Home

Strong emission cuts better for economy

Georgie MooreAAP
Australia's energy market operator has modelled five scenarios about how the energy future may look.
Camera IconAustralia's energy market operator has modelled five scenarios about how the energy future may look. Credit: AAP

Going harder and faster on emission reduction beyond net zero by 2050 would make Australia economically stronger, new modelling shows.

Australia has not committed to reaching net zero emissions by 2050, but says it is a preference to get there by then.

The Australian Energy Market Operator modelled five scenarios about how the country's energy future could look.

It found two ways to achieve deeper emissions cuts and stronger economic outcomes compared with a net zero by 2050 policy.

Get in front of tomorrow's news for FREE

Journalism for the curious Australian across politics, business, culture and opinion.

READ NOW

Under the latter scenario, the focus would be on the development of low-emissions technologies helped by state government-supported renewable energy zones to move away from high-polluting power.

The shift would take off in the 2030s, with nearly half of Australia's homes currently heated by gas being electrified by the middle of that decade, and into the 2040s.

Economy-wide decarbonisation would occur as the 2050 deadline approached.

This approach was consistent with global warming of about 2.6C by the end of the century.

The Paris Agreement, which Australia signed up to, aims to avoid dangerous climate change by limiting global warming to well below 2C.

AEMO found a more aggressive approach would lead to stronger economic outcomes.

One scenario, dubbed "step change", involved a rapid, coordinated and an economy-wide move towards renewables.

Net zero would be achieved on or before 2050 under this model, which was consistent with keeping global warming to under 2C.

Renewable energy would become more affordable more quickly.

Much of the transport sector would be electrified, with electric vehicles taking over from traditional cars.

Sectors such as manufacturing would lean on domestic hydrogen and biofuels, while carbon sequestration in the land would help offset hard-to-abate emissions.

This scenario assumed the scale of hydrogen production would be largely immaterial to the national energy market.

The most aggressive approach, called "hydrogen superpower", would involve Australia reaching net zero emissions by the early 2040s.

This pace was consistent with limit global warming to 1.5C and would lead to the strongest economic outcomes for Australia.

Hydrogen, produced not by fossil fuels but renewable energy, would supply domestic needs and exports.

Electrification of the energy market would remain strong, but more homes would instead replace gas heating with hydrogen.

The worst-case option modelled by AEMO involved a largely business-as-usual approach to policy, slow economic recovery from the COVID-19 pandemic and greatest risk of power outages.

It was consistent with a mean global temperature rise of 4C by 2100.

Get the latest news from thewest.com.au in your inbox.

Sign up for our emails