Submission: Climate Change Authority – Targets, Pathways and Progress consultation

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14 May 2024

To: Climate Change Authority
RE: Targets, Pathways and Progress consultation

Thank you for the opportunity for the Institute for Energy Economics and Financial Analysis (IEEFA) to provide input on the Targets, pathways and progress discussion paper. IEEFA is an energy finance think tank that examines issues related to energy markets, trends and policies. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy.

In IEEFA’s view:

• It will be critical for the Authority to comprehensively assess all opportunities to reduce emissions in Australia, and appropriately estimate their net economic cost/benefit beyond energy considerations. Our research finds that many opportunities are underestimated in government planning, and so are the relative economic benefits of renewable-based solutions compared with fossil-based solutions.
• Distributed energy resources, energy efficiency and electrification present particularly large untapped opportunities. They could support the renewable electricity transition, eradicate the looming excess gas demand in Australia’s southern states and reduce energy costs for consumers.
• The Authority should pay close attention to the net economic cost/benefit of new and expanded fossil fuel projects (extraction, transport, use). Our research suggests that many proposed projects would not deliver financial returns based on increasing costs and decreasing revenue, and present significant environmental and economic risks for Australia.
• Assumptions regarding the methane emissions from coal-mining and gas extraction and transport, and the potential for carbon capture and storage and carbon credits to reduce emissions should be based on most recent evidence to reduce risks of inadequate emissions reduction plans.
• Government needs to establish the right conditions for a shift in investments. This will require targeted interventions and policies, as well as broader changes such as a review of energy market governance and network revenue regulation.

Amandine Denis-Ryan, Chief Executive, IEEFA Australia
Johanna Bowyer, Lead Analyst – Australian Electricity
Jay Gordon, Energy Finance Analyst, Australian Electricity
Joshua Runciman, Lead Analyst, Australian Gas
Anne-Louise Knight, Lead Analyst, Australian Coal

Read the full submission here