For the first time, the opportunities across the Australian economy to reduce greenhouse gas emissions have been modelled to form a view of the size of different opportunities and to understand the role these measures can play in meeting Australia's 2030 climate target.
As the emissions reduction opportunities were analysed, Energetics then assigned each to the most appropriate government policy or program. As outlined in our 2016 Abatement Information Centre, this is a 'bottom-up' analysis of the abatement task. We did not model an emissions trading scheme nor the Direct Action policy as we did not assume how any policy may change over time. We expect further clarification in the 2017 review of Direct Action.
What did we learn through our analysis?
The largest abatement opportunities lie in the following areas:
Energy productivity (44%): measures include projects to improve energy efficiency as well as vehicle and fuel efficiency. By ensuring the return from even dollar spent on energy is maximised, not only are emissions reduced, an array of business productivity improvements also result. Noting too, measures to improve vehicle fuel efficiency also deliver a strong economic benefit as the net cost to Australia of imported transport fuels is high.
Land-use changes and agricultural measures (38%): the experience of the ERF auctions suggests that the scheme is effective at encouraging low emissions farming practices and land use changes.
Renewable energy (residential, commercial and remote area) and management of industrial processes can each contribute a further 5% of emissions reductions.
More than 70 abatement opportunities were assessed within these groupings. The opportunities can be found across all Australian sectors and all economic segments.