Full-Report-2020.pdf.
Bhattacharya, M, Inkekwe, J and Sadorsky, P, 2020. Convergence of Energy Productivity
in Australian States and Territories: Determinants and Forecasts 85 Energy
Economics vol. 2.
Bloomberg New Energy Finance, 2022. Energy Transition Investment Trends 2022:
tracking global investment in the low-carbon energy transition. https://assets.bbh
ub.io/professional/sites/24/Energy-Transition-Investment-Trends-Exec-Summary-2
022.pdf.
Campbell, R., Littleton, E., Armistead, A., 2021. Fossil Fuel Subsidies in Australia:
Federal and State Government Assistance to Fossil Fuel Producers and Major Users
2020-21. Australia Institute report. April 2021. https://australiainstitute.org.au/w
p-content/uploads/2021/04/P1021-Fossil-fuel-subsidies-2020-21-Web.pdf.
Carbon Market Institute, 2021. Time for Carbon Market to Scale-Up as Corporates
Commit to Net-Zero. Media release, 20 September 2021. https://carbonmarketinsti
tute.org/2021/09/10/time-for-carbon-farming-to-scale-up-as-corporates-commit-to-
net-zero-emissions/.
Carbon Tax Centre, 2021. Where carbon is taxed? https://www.carbontax.org/where-
carbon-is-taxed/.
Centre for Climate and Energy Solutions, 2021. Market Based Strategies. https://www.
c2es.org/content/market-based-strategies/.
Clean Energy Council, 2020a. Clean Energy Australia Report 2020’. (The CEC is the peak
industry body in the renewable energy industry in Australia). https://assets.cleanene
rgycouncil.org.au/documents/resources/reports/clean-energy-australia/clean-ene
rgy-australia-report-2020.pdf.
Clean Energy Council, 2020b. A Clean Recovery, Clean Energy Council Report. May
2020b. https://www.cleanenergycouncil.org.au/advocacy-initiatives/a-clean-recov
ery.
Clean Energy Financing Corporation, 2021. CEFC Statement on Proposed Low-Emissions
Technology Commercialisation Fund. https://www.cefc.com.au/media/statement
/cefc-statement-on-proposed-low-emissions-technology-commercialisation-fund/.
Clean Energy Financing Corporation b home page https://www.cefc.com.au/.
Clean Energy Regulator, 2021. ERF Auction April. http://www.cleanenergyregulator.
gov.au/ERF/auctions-results/april-2021.
Clean Energy Regulator, 2018. Large-scale renewable energy target. http://www.cleane
nergyregulator.gov.au/RET/About-the-Renewable-Energy-Target/How-the-scheme-
works/Large-scale-Renewable-Energy-Target.
Climate Action Tracker: Australia https://climateactiontracker.org/countries/australia/.
de Atholia, Timoth, Flannigan, Gordon, Lai, Sharon, 2020. Renewable energy investment
in Australia. Australian Reserve Bank report. https://www.rba.gov.au/publications/
bulletin/2020/mar/pdf/renewable-energy-investment-in-australia.pdf.
Energy Security Board, 2021. Post 2025 Electricity Market Design. https://esb-post20
25-market-design.aemc.gov.au/.
S. Geroe
European Commission, 2020. The European Green Deal Investment Plan and Just
Transition Mechanism Explained. https://ec.europa.eu/commission/presscorner/de
tail/en/qanda_20_24.
EY (Ernst & Young) report for APPEA (Australian Petroleum Production & Exploration
Association), 2020. Australia’s Oil and Gas Industry: Kickstarting Recovery from
COVID-19. https://www.appea.com.au/wp-content/uploads/2020/11/EY-Report-
Australias-oil-and-gas-industry-Kickstarting-recovery-from-COVID-19.pdf.
Fay, M., Hallegatte, S., Vogt-Schilb, A., Rozenberg, J., Narloch, U., Kerr, 2015.
Decarbonizing development: three steps to a zero-carbon future. World Bank report.
https://openknowledge.worldbank.org/handle/10986/21842.
Finkel, A., 2021. Getting to zero: Australia’s energy transition. Q. Essay 81, 2021. https
://www.quarterlyessay.com.au/author/alan-finkel.
Friedlander, B., 2019. Study: Fracking Prompts Global Spike in Atmospheric Methane.
https://news.cornell.edu/stories/2019/08/study-fracking-prompts-global-spike-at
mospheric-methane.
Garnaut, R., 2019. Superpower: Australia’s Low-Carbon Opportunity. Black Ink Press.
Garnaut, R., 2021. Reset: Restoring Australia after the Pandemic Recession. La Trobe
University Press.
German Federal Ministry for the Environment, Nature, Conservation and Nuclear Safety,
2016. Climate Action Plan 2050 – Germany’s Long-Term Low Greenhouse Gas
Emission Development Strategy. https://www.bmu.de/en/topics/climate-adaptatio
n/climate-protection/national-climate-policy/climate-action-plan-2050-germanys-
long-term-low-greenhouse-gas-emission-development-strategy.
Graham, Paul, Hayward, Jenny, Foster, James, Havas, Lisa, 2020. CSIRO GenCost 2020-
21’ (CSIRO Report December 2020) file:///C:/Users/sgeroe/AppData/Local/Temp/
GenCost2020-21_FinalReport.pdf.
Grattan, M., 2021. Morrison to Link 500 Million for New Technologies to Easing Way for
Carbon Capture and Storage. The Conversation Web Site, 9 November 2021. htt
ps://theconversation.com/morrison-to-link-500-million-for-new-technologies-to-ea
sing-way-for-carbon-capture-and-storage-171528.
Gul, et al., 2020. Energy Technology Perspectives 2020: Special Report on Carbon
Capture, Utilisation and Storage’, vol. 28. International Energy Agency report 2020.
https://www.iea.org/reports/energy-technology-perspectives-2020.
Harvey, F., Rankin, J., 2020. What Is the European Green Deal and Will it Really Cost
€1tn? the Guardian, vol. 9. March 2020. https://www.theguardian.com/world/20
20/mar/09/what-is-the-european-green-deal-and-will-it-really-cost-1tn.
Hay, O., 2020. Australia’s top emitters told to draw net zero road map. Australian
Financial Review 14 September 2020. https://www.afr.com/policy/energy-and-
climate/australia-s-top-emitters-told-to-draw-net-zero-road-map-20200914-p55vap.
Higgins, I., 2021. Australia Refuses to Join Global Pledge Led by US and EU to Cut
Methane Emissions, 3 November 2021. https://www.abc.net.au/news/2021-11-03/
australia-refuses-to-join-global-pledge-to-cut-methane-emissions/100589510.
Hoster, P., 2021. New $1 Billion-Plus Project in Queensland to Double World’s Green
Hydrogen Production Capacity, vol. 10. October 2021. https://www.abc.net.au/ne
ws/2021-10-10/qld-palaszczuk-andrew-forrest-hydrogen-gladstone/100527670.
Huber, Isabelle, Germany’s Industrial Hydrogen Strategy, 2021. Commentary for Centre
for Strategic and International Studies. https://www.csis.org/analysis/germanys-h
ydrogen-industrial-strategy.
InfluenceMap, 2020. Australian Industry Associations and Their Carbon Footprint.
InfluenceMap report, 2020. https://influencemap.org/report/Australian-Industry-
Groups-And-their-Carbon-Policy-Footprint-c0f1578c92f9c6782614da1b5a5ce94f.
International Renewable Energy Agency, 2021. Renewable Power Generation Costs in
2020. https://www.irena.org/publications/2021/Jun/Renewable-Power-Costs-in-
2020.
Jaber, et al., 2021. Net Zero by 2050: A Roadmap for the Global Energy Sector. IEA
report updated July 2021. https://www.iea.org/reports/net-zero-by-2050.
Jaffe, A., Newell, R.G., Stavins, R.N., 2005. A tale of two market failures: technology and
environmental policy. Ecol. Econ. 54 (2), 164–174. https://www.researchgate.net/
publication/222669058_A_Tale_of_Two_Market_Failures_Technology_and_Environme
ntal_Policy.
Japanese Ministry of Economy, 2017. Trade and Industry, Basic Hydrogen Strategy (Key
Points). https://www.meti.go.jp/english/press/2017/pdf/1226_003a.pdf.
Jotzo, F., O’Gorman, M., 2014. Impact of the Carbon Price on Australia’s Electricity
Supply, Demand, and Emissions. Australian National University Centre for Climate
Economics and Policy Working Paper 1411. https://ccep.crawford.anu.edu.au/pub
lication/ccep-working-paper/4388/impact-carbon-price-australias-electricity-dema
nd-supply-and.
Kan, Sichao, 2020. South Korea’s Hydrogen Strategy and Industrial Perspectives. https://
www.ifri.org/en/publications/editoriaux-de-lifri/edito-energie/south-koreas-hydr
ogen-strategy-and-industrial.
Energy Policy 165 (2022) 112945
Leadership in Energy and Environmental Design LEED https://www.certifiedenergy.co
m.au/leed.
Longden, T Jotzo, F Prasad, M., Andrews, R., 2020. Green Hydrogen Production Costs in
Australia: Implications of Renewable Energy and Electrolyser Costs for Zero-Carbon
Energy for the Asia-Pacific. Zero-Carbon Energy for the Asia-Pacific Working Paper
ZCWP03-20, CCEP Working Paper 20-07. Crawford School of Public Policy,
Australian National University. http://iceds.anu.edu.au/files/2020%2009%2001%
20-%20ZCEAP%20-%20CCEP%20Working%20Paper%20-%20Green%20hydrogen
%20production%20costs.pdf.
Ludlow, M., 2020. Emissions Reduction Fund should push for $2b co-investment.
Australian Financial Review, 19 May 2020. https://www.afr.com/companies/ene
rgy/emissions-reduction-fund-should-push-for-2b-co-investment-20200518-p54u2u.
Mazengarb, M., 2020. Australia’s Mining Giants Still Tied to Lobby Groups Blocking
Climate Action’, RenewEconomy Web Site, vol. 23. September 2020. https://ren
eweconomy.com.au/australias-mining-giants-still-tied-to-lobby-groups-blocking-cli
mate-action-40125/.
Morton, M., 2020. Green Giants: the Massive Projects that Could Make Australia a Clean
Energy Superpower, vol. 4. The Guardian. November 2020. https://www.thegu
ardian.com/environment/2020/nov/14/green-giants-the-massive-projects-that-cou
ld-make-australia-a-clean-energy-superpower#:~:text=The%20future%20site%20
of%20the,of%20Australia’s%20overall%20electricity%20generation.%E2%80%9D.
Morton, A., 2021. Australian Government Refuses to Join 40 Nations Phasing Out Coal,
Saying it Won’t ‘Wipe Out Industries’, the Guardian, 5 November 2021. https://
www.theguardian.com/environment/2021/nov/05/australia-refuses-to-join-
40-nations-phasing-out-coal-as-angus-taylor-says-coalition-wont-wipe-out-industri
es.
Mountain, B., 2020. Reality check: why CCS has No role in Australia’s energy system: a
review of the evidence: costs of carbon capture and storage applied to electricity
generation in Australia. In: Report for Victoria Energy Policy Centre. Victoria
University. https://www.positiveenergy.gov.au/carbon-capture-use-storage?
gclid=Cj0KCQjwrJOMBhCZARIsAGEd4VEWzxKRa-9y-20Y6GP_C-W8sqf5nbkHkSU-j
KFr1rofnEVs-jMwNRYaAkq0EALw_wcB&gclsrc=aw.ds.
Murphy, Katherine, 2021. Anthony Albanese Commits Labor to Emissions Reduction
Target of 43% by 2030. The Guardian, 3 December 2021. https://www.theguardian.
com/australia-news/2021/dec/03/anthony-albanese-commits-labor-to-emissio
ns-reduction-target-of-43-by-2030.
National Australian Built Environment Rating System NABERS. https://www.nabers.gov.
au/about/what-nabers.
New South Wales Government, 2021. Electricity Infrastructure Roadmap. https://www.
energy.nsw.gov.au/government-and-regulation/electricity-infrastructure-roadmap.
Organisation for Economic Cooperation and Development, 2016. Effective Carbon Rates:
Pricing CO2 through Taxes and Emissions Trading Schemes: Executive Summary,
Why Carbon Prices Are Effective. https://read.oecd-ilibrary.
org/taxation/effective-carbon-rates_9789264260115-en#page9.
Reputex Energy Market Analysis, 2015. Energy efficiency to drive emissions cuts, shape
ERF (Reputex Energy is a private sector provider of modelling and forecasting
services for Australian renewable energy, electricity and carbon markets. https
://www.reputex.com/research-insights/market-briefing-energy-efficiency-to-drive
-emissions-cuts-shape-erf/.
United Kingdom Department for Business, Energy and Industrial Strategy, 2017. 2016
UK Greenhouse Gas Emissions, Provisional Figures. March 2016. https://www.gov.
uk/government/uploads/system/uploads/attachment_data/file/604408/20
16_Provisional_Emissions_statistics.pdf.
Vaughan, Adam, 2017. UK wind power overtakes coal for first time. The Guardian 6
January 2017. https://www.theguardian.com/business/2017/jan/06/uk-wind-p
ower-coal-green-groups-carbon-taxes.
Webb, Jeremy, de Silva, H. Nadeeka, Wilson, Clevo, 2020. The future of coal and
renewable power generation in Australia: a review of market trends. Econ. Anal. Pol.
363–378.
Wood, T., 2012. Building the Bridge: A Practical Plan for a Low-Cost, Low-Emissions
Energy Future. Grattan Institute report. https://grattan.edu.au/wp-content/uploads
/2014/04/Building_the_bridge_report.pdf.
Wood, T., Dundas, G., Ha, J., 2020. Start with Steel: A Practical Plan to Support Carbon
Workers and Cut Emissions. Grattan Institute Report. https://grattan.edu.au/report/
start-with-steel/.
World Bank. CO2 emissions (metric tons per capita). https://data.worldbank.org/indicat
or/EN.ATM.CO2E.PC?locations=AU.
World Bank, 2021. Pricing Carbon. https://www.worldbank.org/en/programs/prici
ng-carbon#CarbonPricingViews.