Grattan Institute

Towards net zero: practical policies to offset carbon emissions

Governments around the world are moving to ‘net zero’, to limit the impacts of climate change. All Australian state and territory governments have the goal of reaching net-zero carbon emissions by 2050 at the latest, and the Prime Minister says the national target is net zero, preferably by 2050.

Australian governments can and should act now to create momentum towards the net zero goal. Strong policies are required to reach net zero, but some sectors and individuals may be able to do more than others at different times. By offsetting over-achievement in one sector against under-achievement in another, effort can be shared across the economy and the goal achieved at lower cost.

This report, the fourth in a series of five on net zero, recommends policies to ensure Australia has access to high-quality offsetting units, both to act as a ‘safety valve’ if the cost of reducing emissions sector-by-sector is higher than anticipated, and for the ongoing task of offsetting emissions that can’t be avoided.

Offsetting is a difficult part of the net-zero conversation. Some see it as an excuse to delay reductions, others as bringing about unacceptable social change, particularly in rural areas. It has been plagued by integrity problems, and there is understandable cynicism about its potential.

Key recommendations:

  • Implement strong policies to reduce emissions consistent with a net-zero pathway
  • Articulate the role of offsetting in each policy
  • Bolster the integrity of offsetting units
  • Get ready for an expanded international market in offsetting units
  • Support the emergence of negative emissions technologies

Read the full Towards net zero: practical policies to offset carbon emissions report.

Business Council of Australia

Achieving a net zero economy

The Business Council of Australia (BCA) supports achieving a net zero emissions economy by 2050. This paper sets out a proposed transition pathway and a set of policy recommendations to enhance coordination across governments, regulators, industry and the community to deliver economic dividends for all Australians.

This paper has been informed by Australia’s leading businesses and presents a business perspective on the most efficient and least costly pathway to achieving this goal.

The BCA believes the level of ambition and policy architecture recommended in this paper is durable and capable of attracting support from the majority of the parliament. A coordinated pathway to net zero will create new industries, new jobs and ensure Australia remains competitive on the world stage.

The transition will be underpinned by technology change and innovation, with the early years focussed on bringing forward action in easier to abate industries while incentivising investment to close the technology gap in harder to abate sectors.

It must run in tandem with the nation realising greater economy-wide productivity gains, lifting international competitiveness and improving the ability to attract investment in order to accelerate economic growth and secure Australia’s long-term prosperity. Decarbonisation is central to Australia’s economic transformation and meeting the challenges of a rapidly changing world.

Read the full Achieving a net zero economy report.