Project 2.1

Research to Date

The principal research activity to date has been to explore a policy framework for a single Australian State. With support from the Victorian Department of Sustainability and the Environment, we have analysed the following questions:

• The likely need for reductions in greenhouse-gas emissions over the 21st century

• What can be achieved in Victoria by way of deep cuts in emissions through the application of improved efficiencies through currently available and reasonably prospective technology development

• Possible pathways to achieving deep cuts in Victoria’s greenhouse-gas emissions, bearing in mind the constraints presented by factors such as existing capital stock, refurbishment cycles, capital investment cycles, etc.

We have completed a first research phase of this project and writing up of the report is nearing finality.

Our key findings to date are:

• A combination of no regrets/low risk and commercial technologies, supported by extended demand management Projects, can deliver substantial emission savings against baseline by 2025.

• We believe the savings to be deliverable because of the reliance on a range of proven technologies and demand management techniques, conservative assumptions about savings yields and the absence of any heavy reliance on carbon pricing to shift technology choices.

• In period 2025-2050 the no regrets/low risk approaches could be supplemented by an array of potential low carbon technologies for electricity generation and liquid/gaseous fuel production and use that are currently in the research and/or pilot development phase. Our research indicates that in combination these new technologies have the potential to deliver the reductions required by 2050.

• Given the uncertainties and risks, it is not possible now to identify an optimal future combination or portfolio of delivery measures. Instead, the need is for a portfolio of options that, in its entirety, is robust under a wide range of technical and commercial and/or policy settings.

• An increasingly carbon-constrained world does not imply lower growth or a poorer quality of life for the vast majority of Australians, but it will almost certainly involve a continuation of the structural changes that have been a feature of Australian life in recent decades.

• Government policies therefore need to build on an understanding of perceptions and potential barriers or opportunities with respect to public opinion on the climate-change issue, and other aspects of energy utilisation and conservation. They need to encourage necessary adjustments, by building deeper public understanding of the need and scope for change and the recognition of low-carbon energy options that offer potential for competitive upstream and downstream niche industries in Victoria. The communication of clear goals for emissions reduction, and the role of the community in their achievement, can be part of a concerted effort to establish a ‘public conversation’ about meeting the challenge of climate change.

• Social equity is also important. Hence, policies also need to provide support to low income families facing barriers to investing in lower carbon energy supply and services. Victorians need to be provided with information that allows for active participation in energy-efficiency options and greenhouse-related markets and recognises the widely accepted aspiration of leaving a legacy of social coherence, economic strength and environmental sustainability for Victoria.

• Time is a critical advantage in addressing the challenges of the target and the uncertainties of the optimal adjustment path for the Victorian economy. Thinking in terms of a forty-year time horizon provides the basis for an incremental and cumulative approach to achieving the 2050 target. If we begin to take action now, then we can work our way towards the target in a measured way, avoiding the need for major and disruptive change later on. It is the implementation of the more established, low cost options in the short to medium term that avoids the social and economic cost of a crash program later in the century.