Report of the expert panel examining additional sources of low cost abatement

Abstract

The Panel was tasked with providing advice to the Minister for Energy and Emissions Reduction on how to incentivise low cost abatement opportunities from across the economy, with a focus on the industrial, manufacturing, transport and agriculture sectors, and energy efficiency. Targeted consultation was undertaken with these sectors and submissions were received from across industry, research organisations and non-government organisations. The recommendations outlined in this report are intended to help Australia exceed its current international commitments and create a pathway for ongoing emissions reductions beyond 2030 to meet future commitments under the Paris Agreement. The Emissions Reduction Fund (ERF) and Safeguard Mechanism, built on Australia’s globally recognised emissions measurement and reporting systems, provide a platform that can readily accommodate and incentivise further action. The Panel identified opportunities to unlock additional abatement by refining these schemes and introducing new complementary programs. In preparing its recommendations, the Panel had regard to the broader trends framing Australia’s emissions reduction task. The Panel have articulated seven principles that have guided it in forming its conclusions: 1. Projects that reduce the stock of greenhouse gases in the atmosphere should be considered for an incentive if the actual or potential carbon benefit exceeds the incentive cost. 2. Policy should be designed to favour economically productive activities or activities where there are co-benefits. 3. Policies and institutions should be technology-neutral and complementary. 4. Participation will be encouraged if solutions are conceptually and administratively simple, with an emphasis on balanced sharing of risk and minimising transaction costs. 5. Technologies are at different stages of technical and commercial readiness, and incentives/ instruments should be designed to reflect this. 6. Policies should be designed and administered in a participatory and transparent manner. 7. Policy responses should be coordinated between federal, state and territory governments and undertaken in collaboration, where possible, with state and territory governments This report presents the Panel’s findings and recommendations, which are divided into three themes:  improving the Emissions Reduction Fund (Part A);  incentivising voluntary action on a broader scale (Part B); and  unlocking the technologies needed to decarbonise the economy (Part C). The Panel’s recommendations are set out below. Further detail on each of these recommendations is provided in the report. Show more